Tribunal Rules Cash Payments in Compliance with Section 40A(3) Exemption for Milk Distributor's Verifiable Transactions.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The Appellate Tribunal considered an issue related to the disallowance of expenditure in cash exceeding the permissible limit u/s 40A. The assessee, a milk distributor, received milk products from a main supplier and conducted sales through sub-distributors, with payments made in cash through banking channels. Despite high turnover and low margins, the Tribunal referred to relevant case precedents to establish that payments made to others could be verified, thus exempting them from section 40A(3). It was found that the payee had also acted as the assessee's agent and was required to make cash payments to the company, leading to the deletion of the disallowance. The decision favored the assessee based on the provided evidence and legal interpretations.....