25 May 2009
Section 40A(3)before amendment said that "Any payment exceeding Rs 20000 and made in cash on a single invoice on a single day will be disallowed for deductions"
However, with effect from april 1, 2009 the word "Aggregate" has been added to avoid splitting of cash payments.
My question is that if an assessee made cash payments exceeding Rs. 20000 on a single day to a contractor (in the year 2004-05)but receipts were taken by the assessee on split amounts...then will the exenditure be disallowed??? Wat contention shoud the assessee give to avoid this disallowance?
Can anyone provide me with some case laws on this issue.
CAclubindia
