Whether disallowance u/s. 40a(3) applies ????????????

This query is : Resolved

CA Abhishek Singh (Querist)
Follow

04 June 2014 Hello everyone,

Mr. A is employee of XYZ ltd. XYZ ltd transfers to saving account of Mr. A Rs.100000/- for payment of various expenditures on their behalf.

details of expenditure made by Mr. A are as under
1. professinal fees: rs.50000 in cash(single pmt)
2. travelling exp :50000 in cash (single pmt)

My question :

will above expenditure get disallowed under section 40A(3) since amount is >20000 ??

waiting for the views of the experts.

Simranjeet Singh

Simranjeet Singh (Expert)
Follow

04 June 2014 If Mr. A transfers Rs 100000 by an account payee chque. No exp will get disallaowed. Since the section clearly states that the exp will only be disallowed if payment is made by any other mode than an account payee chque or draft

CA Abhishek Singh

CA Abhishek Singh (Querist)
Follow

04 June 2014 It is clearly mentioned in the query that Mr. A has made payment in cash for amt>20000. plz ready my query carefully.

Upgrade to CAclubindia Pro. Subscribe Now!

Simranjeet Singh

Simranjeet Singh (Expert)
Follow

04 June 2014 M sry about dat abhishek. Didnt read d ques carefully. Yes the exp will get disallowed as the paymnt is more than 20000 and in a single day to a single party