Sec 40a(3)

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

18 March 2012 Dear Professional experts, please clear my query relating to sec 40A(3)of I.T Act:

An assessee who purchase goods on credit worth Rs 1,20,000/- & make the payment of the same in cash on diff. dates below Rs 20,000/-. Does it is hit by the provision of sec 40A(3)?

Please advice....

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

18 March 2012 YES, 40A(3) ATTRACTS.

Message likes : 2 times

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
Follow

19 March 2012 As per My understanding 40A(3)will not attracts in your case, because when the payment made during the day exceeds Rs 20000 then only it attracts.

Dear Chackrapani Sir Please Clarify if i am wrong with any Case law or notification if available.

Upgrade to CAclubindia Pro. Subscribe Now!

CA Prashant Gupta

CA Prashant Gupta (Expert)
Follow

19 March 2012 as per my view it will not attract 40A(3). as all payment are below 20,000/-

CA. SHIVA SHANKARA R. SHETTY

CA. SHIVA SHANKARA R. SHETTY (Expert)
Follow

19 March 2012 100% this transaction will attracts sec. 40A(3). Because, earlier 40A(3) will attracts individual payment only. But, now it will attracts the transaction rather than payments.
If, pays Rs. 20,000/- in 5 installments for same invoice, it will treated as single transaction and will disallowed under section 40A(3).

Message likes : 1 times

CA. SHIVA SHANKARA R. SHETTY

CA. SHIVA SHANKARA R. SHETTY (Expert)
Follow

19 March 2012 Sorry to say Mr. CA Prashant Gupta. Kindy read the latest updates and amendments rather than thinking what you read in your student life.

It is very dangerousness after qualifying CA, you are giving wrong answer to someone. Sec. 40A(3) is an very important section of IT Act, 1965 and every CA using this section while assessing the income. But, you are not updated.

No excuse to you...

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
Follow

19 March 2012 @ CA. Shiva shnkara R sheety sir Please can you give any Circular,notification or case law or any update on the same.

Thanks in advance.

s zafarulla khan

s zafarulla khan (Expert)
Follow

19 March 2012 sir
As per section 40A(3) with effect from asst.year 2009-10, where the assesses incurs any expenditure in respect of which a payment or aggregate of payments made to a person IN A DAY EXCEEDS RS. 20000/- no deduction shall be allowed in respect of such expenditure.

it is cleared from the above, in your case 40A(3) does not attract, since you are making payments below Rs 20000/- in DIFFERENT DATES.
and it is also cleared in Notification no SO 2431(E) dated 10th Oct 2008. applicable with effect from A.Y 2009-2010

OK.......

Upgrade to CAclubindia Pro. Subscribe Now!

Querist : Anonymous

Querist : Anonymous (Querist)

20 March 2012 there are lots of reply/comments received but the query is still pending and require perfect reply with supportive rules, act/case law reference.

Request to please resolve the query by some senior experts.

Thanks

Querist : Anonymous

Querist : Anonymous (Querist)

20 March 2012 Mr. Shiva Shankar do you remember that ever you have reply wrong answer to any query in past......i think certainly yes but might be you are ignorant of it.

The conclusion is that "no one is 100% complete perfect and updated knowledge about taxation and audit matters, this forum is to share information, knowledge with other peoples. If any one have posted/replied wrong then it does not meant that you replied in that bad way. It can be replied in polite and wise manner.

So please take care about commenting others in future.

Regards

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
Follow

20 March 2012 Hi bare act says like this "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"
Hence in it is not applicable.

I will give you the case law as soon as possible.

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
Follow

20 March 2012 Hi author,
sorry, please Do not think that Seniors only will have the knowledge, some time this type of confusion will be happen to Seniors also which i have seen in my Articleship.

Upgrade to CAclubindia Pro. Subscribe Now!

CA. SHIVA SHANKARA R. SHETTY

CA. SHIVA SHANKARA R. SHETTY (Expert)
Follow

20 March 2012 Thanks Mr. Anonymous. you told that, no one has 100% knowledge. I will also agree.

But, sec. 40A(3) is an important section. while assessing your client income (irrespective of individual or corporate) you should apply the section. 40A(3). while uploading the Form 3CD, you should specify the details of expenditure diss-allowed u/s. 40A(3).

Even a member working in industry also should use this section, while computing the taxable income.

you know a chartered accountant must have a knowledge of latest important updates. Why institute conduting seminars, workshops etc?

Do you know why institute mandated the CPE hours?

Do you know, now-a-days, number of CA's are facing un-employment. Why??

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
Follow

20 March 2012 @ CA.Shiva shankar Sir please give me any circular , notification or case law to support your answer so that we will be perfect in 40A(3)

Thanks in Advance.

Querist : Anonymous

Querist : Anonymous (Querist)

20 March 2012 Dear Mr. Shiva Shankara, i think u still not get the point i raised regarding your comment on CA. Prashant Gupta.

It does not sound good the way u comment on him. Please keep dignity & respect to others.

Further i request you to please give reference to the case law/rules/etc supportive your view on sec 40A(3).

Thanks & Regards

Upgrade to CAclubindia Pro. Subscribe Now!