Above 20000/- not allowed. pl. go thru this link you will be found the solution as under
https://indiankanoon.org/docfragment/55306522/?formInput=40a%283%29
Juneja Project Services Pvt. ... vs Department Of Income Tax on 9 August, 2012
circumstances of the case and in law, the Ld CIT (Appeals) has erred in deleting the addition of Rs.2,32,89,832/- made on account of unaccounted receipt. 3.1 The Ld. CIT (A) ignored the finding recorded by the AO and the fact that the assessee did not offer complete income for taxation as was appearing in the TDS Certificates. 04. On the facts and in the circumstances of the case and in law, the Ld CIT (Appeals) has erred in deleting the addition of Rs.l,52,828/- made by the AO u/s 40A (3) of the I. T. Act. 3 ITA No.2401/Del/2011 CO No.225/Del/2011 4.1. The Ld. CIT (A) ignored the finding recorded by the AO and the fact that the assessee made payments in excess of Rs.20,000/- for purchase of furniture. 05. On the facts and in the circumstances of the case and in law, the Ld CIT (Appeals) has erred in deleting the addition of Rs.17,000/- made on account of commission paid for accommodation for staff. 5.1. The Ld. CIT (A) ignored the finding recorded by the AO and the fact that the expense
finding of fact is available on the record to justify the view. Considering these facts, we find that the CIT (A) is not justified in granting relief. There is no material on record to arrive at such finding. In our considered view, this issue needs examination to arrive at correct facts of the case. Considering these facts, we restore the issue to the file of the CIT (A) for a fresh adjudication. 8. The issue raised in ground no.4 & 4.1 is against deleting the addition of Rs.1,52,828/- made by the Assessing Officer u/s 40A(3) of the Income-tax Act, 1961. The Assessing Officer has observed that the purchasing of the furniture from M/s. Hari Om Furniture was made and payments were made in cash on various dates. The payments were made in excess of Rs.20,000/- which was not allowable as per the provisions of section 40A(3) of the Income-tax Act, 1961. The CIT (A) has granted the relief to the assessee by holding as under :- "7.2 I have carefully considered the submissions made on behalf of the appellant, the findings of the Assessing Officer and the facts
record. On perusal of the record, I am of the view that finding of Assessing Officer that, cash payments in excess of Rs.20,000/-to one M/s Hari Om Furniture on various dates amounting to Rs.1,52,828/- is not allowable u/s 40A(3) of the Act, is not borne out from the records. It is observed that none of the cash payments made by the appellant are in excess of Rs.20,000/- on a single day. As per section 40A(3) of the Act, as it stood at the relevant time, the disallowance is required to be made where the assessee incurs any expenditure in respect of which the payment is made in a 9 ITA No.2401/Del/2011
"Therefore, if an assessee makes payments at different times during the day and he has no idea that he has to pay to the same person on more than one occasion, he cannot be subjected to the statutory provision contained in section 40A(3) of the Act, unless anyone payment is above Rs.2,500. The statutory limit of Rs.2,500 under section 40A(3) of the Act applies to payment made to a party at a time and not to the aggregate of the payments made to a party in the course of the day as recorded in the cash book.
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