Cash payments to creditors

1. Yes, cash payments can be made to creditors provided the same is within the limit of Rs. 10,000. 
2. If not, then as per sec 40A(3) the same will be disallowed while computing income tax liability. 
3. So, the cash payment limit would be Rs.10,000 per day to a single person for a transaction. 
Please correct me if the above solution has an alternative view. 

Amount is limited to Rs. 10,000. per transaction per person

Is there any limit for the credit obtained ?

Is there any limit for the credit obtained ?

1. There is no such limit for credit obtained with respect to IT. 
2. Credit limits are based on an agreement between the parties. 
3. No limit as such with respect to the IT act. 
Please correct me if the above solution has an alternative view.