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cash payment more than 20,000
My client runs hotel business, he was purchased rice and fire wood by paying cash of rs 1,36,800 and 56,700 respectively on 20 April 2016 from two different local wendors, whether the expenses are disallowed us 40a(3) or treated as allowable expense us 6DD ie., purchase of agriculture products.
Replies (2)
It will be disallowed.........
Read sub rule (e) of rule 6DD, for exemption....... as follows:
" e) Where the payment is made for the purchase of
i. agricultural or forest produce; or
ii. the produce of animal husbandry (including livestock, meat, hides and skins) or dairy or poultry farming; or
iii. fish or fish products; or
iv. the product of horticulture or apiculture,
to the cultivator, grower or producer of such articles, produce or products"
(AND not trader of such articles or products)
It will be disallowed if these are not purchased from directly from Farmer.
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