40a(3)

prasad (government employee) (225 Points)

14 December 2017

can the assessee make payment in cash excess of 20000 to Beverage corporation ltd towards license fee in liquor business

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Prajjwal Kaushik (Finance Professional) (6216 Points)
Replied 14 December 2017

I am not much aware how license fee for liquor business is treated in business.

Assuming it's an Asset, having an enduring benefit: No, 40A(3) shall not be applicable

Assuming it's a Revenue Expense, Debited in P&L: Yes, 40A(3) will be applicable.

RAMAKRISHNAN R (INCOME TAX OFFICER) (1736 Points)
Replied 15 December 2017

from a.y. 2018-19, capital expenses are also covered under section 40A(3)

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