Provision of section 40A(3) doesn’t apply when payment for expenses are made by a person to an agent

Piprani Equipment P. Ltd. Vs ITO (ITAT Ahmedabad)

ITAT Ahmedabad held that clause (k) of Rule 6DD specifies that where payment for expenses are made by a person to an agent who is required to make payment in cash on behalf of such person, then rigours of section 40A(3) are not applicable.

Facts-

A.O. observed that the assessee had made payment in cash exceeding the limit specified u/s 40(A)(3) of the Act on purchase of five old vehicles/JCB Machines on various dates

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