Cash above 20000 deposited into suppliers bank account
This query is : Resolved
16 April 2013
Hi the company I am auditing is running construction business. For meeting expenditure sometimes they deposit money into the suppliers/ clients bank account directly (above Rs 20,000). Will such expenditure come under 40(A)(3) and get disallowed or is it ok to continue so? Kindly reply...
16 April 2013
yes disallowed as there written any means other than account payee cheque drawn on a bank or account payee bank draft.
hence disallowed
hence disallowed
Message likes :
1 times
16 April 2013
Yes, totally agree with CA Vikas Acharya.As section 40A(3) of Income tax act clearly mentions that the payment made above Rs.20000/- in respect any expense by any mode otherwise than by an account payee cheque drawn on bank or account payee bank draft shall be diasllowed.
Message likes :
1 times
16 April 2013
Thanks experts. But I have also read in many places that internet fund transfer is also allowable(Not cash deposit).
16 April 2013
Miss, internet fund transfer reflects in your bank account, therefore allowed.
but directly deposit to there account will not reflect in your bank account, and scope of manipulation increased therefore, not allowed.
but directly deposit to there account will not reflect in your bank account, and scope of manipulation increased therefore, not allowed.
Message likes :
1 times
16 April 2013
Yes I just wanted to add that (fund transfer) to the list you have mentioned - account payee cheque drawn on a bank or account payee bank draft. Thanks
Message likes :
1 times
16 April 2013
Hi,
Please refer CIT Vs. Venkatadhri Constructions 213 taxman 180(madras)(mag) where it was held that cash payment into payee's a/c is not as good as payment by account payee cheque as required u/d 40A(3).
Please refer CIT Vs. Venkatadhri Constructions 213 taxman 180(madras)(mag) where it was held that cash payment into payee's a/c is not as good as payment by account payee cheque as required u/d 40A(3).
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Applicability
- Where to show the RCM on Rent paid to unregistered landlord
- Is Aadhar PAN linking required for opening bank account?
- CPC Processing IT Return for AY 2023-24 without recognizing the Taxation Option under New Regime
- TDS NUMBER SURRENDER
- Gst Sales of FY 2023-24
- Offsetting interest income against derivative trading losses
- Application of 115BAC
- Legal heir raised refund , but refund issued to the closed account of deceased.
- RCM - commercial rent paid to URP under GST
- Whether still royalty
- 20% OF DEMAND PAYMENT IN APPEAL
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding Resignation by Auditor from Pvt. Ltd.
Trending Online Classes
-
Excel Mastery Program
CA Rishabh Pugalia
CAclubindia
