Section 40A(3)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 June 2011 "A" Purchases goods from "B" . "C" a group Company of "A" makes payment to "B" as per instructions of "A" .
In the Books of account of "A" , the ledger account of "B" is debited and ledger account of "C" is credited.
Whether the same is in violation of Section 40A(3) ? as the payment is not made by "A" through an Account Payee Cheque, but by way of Book entry ( and also the same not covered by the exception provided in Rule 6DD(d)).

CA. RAVIKUMAR

CA. RAVIKUMAR (Expert)
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01 June 2011 As per my knowledge It should be disallowed under Sec 40A(3) because there is no exemption in Rule 6DD and the company A which claims Expenses for Payment made by Company C
Hence it should be disallowed.

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