My client is paying frieght of rs48000 in differnt bills for rs 16000
eg.,bill no.1:16000
bill no:2:16000
bill no:3:16000
on same day(1/5/12) to a single person:x transport and comission agents
will it be disallowed under section 40A(3)
Swami Ayyappa Nuli (TAX ADVISOR & CONSULTANT AT G.S.T SUVIDHA CENTER) (1372 Points)
25 June 2013My client is paying frieght of rs48000 in differnt bills for rs 16000
eg.,bill no.1:16000
bill no:2:16000
bill no:3:16000
on same day(1/5/12) to a single person:x transport and comission agents
will it be disallowed under section 40A(3)
Member
(Management)
(325 Points)
Replied 25 June 2013
Possible. Why go through so much trouble? Either pay in cheque of stagger the payment over different dates.
Pakshal Shah
(Practicing Chartered Accountant)
(271 Points)
Replied 26 June 2013
CA Momin Owais Ahmed
(Audit Manager)
(154 Points)
Replied 26 June 2013
Ishan kewlani
(Article)
(172 Points)
Replied 26 June 2013
Not disallowed as different bills & pymt is not exceeding 35000/- per bill in cash.
arihanth
(to become reputed CA)
(43 Points)
Replied 27 June 2013
virender
(CMA)
(31 Points)
Replied 27 June 2013
virender
(CMA)
(31 Points)
Replied 27 June 2013
CA V.V.SUBRAMANYAM
(CA Practice )
(21 Points)
Replied 27 June 2013
Payment to same person by seperate vouchwers in cash, is not allowable expense as per sec40A(3), SINCE THE AGGREGATE PAYNENT IN A DAY EXCEEDS THE LIMIT OF Rs. 20000/-
Anuj jain
(CA Final Student)
(163 Points)
Replied 27 June 2013
yes, as per sec 40a(3), it will be disallowed under the said section. Because as per this section if a person made payment exceeding Rs. 20,000 through cash to a single party in a single day then it will be disallowed.
CA Deepak Rathore
(EXPERT)
(281 Points)
Replied 27 June 2013
Fully allowed..
As it is Against different bill
Kindly Read Green Highlighted Lines
No disallowance under sub-section (3) of section 40A shall be made where any payment in a sum exceeding[twenty thousand] rupees is made otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft in the cases and circumstances specified here under, namely:
(a) where the payment is made to
(b) where the payment is made to the Government and, under the rules framed by it, such payment is required to be made in legal tender;
(c) where the payment is made by
Explanation: For the purposes of this clause and clause (g), the term “bank” means any bank, banking company or society referred to in sub-clauses (i) to (iv) of clause (a) and includes any bank [not being a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)], whether incorporated or not, which is established outside India;
(d) where the payment is made by way of adjustment against the amount of any liability incurred by the payee for any goods supplied or services rendered by the assessee to such payee;
(e) where the payment is made for the purchase of
(f) where the payment is made for the purchase of the products manufactured or processed without the aid of power in a cottage industry, to the producer of such products;
(g) where the payment is made in a village or town, which on the date of such payment is not served by any bank, to any person who ordinarily resides, or is carrying on any business, profession or vocation, in any such village or town;
(h) where any payment is made to an employee of the assessee or the heir of any such employee, on or in connection with the retirement, retrenchment, resignation, discharge or death of such employee, on account of gratuity,’ retrenchment compensation or similar terminal benefit and the aggregate of such sums payable to the employee or his heir does not exceed fifty thousand rupees;
(i) where the payment is made by an assessee by way of salary to his employee after deducting the income-tax from salary in accordance with the provisions of section 192 of the Act, and when such employee
(j) where the payment was required to be made on a day on which the banks were closed either on account of holiday or strike;
(k) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person;
(l) where the payment is made by an authorized dealer or a money changer against purchase of foreign currency or travelers cheques in the normal course of his business
Anuj jain
(CA Final Student)
(163 Points)
Replied 28 June 2013
Section 40A(3) provides for disallowance of entire expenditure where the payment for the same is made otherwise than by account payee cheque drawn on a bank or account payee bank draft. Where the payment made is less than Rs.20,000 in respect of an invoice which is more than Rs. 20,000, disallowance u/s 40A(3) shall not be made.
The words written above in bold type are wrong. Because section 40a(3) clearly states that where the payment or aggregate of payment exceeds Rs. 20,000 then the entire amount shall be disallowed.
CA Deepak Rathore
(EXPERT)
(281 Points)
Replied 03 July 2013
KINDLY READ seC 40a(3) cAREFULLY BEFORE ANY COMMENT
OR REFER TAXMAN PLZ
LIVE Course on Foreign Exchange Management Act (FEMA)(with recording)
LIVE Form 10 B and Form 10BB: Handle Tax Audit Reports of Charitable Organizations(with recording)