Examine with reasons, the allowability of the following expenses incurred by Anand, a wholesale dealer of commodities, under the Income Tax Act, 1961 while computing profit and gains from business or profession for the A

(iii) Purchase of oil seeds of ₹50,000 in cash from a farmer on a banking day: As per rule 6DD (e) of the Income tax Rules, 1962, in case, the payment is made for purchase of agriculture produce directly to the cultivator, grower or producer of such agriculture produce, no disallowance under section 40A(3) of the Income tax Act, 1961 is attracted even though the cash payment for the expense exceeds ₹10,000 in a single day. Therefore, in the given case, cash payment of ₹50,000 made to a farmer is allowable expenditure because disallowance under section 40A(3) is not attracted since cash payment for purchase of oil seeds is made directly to the farmer.