A Company Has a Branch In Himachal pradesh its Reg. office is in pune, it is starting manufacturing products at h.p branch for that they have incurred quiet a lot of expenditure and some payments have been made ao above 20000/- in cash by a person there in h.p of the company. thje Company has paid that person the amount by RTGS to his account,and then he has made the payments to the party in cash in himalchal prades...are these expenditure allowed as per Sec 40(a) Expences.. pls Reply Quickly....
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Sec 40(a) expenses above 20000/- in cash
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Section 40A(3) a It provides that any expenditure incurred as a payment in sum of exceeding Rs.20000/- otherwise of paying with payee account cheque, demand draft or any transaction made by banks like RTGS, shall not be allowed as a deduction. However if payment is being made for hiring or leasing, the limit is 35000.
So in your case payments made above Rs. 20,000/- in a day is disallowed.
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