The assessee, engaged in wholesale trading of raw meat and animal wastes purchased cash purchases were below Rs. 20,000/-each. The AO disallowed the expenses, which is affirmed by CIT(A). On appeal the Tribunal held that payment is covered under rule 6DD(e)(ii), as vendors lacked bank accounts and purchases were from remote areas. Accordingly deleted the disallowances. (AY. 2012-13)
Gyasuddin Qureshi v. ITO (2024) 206 ITD 156 (Delhi)(Trib.)
S. 40A(3) :Expenses or payments not deductible-Cash payments exceeding prescribed limits-Wholesale trading of raw meat and animal wastes-Cash purchases below Rs. 20,000 each-Vendors lacking bank accounts and purchases being from remote areas-Disallowance is deleted.[R.6DD(e) (ii)]