Legal or illegal

Here it is not a matter of illegal or legal because it is allowed under companies act 1956 as an expenditure.Generally a matter which is legal is not illegal in any other act.and the theme is just to track all high value transcations so that no one can escape from tax liability

Refer to section 40 and 68 of IT Act.

its not legal or illegal question 

it is just question of allowablity in calculating taxable income

First you understand the meaning of legal and illegal. Legal means as per the law and illigal means against the law in simple words.  cash transactions are not illegal upto the extent which is not prohibited by any law.   If it is prohibited or regulated then beyond that level it is illegal.

are dude don t take tension. hamare politicin bhi cash transaction hi karte he......to ham kare usme konsi galat bat he.

its not illegal 

but this is only to reduce tax evasion 

any cash trasantion in bussines above Rs. 20000.00 in  income tax law is illegal

Any illegal transactions are disallowed, but transactions which are disallowed are not illegal. Illegal is a very strong word in Income tax. That section has been inserted only to curb tax evasion. There are plenty of cases where a transaction is disallowed but after the assessee goes for appeal, the disallowance is then lifted.

it is legal. but  if d transaction value is over 20000 deduction is not allowed.........