The assesee had purchased some kits from a shop for more than Rs 20000 and paid the amount in cash because the shopkeeper was neither accepting cheque nor any card. Will such expense still be disallowed u/s 40 (A) 3 ?? Reply asap.
Menu
Disallowance u/s 40 (a) 3
Replies (4)
Yes, Sridhar.
Thanks
but the assessee had no option except for paying in cash...
As per sec 40A(3),it will be disallowed.and furthur if such person can prove that payment is made in a city where there is no bank facility at the time of payment or when u r making payment no banks are working due'to holiday or strike .furthur the solution to your query is,the client should ask seller to break up each bill not exceeding rs 20,000.generally as per sec 40A(3),both bill amount and payment amount in a single day and to same party should not exceed rs 20,000 and another condition,it should not be intentential in such a way to deceive.but in case ur case as seller donot accept cheque,i think u can ask seller to give more than one bill in such a way no bill amount should not exceed rs 20,000
Spread the payment to more than 1 day. Arrange for entries in cash book accordingly and take receipts from payee for different dates.
Recent Threads
- Planning of Ceased a Business i.e Closure of Compa
- Property value in 26QB
- Form 26QB Multiple Buyer/Multiple seller
- Company Formation for clothing business
- TDS on purchase 194Q
- Compensation for urban land acquisition
- Understanding section 269st
- CASH AS GIFT OR FD AS GIFT
- NPS Pre Maturity full exit taxation rules
- Planning to ceased a Business
Related Threads
CAclubindia
