Sec 40(3) Payment to Same Person But Against Different Bill

SEC. 40(3) IS NOT ATTRACTED IG GRN IS SEPERATE

No in case payment is made against different bills.

40A(3) is not applicable

In case of singal Transporter you are paying to 5 Truck then Sec.40A(3) Applicable.

Yu can Pay only up to 35000/=

(3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure.

Its categorically mentioned "...............to a person in a day........"

Agreed with Kamal Jain Sir

No matters that u have  received from the same transporter , Section40A(3)  is attracted when payment in cash exceeding Rs20,000/- through a single voucher  or on the same day  so you can pay Rs10,000 daily in cash but however you  have to deduct T.D.S if the  total payment exceed Rs,75000/-  in a year and  further  you have pay Service Tax  as given below   :-  10.3%  on ( 25%  of the freight Amt.) . rest 75% of freight is abatement Such voilation  may attract to penalty and interest. 

sorry but i disagree with the above members........sec 40(A)3 IS attracted only when payment and exp both exceed 20000/35000........in the above case it wont apply accordingly.......

section 40A(3) is applicable in respect of expenditure an expenditure claimed as deduction under sections 30 to 37

Section 40A (3) It provides that the payment in a single day should not be exceeding Rs. 20000. It doesn’t mean the single payment shouldn’t 20000 but the aggregate amount should not exceed the limit.

Here aggregate amount means when payment of single bill is made in parts for evasion of tax aggregate of all such payments should be considered

Some parties split high value payment into several cash payment for evasion of section 40A (3) a, so this rule is for evasion of payments.

But in case where payments are made to same person in a single day (other wise than account payee cheque, demand draft or any transaction made by banks like RTGS) for different bill which do not exceed 20000, should not be covered under section 40A (3)

so in my opinion sec 40A(3) is not applicable in this case

thanks :)

People who disagree should give case law or any reference material to substantiate their view.

as per sec 40(A)3 ,an exp is disallowed if payment or aggregate of payments made  otherwise than by ac payee cheque/draft to a single person in respect of such exp exceeds 20000/35000..the words IN RESPECT OF SUCH EXP CLEARLY DENOTES THAT THE BILL AMT SHD ALSO >20000/35000.

HI FRIENDS,

DEFINATELY DISALLOWED UNDER SECTION 40A(3) AS THE SECTION TELLS ABOUT THE PAYMENT OR AGGREGATE PAYMENTS MADE TO A PERSON IN A SINGLE DAY IF EXCEEDS RS.35000 IN CASE OF PAYMENT TO TRANSPORT OPERATORS OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT, WOULD DISALLOWED. THUS THE SECTION INTERPRETED WITH REFERENCE TO TOTAL PAYMENTY IN DAY TO A PERSON AND NOT WITH THE REFERENCE TO BILLS AGAINST WHICH  SUCH PAYMENT IS MADE.

REGARDS,

MANOJ