Hi,
We are in the business of agricultural commodities. We usually purchase the material from farmers in the village and then sell it. Earlier we used to purchase the material in cash from farmers as much as we want as there was no concept of cheque earlier. Now we are using cheques to purchase it. But some farmers dont have the bank ac with them so there is no other option left instead of paying them in cash. Is it legal now to purchase the material in cash from farmers, if yes then what is the limit and what proof do we have to produce during the audit about the price and quantity purchased from the farmers.
CAclubindia
