SH made three different cash payments of ₹10,000, ₹10,000 and of ₹11,500 to a supplier for purchase of goods and material on 11th Sept., 2017. The payments were made during different times in the day. Amount to be disall
CS Executive · Tax Laws and Practice · PYQS · June 2018
SH made three different cash payments of ₹10,000, ₹10,000 and of ₹11,500 to a supplier for purchase of goods and material on 11th Sept., 2017. The payments were made during different times in the day. Amount to be disallowed u/s 40A(3) is:
Answer & Explanation:
Correct Answer: Option (A)
Official answer key: (A), (B). Official source note: The options A or B are correct. Assumption 1: If the payment is made against one bill then entire ₹ 31500 is taxable i.e. option B is correct. Assumption 2: If payment is made against three different bills of different dates then only ₹ 11500 is taxable i.e Option A is correct.
Topics: Income Tax
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