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2011 (3) TMI 1349 - AT - Income TaxDisallowance u/s 40A(3) - Cash payment - Rule 6DD(j) - The mode of payment to the publishers depends upon circumstances, time and obligation imposed on assessee - since procedure laid down by newspapers for delivery of matters and making mode of payments, the assessee had to follow such procedure in order to give effect to the orders of the principals who sought for advertisement - assessee will derive extra benefit of commission at the rate of 5 per cent for payments made in cash to the newspapers - It can be said that it would generally satisfy the requirements of rule 6DD(j), if a letter to the above effect is produced in respect of each transaction falling within the categories listed above from the seller giving full particulars of his address, sales tax number/permanent account number, if any, for the purposes of proper identification to enable the Income-tax Officer to satisfy himself about the genuineness of the transaction - Assessee acted as an agent but claimed this payment as expenses and these payments are surely covered under section 40A(3) of the Act, as expenses claimed by the assessee - The assessee is unable to show that these payments were made in cash at the insistence of BPL, there is no exception provided in the Rules, that in case the payments are made even during evening hours that will take this payment out of the purview of section 40A(3) of the Act on regularly basis i.e., on daily basis - Decided against the assessee
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