31 March 2012
Under Section 40A(3)(a) cash payment to a party cannot exceed Rs. 20,000/- while as per circular no. 34, dated 5-3-1970 the provisions of this section do not apply to payment towards purchase of capital assets. Do the provisions apply to payments made for purchase of materials towards construction of Capital Assets? Eg. Can a person pay Rs. 50,000/- in cash to a party in a single day for purchase of stones for construction of his Plant.