06 January 2014
Dear Experts, I have a case regarding cash payment:- M/s X co. issue cheque in the name of employee of Rs. 40,000/- for purchasing a Mobile Phone. The employee withdraw the cash from Bank and then purchased a Mobile phone. The question is that whether this payment is cover under Payment u/s 40 A 3.
09 January 2014
if cheque is open cheque then it is cash payment and disallowed.but if cheque is account payee cheque it is not cash payment adn allowed . . it is difficult to find out for auditor whether cheque issued is crossed or open cheque unless a copy of cheque is pasted with the voucher . . That is why it is recommended to get certificate from assesse that he had issued only account payee cheques for payment more than 20000
CAclubindia
