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2012 (10) TMI 561 - AT - Income TaxDisallowance of Payments made in Cash u/s 40A - payment of sister concerns - determination of nature of payment - payment towards expenditure or repayment of loan / advances - held that:- the maximum amount that could be considered for disallowance under Section 40A(3) of the Act was Rs. 75,000/- for assessment year 2003-04 and Rs. 2,96,148.45 for assessment year 2004-05. - Insofar as the claim of the assessee that the payments were all made to sister concerns, there is no exemption given under Section 40A(3) for payments effected to sister concerns. - Decided against the assessee. Reopening of an assessment - supply of reasons to assessee - held that:- when a notice under Section 148 was issued and assessee, after filing the return, sought reasons for the notice, Assessing Officer was bound to furnish the reasons within a reasonable time. - when any objections were filed by the assessee, Assessing Officer was bound to dispose of such objections by passing a speaking order. - If the said procedure is not followed, the orders of lower authorities have to be set aside and the matter remitted back to the file of the A.O. for re-adjudication after supplying copies of reasons recorded.
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