01 March 2011
case 1; if i purchase suppose on 25/02/11 value rs 40000 and payment in cash made as below 1. on 26/02/11-rs 10000 2. on 28/02/11- rs 10000 3 on 01/03/11-rs 10000 4. 0n 02/03/11- rs 10000 then is there any disallowance u/s 40A
case 2 if i purchase suppose on 25/02/11 value rs 60000 and payment in cash made as below 1. on 26/02/11-rs 10000 2. on 28/02/11- rs 10000 3. on 01/03/11 -rs10000 4. on 03/03/11- rs 30000 then how much expense is disallowed
01 March 2011
Dear Rizwan Dis allowance u/s 40A is depend upon a number of factor must important is place of payment . There is certain exemption limit for certain cases . And furthermore cash payment is allowed up to Rs 20000/- Per daily basis in normal cases
01 March 2011
there are 3 conditions to be fullfilled to effect the provisions of Sec 40A 1. it should be an expenditure deductiable u/s 30-37 2. the amount of expenditure should be above Rs.20000/- 3. payment shold be made in cash or otherwise than by way cash and also inexcess of Rs.20000/- per day.
in your case1 ther is no violation case 2 ther is a violation as you have paid 30000/
the disallowance is 100% of the payment ie.,Rs 30000/-
in an another example: if you have purchsed 2 items for RS 15000/- each and paid Rs 30000/- in a day there is no violation as it provides for a "expenditure"
CAclubindia
