Section 40A(3)

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Thanks for all who have given clarification about the said section.  But lot of people are telling about fixed  assets only.  I am asking about purchase of raw materials. Whether 20% will be disallowed when we make payment by crossed cheques. Since companies are making payment by account payee cheques.  Whether account payee cheques and crossed cheques are the same. Please clarify this.

Thanks in advance

 

 

Replies (1)
Yes purchase of raw material will be disallowed, as it is an expenditure. now diff between account payee cheque & crossed cheque:- crossed cheque cannot be encashed on bank counter however it can be endorssed while account payee cheque can be deposited only in the account of the persone whoes name is specified over it....

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