section 40A(3) of the Income Tax Act 1961

[Rakesh Bansal]

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)?

[wig sinbad]

please clarify if both vendors have separate registrations under the central / state tax legislations, such as Central Excise / service tax/ / VAT

[Rakesh Bansal]

The vendors are whole sellers of liquor. They have separate license under the state excise act and separate vat registration numbers.however their TAN for deduction/collection of tax at source is same.

AI Summary

Aggregation of payments under section 40A(3): separate branch cash payments to same owner may be treated collectively for disallowance. Whether cash payments on the same day to two vendor outlets later found to have a common proprietor are to be aggregated under section 40A(3) is queried. Facts: two cash payments to different vendors, each holding separate state excise licences and separate VAT registrations, but sharing the same TAN and common ownership. The core issue is whether separate registrations suffice to treat payments as distinct or whether common ownership and identical tax identifiers warrant collective treatment for disallowance.