Dismissing the appeal of the revenue the Court held that ;Agricultural produce ie. Paddy purchased from the famers by making cash payments exceeding prescribed limits , no disallowance can be made. S.40A(3) is a deeming provision and rule 6DD exempts agricultural produce . ( AY. 2001-02)
CIT v Keerthi Agro Mills (P.) Ltd. ( 2017) 405 ITR 192/ 87 taxmann.com 31 ( Ker) (HC) Editorial: SLP of revenue is dismissed ;PCIT v. Keerthi Agro Mills (P.) Ltd. (2018) 257 Taxman 1 (SC)
S. 40A(3) :Expenses or payments not deductible – Cash payments exceeding prescribed limits – Agricultural produce – Paddy from farmers- No disallowance can be made [ R.6DD ]