Expenditure u/s 40A(3), Income Tax

[BSNL PUNJAB TELECOM CIRCLE]

A company is involved in Real Estate Business and it purchases land on which constructions activity is carried out and is sold in the form of flats. Certain amount of cash in excess of Rs. 20000/- has been paid against purchase of land. Finally, the land will not be capitalised in the books of accounts. Further, Please advise whether the same will be disallowed u/s 40A(3) of the Income Tax Act, 1961. or not.

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[GOPALJI AGRAWAL]

Please find out the ways in exceptions mentioned in rule 6DD.