Dear friends
I have a query related to section 40A(3) of The Income Tax Act.
A person working as a property dealer, when he purchases the land then some payment made in cash which may be in lakhs. As per section amount paid in cash is disallow.
Now I want to know that whether this type of Assessee have some relaxation or not???
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Section 40a(3) of the income tax act.
Replies (4)
Relaxation can be given subject to teh rules mentioned in rule 6DD of teh I-T Rules.
Dear Anoop Kumar,
There are no such exceptions for property dealer under exception of Rule 6DD of I.T.Act 1961.
To make dis-allowance u/s 40A(3), first that expense should have been debited to the Profit & Loss Account. Since, the assessee deals in property, so it is like any other good which is traded in the normal course of business.
And hence, it willbe dis-allowed as it does not fall within the exception provided in Rule 6DD.
I agree completely with Sonam.
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