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2014 (9) TMI 1082 - AT - Income TaxApplicability of Section 40A(3) - aggregation of cash payment in excess specified limit - Held that:- For applicability of Section 40A(3), it is essential that the aggregate payment made to a person on any day should exceed ₹ 20,000/-. Now, in the contention of the assessee as well as remand report, there is no discussion about the aggregate payment in a day. There is only discussion with regard to the payment not exceeding ₹ 20,000/-. We, therefore, set aside this aspect to the file of the Assessing Officer and direct him to verify the aggregate payment made by the assessee on each day and if the payment in a day does not exceed ₹ 20,000/-, then no disallowance under Section 40A(3) would be made. That if assessee makes the payment not exceeding ₹ 20,000/- every day, it cannot be said that the payment has been made to circumvent the provisions of Section 40A(3). Section 40A(3) would be applicable when the assessee makes payment exceeding ₹ 20,000/- in a day. If there is no payment exceeding ₹ 20,000/- in a day, there is no violation of Section 40A(3), so there is no question of any circumvention of the provisions. - Decided in favour of assessee for statistical purposes.
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