Section 40 (a) 3
This query is : Resolved
08 October 2012
Hello everyone, i have a doubt wrt section 40 (a) 3 of income tax Act.
What if assessee makes payment in cash to a single person in a day against different-different bills which exceeds the limit of Rs 20,000/-.
As there is a word written "ANY EXPENDITURE" so can any1 enlight me about this example and the word "Any Expenditure".
What if assessee makes payment in cash to a single person in a day against different-different bills which exceeds the limit of Rs 20,000/-.
As there is a word written "ANY EXPENDITURE" so can any1 enlight me about this example and the word "Any Expenditure".
08 October 2012
Aggregate Payment has to be seen: After the amendment w.e.f 2009-10 if a person makes more than one different purchases for cash from same person in excess of Rs 20000 in a single day even though on separate cash memos, such AGGREGATE payment will be disallowed u/s 40A(3). For example if A makes three purchases of Rs 8000 each from the same person during different time of the day and obtains three different cash memos, yet the transaction will be covered by section 40A(3) and such expenditure will be disallowed..
PLS EMPHASISE ON THE WORD AGGREGATE..
HENCE THE SAID PAYMENT WOULD BE DISSALLOWED
PLS EMPHASISE ON THE WORD AGGREGATE..
HENCE THE SAID PAYMENT WOULD BE DISSALLOWED
08 October 2012
Yes split the amount into many days so that 40A(3) disallowance does not get trigerred.
08 October 2012
Thanks for reply... ok now m pretty mu6 clear abt expenditure, bt wat if the bill / cash memos are in different names?
Wud sec get triggered to disallow d exp?????
Wud sec get triggered to disallow d exp?????
08 October 2012
Though the receiver is the same person.
08 October 2012
How can cash memos be in different names if receiver is the same person?
10 October 2012
if u r the one and u wann avoid tax then u can say that make the bill in my name in my brothers name, or in my son"s name who already got married. Then????
10 October 2012
Then book amounts in their name and pay cash in those names onl though the same is collected by same person.
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10 October 2012
It is possible that the AO may insist on the invoices. If invoices for original purchases are in the name of a single person,then booking amounts in cash memos in different names does not help.It will be still disallowed uner 40 (a)3
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