Purchase at metro cash and carry

Rajkiran (25 Points)

28 July 2011

Hi,

Just wanted to check whether purchases made in excess of Rs 20,000/- in Metro Cash and Carry will attract section 40A(3).

It is well known that purcases in Metro is only in cash

Thanks

Reply
Follow
Share

3 Replies

vishnupriya (CA Final) (1418 Points)
Replied 28 July 2011

Yes that amount will be disallowed U/s 40A(3)

because Metro Cash & carry is not mentioned in Rule 6DD.........

vishnupriya (CA Final) (1418 Points)
Replied 28 July 2011

From Rule 6DD

"where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person"

the above point is also not applicable becuase there will be no agency relationship between Metro and its buyers

hence the amount is disallowed.............

Snehal (Learning Tax) (129 Points)
Replied 28 July 2011

The Expense will be disallowed as in excess of Rs. 20,000/-

Start a New Discussion