08 February 2009
as per sec 40A(3) , considering the amendment by the finance act 2008. A payment or aggregate of payments made to a party in a single day in excess of Rs. 20000 in cash is 100% dissallowed. (earlier a single payment in excess of 20000 by cash is dissallowed , n that too 20 %). it is clearly visible by the amendment that aggregate of payments or a single payment in cash in excess of Rs. 20000 is dissallowd. My problem is - since the amendment n its objectives r clearly visible, a client of ours says that if he recieves 2 bills, both of them Rs. 20000 n He makes payment to them in cash on the same day , although the aggregate will be more than 20000, he says it is comletely allowed. How could it be ??? as the amendment clearly says payment or aggregate of payments......... plzz resolve ..... is he right or am i right???
CAclubindia
