Dear saurabh sir,

there is more than one INCORRECT interpretation of this section 40A(3) in the reckoner you have referred. The other is the wierd correlation of section 40A(3) with depreciable assets

I am not convincing anyone here, just think on your own,

1. Do we say "incomes and expenditures account" or "income and expenditure account"? Even then it means there can be so many expenditures

"Any expenditure", in plain english very well means every expenditure, all expenditures, either expenditure.

2. Just copy the section 40A(3) posted here to MS word, and try changing the phrases 

"any expenditure" to "Any expenditures", and 

"such expenditure" to "such expenditures,

one phrase at a time. 

Try the different combinations of singular and plural of "expenditure" in the section. Run spelling and grammar check, the only grammatical error that word can point out is "Fragement used". 

3. Take the general clauses act. section 13. In a central statute, unless there is something repugnant in the context in which it is used, or unless there is a provision to the contrary, any reference to the singular denotes the plural.

Hareesh, like you said, it is indigestible that by splitting bills we can circumvent 40A(3). Can we buy Rs.30,000 worth of wood, similar in all characteristics, and then obtain bills that say 15,000 wood+ 15,000 wood????? No. They are not even different expenditure. Just different bills.

To me, the only condition to disallow is that the payments should relation to some expenditure (again Not bill), for which assessee has claimed deduction, whether they are genuinely different or not

Amendment itself was introduced to favour revenue.

Regarding case laws, let the scrutines start for FY 2008-09, we will have plenty of case laws in a year's time. TIll then we have to sit and quarrel, unfortunately..... But to me there is a clear cut case of disallowance. 

Will not posting here again regarding this matter, cos its becoming a debate, and the person who asked the first question is nowhere in the vicinity. This was just for Hareesh and Saurabh sir.