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CASH PAYMENT ABOVE 20,000

This query is : Resolved 
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(Querist)
15 July 2011 In a Mobile Trading Co., there were payments above 20,000 in cash to Mobile Vendors.

1. Is this allowable in Income Tax?
2. If not, then what is the way to make payment to them if the vendors wants payment in cash and not in DD/ Cheque.
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Ravikant

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Ravikant (Expert)
15 July 2011 This is disallowed,
But if they insist on cash payment and for any genuine reasons, then you can claim it under 2nd proviso to 40A3 on business expediency basis
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