16 November 2007
I have paid CASH advance towards expense Rs.1,00,000 and now booking the expenses. The individual expenses are above Rs.20,000 will this be disallowed ?
16 November 2007
THE DISALLOWANCE IS FOR CASH EXP. BUT NOT FOR CASH ADVANCES. SAME DAY FOR SAME PARTY THE CASH EXP. CANNOT BE MORE THAN RS. 20000.THEN THERE IS NO DISALLOWANCE. YOU MAY MANAGE ACCORDINGLY. THE INDIVIDUAL CASH BILLS WILL HAVE TO BE ARRANGED SUCH THAT THEY ARE BELOW RS. 20000 EACH FOR EACH DAY AND FOR EACH PARTY.HOPE YOU CAN DO THAT. REGARDS, R.V.RAO
18 November 2007
I feel that Sec 40A(3) is attract for advances also.Purpose of introduction of Sec 40A(3) is to curb the cash payment in excess of Rs 20000/
Even if you make the payment one day befoe the bill date it may also advance.In this way the purpose of the Section may be defeated.I feel that, appellate authorities may not accept your view.
My view has also reflected in Direct Taxes Ready Recknoer by G.Sekar FCA-page 146
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