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Disallowance u/s 40A (3)

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(Querist)
03 February 2010 M/s ABC Pvt Ltd company makes a payment of Rs. 100,000/- in cash towards purchase of Foreign exchange from an Authorised Dealer in Foreign Exchange. Is it an allowable expense?
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CA Vijay Kumar Gupta

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CA Vijay Kumar Gupta (Expert)
03 February 2010 Yes, The transaction is allowed as per Rule 6DD of Income tax Rules
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CA Vijay Kumar Gupta

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CA Vijay Kumar Gupta (Expert)
03 February 2010 Yes, The transaction is allowed as per Rule 6DD of Income tax Rules
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CA Ajay Patel

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CA Ajay Patel (Querist)
04 February 2010 Thank YOu for your reply Sir but as per Rule 6DD of IT Act 1961 such transactions are allowed only to authorised foreign exchange dealer. So I request you to clear my confusion and let me know whether even companies are also allowed such expenses in excess of Rs. 20,000/-
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