40A(3) Cash payment disallowance

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Lakshman rao Kalamdani (Querist)

05 October 2009 Cash payments in excess of Rs.20,000.00 made by a franchisee / dealer to BSNL (Bharat Sanchar Nigam Limited - a Govt of India undertaking) for purchase of SIM / Currency for resale to sub dealers and consumers, whether to be disallowed u/s 40A(3) or it is exempt from disallowance under Rule 6DD(b) of Income-tax rules 1962. Please clarify

CA SANJAY MUKHERJEE

CA SANJAY MUKHERJEE (Expert)

05 October 2009 Payment to BSNL for purchase of SIM is not exempted under Rule 6DD(b) unless it is paid under any rules framed by the Govt. or payment is required to be made in legal tender.

Hence will be disallowed.

CA CHINTAN AJMERA

CA CHINTAN AJMERA (Expert)

05 October 2009 i think it is exempted.

Lakshman rao Kalamdani

Lakshman rao Kalamdani (Querist)

06 October 2009 Dear Sri Sanjay Mukherjee & Sri Chintan Ajmera,
Thanks for your reply. I have gone through rule 6DD(b)and need to know whether Govt has framed any rules relevant thereto.
Regards,
K.Lakshman Rao
Chartered Accountant
9844235678
Shimoga. Karnataka State

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