One of the client have business of cotton Ginning and pressing. Their maximum business directly come from Farmer and maximum business is in cash. Now client operate business from different remote location and that is not connected with bank or we can say that bank facility is not available at remote location. For purchase of cotton cash is required and same must be sent through cash only from one branch to another branch(as banking facility is not available).
My question is that if Cash is paid to other party in excess of 20000 then section 269SS is applicable.
But in recent case it is compulsant to transact in case so is there ant specific exemption is available to assessee if they make cash payment to his subsidiary in cash.
27 July 2011
The one you are talking about is Section 40A(3) and not 269SS. Further, Rule 6DD mentions certain exceptions of which the following might apply to your case- 1. In case there are no banking facilities available 2. Amounts paid to primary producer.
For Ginning and Pressing, the purchase is of cotton. So, amount paid to farmer for purchasing cotton is allowed.
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