Dismissing the appeal of the revenue the Court held that ;Cash payments exceeding prescribed limits in respect of freight and cartage to drivers is held to be allowable as deduction as the factory is situated in backward area and payments to transporters had to be made in cash because such persons were not having banking facility around factory area.
PCIT v. Lord Chloro Alkali Ltd. (2018) 97 taxmann.com 513/ 258 Taxman 131 (Raj) (HC) Editorial: SLP of revenue is dismissed. PCIT v. Lord Chloro Alkali Ltd. (2018) 258 Taxman 130 (SC)
S. 40A(3) : Expenses or payments not deductible – Cash payments exceeding prescribed limits – Factory was situated in backward area and payments to transporters had to be made in cash because such persons were not having banking facility around factory area Freight and cartage payments to drivers-Held to be allowable as deduction .[ R.6DD ]