Payment exceed rs. 20000 in cash

Tax queries 1723 views 21 replies

Toshar Ahuja

Chartered Accountant

107 Points Posted on 21 February 2014

I have a query regarding payment exceeding Rs. 20000 in cash.

1. One of my client has a poultry farm and he has paid Rs. 20000 in cash in a single day against a bill for purchase of egg trays from a producer.

2. One of my client is a grower of apples and he has paid Rs. 20000 in cash in a single day against a bill for purchase of apple trays from a producer.

Are that both transactions covered under Rule 6DD or not ????

Replies (21)

@CS Siddharth Bumb.

B.Com CA Final CS

5270 Points Posted on 21 February 2014

As per my knowledge they both should cover under Rule 6DD...

Guest

No disallowance where the payment is made for the purchase of—

(i) agricultural or forest produce ; or

(ii) the produce of animal husbandry (including hides and skins) or dairy or poultry farming ; or

(iii) fish or fish products ; or

(iv) the products of horticulture or apiculture,

to the cultivator, grower or producer of such articles, produce or products;

sumith raja

Student CA Final

41 Points Posted on 21 February 2014

I donot think it should not be disallowed as this rule is applicale only for revenue expenses.Purchase f Trays are capital expenses. hence the said expenditure needs not be disallowed

CA SUKSHAM ARORA

569 Points Posted on 21 February 2014

I AGREE WITH THE ABOVE DISCUSSION.

vidit

Service class

100 Points Posted on 21 February 2014

It is covered under rule 6dd

sumith raja

Student CA Final

41 Points Posted on 21 February 2014

Originally posted by : Madhavi Pandit
	No disallowance where the payment is made for the purchase of— (i) agricultural or forest produce ; or (ii) the produce of animal husbandry (including hides and skins) or dairy or poultry farming ; or (iii) fish or fish products ; or (iv) the products of horticulture or apiculture, to the cultivator, grower or producer of such articles, produce or products;

It is to be noted that payment hs been made for purchase of Trays and not for purchase of agricutural produce. This explaination cannot be justified as per my Knowledge

Keshav

Article assistant

31 Points Posted on 21 February 2014

Agreed with sumith raja,trays are neither agricultural produce nor poultry products

Proshanto Kundu

CA-Final STUDENT

235 Points Posted on 21 February 2014

Both Are covered under Rule 6DD!

PRASANNA C ATHAVALE

Manager - Accounts

24 Points Posted on 21 February 2014

I agree with Ms Madhavi Pandit

VIVEK MALAVE

Chartered Accountant

378 Points Posted on 21 February 2014

Heyyy I hav query that 1) adavance payment above rs 20000 for different expenses incurred by him for co paid to employee disallowable??? 2) book adj for expenses settlement amt above rs 20000 disalliwable?????

VIVEK MALAVE

Chartered Accountant

378 Points Posted on 21 February 2014

Guest

I assumed that the purchase of egg trays and apple trays means purchase of eggs and apples along with the disposable cardboard/ paper trays (the ones we see in fruit shops.) If only fixed assets (Trays) are purchased which are reusable for a long time, then also the expenditure won't be disallowed as it is capital expenditure.