A person purchased certain goods from two different vendors and made payment in cash to both of them on the same day. After the close of the year he found that the owner of both the vendors is same person.
Question: Whether the payment made to the same person though to different branches will be considered collectively and the payer has to bear the disallowance under section 40A(3)?
Payments to Vendors with Same Owner Considered Separately Under Section 40A(3) Due to Separate Registrations A person purchased goods from two vendors and paid in cash on the same day, later discovering both vendors are owned by the same individual. The question raised was whether these payments would be considered collectively under section 40A(3) of the Income Tax Act, leading to disallowance. One reply sought clarification on the vendors' separate registrations under tax laws. It was clarified that the vendors, both liquor wholesalers, have separate state excise licenses and VAT registration numbers, but share the same TAN for tax deduction/collection. (AI Summary)
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