Disallowance u/s 40A(3) ::

Court :
HC

Brief :
Held by the Hon`ble Court that, rule 6DD provides exception of payment by crossed Cheque and draft in certain circumstances and CBDT is also issued some guidelines for cash payment these are illustrative and not exhaustive. Therefore cash payment made on Sunday to the person of unorganised sector exceeding the specified limit in section 40A(3) is valid in law.

Citation :
C.I.T. Vs. K.K.S.K. Leather Processor P. Ltd.

Disallowance u/s 40A(3) C.I.T. Vs. K.K.S.K. Leather Processor P. Ltd. 02/05/2007 [2007] 292 ITR 669 (Mad) Case Fact: Whether, disallowance of cash payment made on Sunday to the person of unorganised sector exceeding the specified limit in section 40A(3) is valid in law ? Decision: Held by the Hon`ble Court that, rule 6DD provides exception of payment by crossed Cheque and draft in certain circumstances and CBDT is also issued some guidelines for cash payment these are illustrative and not exhaustive. Therefore cash payment made on Sunday to the person of unorganised sector exceeding the specified limit in section 40A(3) is valid in law.

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Judgement posted by

CA.Saibaburao Nanduri

Chartered Accountant

I am a commerce graduarte of Andhra University. Studied at HINDU COLLEGE, Guntur. Became FCA and started Practice under the name and style of M/s SAIBABU RAO CO I became Chairman of CA Institute, Guntur Branch, during the year 2008-09 My post qualifications are: Information Systems Audit DISA (ICAI) ... Read more

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