21 February 2019
Dear Sir, I am confused for cash purchase. In this regard kindly clear following queries: I have purchase a Radiator for Generator. and paid by cash two separate part against invoice value of Rs. 18,290/-
1. If a single bill of Rs. 18,290/- from "ABC Corporation" and paid by cash two part from "APB Pvt Ltd" (1st day 9000/- as advance & balance after receiving the materials), in case shall that be disallowed if is paid in cash? 2. If a bill of Rs.25,000/- and is paid in cash on multiple dates below Rs.10,000/-, in case shall that be disallowed ?
21 February 2019
In both the cases amount shall not be disallowed as s. 40A(3) clearly says that amount paid in a day exceeding Rs. 10,000/- shall be disallowed. Text of section is given below: (3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, 18[or use of electronic clearing system through a bank account, exceeds ten thousand rupees,] no deduction shall be allowed in respect of such expenditure.
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