Disallowability of expenses U/s 40 A (3) of I.T. Act

Please provide your expert opnion:

X Co. has given a contract for construction of factory to  A Co. (contractor).
X Co. purchased some TMT bars (construction materials) of Rs. 80,000/- in cash from a single party on a single day on behalf of A Co. and debited the account of A Co. in its books of accounts and credited cash. The bills and other documents are in the name of A Co.

I seek your opinion that whether the provisions of Sec. 40 A (3) of I.T. Act are attracted, if yes who of the two parties would be disallowed...??