26 June 2009
Whether applicabilty of sec 40A(3) is valid in case of purchase/sale of goods in ordinary course of business,means if some one receive cash more than 20000/- on account of sale to some trader.
26 June 2009
Hi Akhilesh, Sec. 40A(3) is applicable where any expenditure incurred in cash in excess of Rs. 20000/- in a day to a single party. Therefore sale exceeding Rs. 20000/- is permissible whereas purchases is not allowed. Cash purchase over Rs. 20000/- from a single party will be disallowed and added back to your total income.
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