Applicability of sec 40a(3) - reg

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Padmanabha Rao (Querist)
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21 October 2012 Sir,
Electricity Charges paid more than Rs.20,000/- and payment to Agrl. Market Committee more than Rs.20,000/- at a time will attract disallowance u/s 40A(3)- any case laws - please explain
Thanks

shivaji prasad bhimavarapu

shivaji prasad bhimavarapu (Expert)
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21 October 2012 Rule 6 DD prescribes the payments which are NOT covered for disallowance though payment exceeds Rs.20,000/-payment made to State or Central Govt is not covered hence Electricity charges are not covered for disallowance U/s40A(3).Paymnet to Agricultural Market Committees are covered,in my opinion.Because, Agl.Mkt Committee is NOT cultivator/Producer/grower of the Ag.Commodity.Hence above Rs.20,000/- payments will attract disallowance u/s 40 A(3).