Shanti Ram Mehata Vs. Assistant Commissioner of Income Tax (2009) Business expenditure – Disallowance under s. 40A(3) – Multiple payments to same party on a single day. Each payment below rs.20,000. AO made disallowance under s. 40A(3) on the ground that the total payments of one day exceeded Rs.20,000. Not justified. Disallowance under s. 40A(3) is applicable for each payment and not for the aggregate of the various payments made to same party during one day. Thus, disallowance can not be sustained.
Our Question: -
But as per Sec. 40A (3) (as amended) “total payment in a day” consider
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