Sec.40 (A) (3)
This query is : Open
26 August 2008
21/8/2008 Purchase of Goods 51000/-
22/8 Cash Payment 32000/-
24/8 Cash Payment 19000/-
Whether 32000 will Be Disallowed or 51000/- ?
Plz Answer With Relevant Provisions Of Income Tax Act.
22/8 Cash Payment 32000/-
24/8 Cash Payment 19000/-
Whether 32000 will Be Disallowed or 51000/- ?
Plz Answer With Relevant Provisions Of Income Tax Act.
26 August 2008
Section 40A(3)
Business disallowance - Cash payments exceeding Prescribed limits:
All outgoings, including purchase of stock-in-trade are covered - Section 40A(3) refers to the expenditure incurred by the assessee in respect of which payment is made. It means all outgoings are brought under the word ‘expenditure’ for the purpose of the sub-section. The expenditure for purchasing the stock-in-trade is one of such outgoings. - Attar Singh Gurmukh Singh v. ITO [1991] 191 ITR 667 (SC).
Advance payments are also covered - Even if the payments were made by way of advances and were ultimately treated as discharging the liability to pay the price of the goods purchased, the payments so made must be considered to fall within the expression ‘expenditure’ incurred for payment of the price of the goods - Kejriwal Iron Stores v. CIT [1988] 169 ITR 12 (Raj.).
**DM
Business disallowance - Cash payments exceeding Prescribed limits:
All outgoings, including purchase of stock-in-trade are covered - Section 40A(3) refers to the expenditure incurred by the assessee in respect of which payment is made. It means all outgoings are brought under the word ‘expenditure’ for the purpose of the sub-section. The expenditure for purchasing the stock-in-trade is one of such outgoings. - Attar Singh Gurmukh Singh v. ITO [1991] 191 ITR 667 (SC).
Advance payments are also covered - Even if the payments were made by way of advances and were ultimately treated as discharging the liability to pay the price of the goods purchased, the payments so made must be considered to fall within the expression ‘expenditure’ incurred for payment of the price of the goods - Kejriwal Iron Stores v. CIT [1988] 169 ITR 12 (Raj.).
**DM
26 August 2008
U R Giving Me The Examples Of Expenditures Which I Very Well Know.
Plz Solve My Query As There is No Clear Provision in the Act Regd It.
Plz Solve My Query As There is No Clear Provision in the Act Regd It.
26 August 2008
Rs. 32000
26 August 2008
Plz Don't Answer In Haphazard Manner
Answer With Relevant Provisions Of Income Tax Act.
I Am Not Asking For An Opinion Or View.
Answer With Relevant Provisions Of Income Tax Act.
I Am Not Asking For An Opinion Or View.
26 August 2008
Rs 32000 will be disallowed ,now check what the section in this regard
"(3)(a) Where the assessee incurs any expenditure in respect of which payment is made in a sum exceeding twenty thousand rupees otherwise than by an account payee cheque drawn on a bank or account payee bank draft, no deduction shall be allowed in respect of such expenditure"
first Line of section says that out of total sum incurred as expense ,the payment made in cash in excess of 20000 are taxable
so to make the expenditure taxable or disallowed both expenditure and payment should be more than 20000,if either are less than the 20000 than exp will not be disallowed
further Now as per new provision in the budget ,aggregate of payment made on single day to a single party will be considered towards 20000/- and will be disallowed
"(3)(a) Where the assessee incurs any expenditure in respect of which payment is made in a sum exceeding twenty thousand rupees otherwise than by an account payee cheque drawn on a bank or account payee bank draft, no deduction shall be allowed in respect of such expenditure"
first Line of section says that out of total sum incurred as expense ,the payment made in cash in excess of 20000 are taxable
so to make the expenditure taxable or disallowed both expenditure and payment should be more than 20000,if either are less than the 20000 than exp will not be disallowed
further Now as per new provision in the budget ,aggregate of payment made on single day to a single party will be considered towards 20000/- and will be disallowed
26 August 2008
But My Expenditure Is 51000/- And Payment Of Expenditure is 32000/-?
27 August 2008
exp is disallowed if payment & exp both exceeds 20000.
in ur case only to the extent 32000 ,contravention exists.
therefore,exp upto 32000 is disallowed & rest will not be disallowed as payment is not made to that extent.
in ur case only to the extent 32000 ,contravention exists.
therefore,exp upto 32000 is disallowed & rest will not be disallowed as payment is not made to that extent.
27 August 2008
But the Assessing Officer Has Dissllowed the Entire 51000/-.
Can U Plz Provide Relevant Provision In Income Tax Act To This Effect?
Can U Plz Provide Relevant Provision In Income Tax Act To This Effect?
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