banner_ad

Section 40A(3)

Tax queries 1057 views 3 replies
User Avatar

Chartered Accountant
30 Points Posted on 21 February 2008

 

If a debtor of a Company pays an amount directly to the creditor of the same Company and then the Company passes an adjustment entry, crediting the debtors and debiting the creditors, whether such adjustment would attract the provisions of section 40A(3) of the Income Tax Act, 1961?

Reply Share Follow
On 21 February 2008 at 12:15 Report
Replies (3)
User Avatar

Chartered Accountant
4772 Points Posted on 21 February 2008
The section uses the term otherwise than account payee cheque ...........payemnt by adjustment entry is payment otherwise than account payeee cheque and not in accordance with the provisions;
10 Reply
On 21 February 2008 at 12:30
User Avatar

CA Final
814 Points Posted on 21 February 2008
Pranita Ji. I can provide you with a circular, which can prove helpful for you. Circular No.34, year 1970. But it says that the adjustment should be between the same parties (i.e i owe you money and you also owe me money) and not 3 different parties( i.e assessee, debtor and creditor)
Reply
On 21 February 2008 at 14:08
User Avatar

Chief Financial Officer and Co
11318 Points Posted on 21 February 2008
40A(3) will get attracted only if the following ingadients should be present 1. Incurring of expenditure 2. Payment In your case both the above are not there. The room for invoking 40A(3) is absent in ur case.
33 Reply
On 21 February 2008 at 14:22


CCI Pro
Join CAclubindia WhatsApp Finance Community & stay updated with the latest TAX news, compliance alerts and important updates all in one place!

Leave a Reply

Post Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Recent Threads

More recent discussions | Post

Related Threads
Loading

Latest Job Openings

View all
Company
29 May 2026
Finance Head

Bhawar Sales Corporation

Chennai

Graduate (Any)

View Details
Company
23 May 2026
Article Assistant

Geeta Manchanda & CO.

New Delhi

CA Inter

View Details
Company
14 May 2026
ICSI Trainees for 21 Months and Semi-Qualified CS

CMNITY HIRE

New Delhi

Others

View Details
Company
04 May 2026
Content Writer Intern

Interactive Media Pvt Ltd.

New Delhi

CA Inter

View Details
Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
16 May 2026
Account & Audit Asst

RAHUL KHANDEBHARAD & ASSOCIATES

Nashik

B.Com

View Details
Company
08 May 2026
Paid Assistants

Quick Taxperts Private Limited

Bengaluru

Graduate (Any)

View Details
Company
ARTICLESHIP 31 May 2026
CHARTERED ACCOUNTANT ARTICLE ASSISTANT

KPRS And Associates

New Delhi

CA Inter

View Details