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2011 (10) TMI 639 - ITAT JAIPURDisallowance made under section 40A(3) - Rule 6DD applicability - - Held that:- The provisions of section 40A(3) says that if the cash payment exceeds ₹ 20,000/- and they do not fall under the exceptional clause of Rule 6DD, then addition @ 20% of such cash payment has to be made. However, the background of the case has to be seen and it should be enquired whether there is any real difficulty with the assessee to make payment in cash. In the present case it is seen that assessee was forced to make cash payment as agriculturists were not ready to accept the cheques as many other purchasers were available in the market and willing to pay in cash. Being a prudent businessman, the assessee thought it proper to make cash payment so that their agreement of purchase of land may not be cancelled or agriculturists may refuse to sell the land to assessee the next day. In view of these facts and circumstances we are of the view that case of the assessee falls under the exceptional clause of Rule 6DD of IT Rules.
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