Sec 40a dissallowance
This query is : Resolved
05 November 2012
DEar Experts
My Doubt is, if a company creates a salary liability of say rs. 25000 on 7th of November, and pays salary to that particular employee on 8th say 15000 and on 9th remaining 10000 in cash(both times)
IS disallowance under sec 40A Attracted?
My Doubt is, if a company creates a salary liability of say rs. 25000 on 7th of November, and pays salary to that particular employee on 8th say 15000 and on 9th remaining 10000 in cash(both times)
IS disallowance under sec 40A Attracted?
05 November 2012
Please explain with reference to any circular, notification or case law.
05 November 2012
The query is mainly because the section and Rule 6D clearly states that its for payment on a single day, and as the section is included obviously to reduce cash based transaction ,
I doubt if such a good loop hole be left in the law
So i require case law or any such backup to hold strong my case.(i think it should be disallowed, but as cash transaction is not in a single day i also feel i can let this go)
I doubt if such a good loop hole be left in the law
So i require case law or any such backup to hold strong my case.(i think it should be disallowed, but as cash transaction is not in a single day i also feel i can let this go)
05 November 2012
Section 40 A(3) itself provides that the aggregate payments to the same person, otherwise than by an account payee cheque or draft, DURING A DAY exceeds Rs.20000, this provision applies.Hence in your case, there will not be any disallowance as the each payment on a single day is NOT exceeding the specified limit.
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05 November 2012
Yes, I understood that, but can i rely 100% on the said section
or
Is there any explanation from department, tribunal, HC SC etc in contrary to the notion of payment on single day.
Here to be more specific, liability is created as single, that is 25000 single amount, but only payment is in two instalments
So i want to know if there is any case law which challanges the normal notion or confirms the same at any count.
or
Is there any explanation from department, tribunal, HC SC etc in contrary to the notion of payment on single day.
Here to be more specific, liability is created as single, that is 25000 single amount, but only payment is in two instalments
So i want to know if there is any case law which challanges the normal notion or confirms the same at any count.
05 November 2012
Hi
It is allowed u/s 40A. There is no such case law i have come across til now to validate but it is practice follwed in generall.
Thanks//Vaibhav
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It is allowed u/s 40A. There is no such case law i have come across til now to validate but it is practice follwed in generall.
Thanks//Vaibhav
Click thank button to convey your appreciation.
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