Purchase by way of cash

Hi

Under 6DD.4-1, it clearly states and i quote, "The payments made for purchases would also be covered by the word ‘expenditure’ and such payments can be disallowed if they are made in cash in the sum exceeding the amount specified under section 40A(3). . . The rule also contemplates payments made for stock-in-trade and raw materials. …. Section 40A(3) is therefore attracted to payments made for acquiring stock-in-trade and other materials"

Hence, in my view the entire cash payment will be disallowed as per Section 40A(3).

However, Rule 6DD(e) species certain purchases which would not be disallowed : 

Where the payment is made for the purchase of :

1.  Agricultural or forest produce; or
2.  The produce of animal husbandry (including livestock, meat, hides and skins) or dairy or poultry farming; or
3.  Fish or fish products; or
4.  The products of horticulture or apiculture,

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

Hence, the cash payments made by you will not be disallowed.

Regards