Cash payt excluction 40a(3)

This query is : Resolved

Shruthi (Querist)
Follow

10 October 2013 40A(3) applicable or not in the follg sitn:

1)Rigan purchases goods in cash from his brother for Rs 40000, whose market value is Rs 35000.

2)Riyan purchases a building for RS 1000000 and makes the payment in cash.

3)Riyan makes a purchases of goods of RS 60000 and makes payment of RS 45000 by account payee cheque and RS 15000 in cash.

Please reply and thanks in advn.

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
Follow

10 October 2013 Ans 1. Yes
Ans 2. It is not an exp.
Ans 3. No

Message likes : 1 times

Ganeshbabu K

Ganeshbabu K (Expert)
Follow

10 October 2013 1)Sec.40(A)(3)Applicable and disallowed and also need to report in tax audit report under section 40A(2)(b)
.
..
2)Sec.40A(3)Not applicable for Expenditure not debited to profit and loss

3)Sec.40A(3) not applicable

Message likes : 1 times

Upgrade to CAclubindia Pro. Subscribe Now!

CA Pallav Singhania

CA Pallav Singhania (Expert)
Follow

10 October 2013 Agree with Experts,

1. Purchased made by Regain will be disallowed as Cash Payment exceed the prescribed limit of Rs. 20000. Sec. 40{a}3 applicable..

2. Purchase of Asset can be made in cash, no disallowance..
Sec. 40{a}3 not attracted...

3. Cash payment limit is under 20000, no disallowance, section 40{a}3 not attracted..

regards,

Message likes : 1 times