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2013 (9) TMI 874 - ALLAHABAD HIGH COURTDisallowance on the ground of section 40A(3) of the Income Tax Act – Cash payment in excess of Rs. 20,000 to Arahtiya - kachcha Arahtiya - Held that:- Assessee was maintaining all the books of account and also accounts on all statutory forms required under the U.P. Krishi Utpadan Mandi Adhiniyam, 1962. Rule 6DD (e) and (k) of the Income Tax Rules are clearly attracted in the case as the purchases were made in the present case in commission agency business from the farmers - Whenever purchases were made through commission agents 'kachcha Arahtiya' payment was made in cash to make such payments to the farmers. Rule 6DD(e) is applicable as exemption where the payment is made for the purchase of agricultural produce from purchaser. Rule 6DD (k) is attracted, where the payment is made by any person through agent, who is required to make payment in cash for goods or services on behalf of such persons - The payments, therefore, could not have been disallowed on the ground of the violation of Section 40A (3) of the Act – Decided against the Revenue.
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