Cash payment exceeds rs. 20000/-

This query is : Resolved

deepika dhakad (Querist)
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19 December 2014 During the financial year 2011-12 a party has made cash payment of Rs. 25000/- towards payment of freight. Whether such payment will be disallowed u/s 40A(3) or cash payment limit has been modified as 35000/- towards payment of freight.
plz suggest with relevant provisions as Income Tax Deptt. has raised a query in assessment proceeding that why not such payment considered as disallowed expenses u/s 40A(3).

plz reply fast ........its very urgent

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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19 December 2014 The provisions of section 40A(3) will not be applicable in case of cash payment made to transporter upto 35,000/- as amended by the finance act 2009