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stupid client or stupid me

Tax queries 1128 views 4 replies

 

A Client of ours has received a bill of Rs. 60000 he is making payment in cash. In the books of A/C   he is showing it as three different payments made on say 1.1.2009 , 2.1.2009 & 3.1.2009. On 2.1.2009 he has received another bill from the party of say 20000 he is making the payment of same on 2.1.2009. if u notice that on 2.1.2009 the aggregate payment is in excess of 20000. Earlier it was allowed , but as per amendment made in sec 40A(3) it now is disallowed. The staff of client argues that the provision is just for a single bill , in my opinion he is wrong as the act clearly says that aggregate payment in cash in excess of 20000 is disallowed.
Replies (4)

If your another bill is of Rs.20000/- only and not exceeding Rs.20000/-, no disallowance u/s. 40A(3) for the payment made of Rs.40000/- covering payment of bill dt.02-01-2009 i.e.20000/-  and balance payment of previous bill i.e.20000/- left out of Rs.60000/-. Please note that to attract disallowance u/s.40A (3), the amount of bill as well as amount of payment should be more than Rs.20000/-.

I think,It will get disallowed as the provision is "If you pay amount of Rs.20000 or more to one person in single day.It doesn't have to do with how many bills are there.

S.R.Associates

Tax & Investments Consultants

 

Aggregate Payment has to be seen: After the amendment w.e.f 2009-10 if a person makes more than one different purchases for cash from same person in excess of Rs 20000 in a single day even though on separate cash memos, such aggregate payment will be disallowed u/s 40A(3)

I thnk it will be disallowed and herewith providing an attachment.
 


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