22 December 2010
As per Sec 40A(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, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure.
My query is that where a person makes payment of two different bills(none of them exceeds Rs 20000) in cash on a same day but the total exceeds Rs 20000 whether Sec 40A(3) is applicable in that case and all the payments will be disallowed(considering these payments are not covered under exemptions).
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