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2011 (3) TMI 95 - HC - Income TaxBlock Assessment - Estimation of income based on GP rate - Sec. 158BB - Disallowance of cash payment in excess of Rs. 20,000 u/s 40A(3) -Held that: - If the expenditures which are legally not permissible has been taken into account, the same can certainly be disallowed - Rule 6DD of the Rules allows cash expenditure to be taken into account if circumstances in which the expenditure is incurred can reasonably explained. In the present case, the assessee has not been able to cover its case under rule 6DD. In the circumstances, the Assessing Officer was justified in disallowing expenditures incurred in contravention of section 40A(3). - Accordingly, we hold that addition made by the Assessing Officer was justified - Decided in favor of revenue.
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