https://www.taxtmi.com/caselaws?id=5339 SC held that s.40A(3) authorises the AO to disallow expenditure paid in cash exceeding Rs.2,500, and that payments for acquisition of stock-in-trade and raw materials fall within "expenditure" under the provision. The requirement of payment by crossed cheque/bank draft is to detect payments from undisclosed sources, but the provision is not absolute: an assessee may satisfy the AO that payment in the prescribed manner was impracticable or identify the cash payee. Rule 6DD affords exemptions in specified circumstances (e.g., certain agricultural purchases, no banking facility). Appeals dismissed. en-us Wed, 07 Aug 1991 00:00:00 +0530 Fri, 27 Mar 2026 16:46:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=5339 SC held that s.40A(3) authorises the AO to disallow expenditure paid in cash exceeding Rs.2,500, and that payments for acquisition of stock-in-trade and raw materials fall within "expenditure" under the provision. The requirement of payment by crossed cheque/bank draft is to detect payments from undisclosed sources, but the provision is not absolute: an assessee may satisfy the AO that payment in the prescribed manner was impracticable or identify the cash payee. Rule 6DD affords exemptions in specified circumstances (e.g., certain agricultural purchases, no banking facility). Appeals dismissed. Case-Laws Income Tax Wed, 07 Aug 1991 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=5339