Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (11) TMI 55 - AT - Income TaxDisallowance of 20% of the payments made in cash exceeding Rs.20,000/- u/s 40A(3) of the IT Act – Held that:- AO needs to examine as to whether the transactions of the assessee with the sellers was for the first time, wherever it is found that a new transaction for the first time with the said party, then the assessee shall get the relief - if it is found that the assessee has been dealing with the said parties earlier also and has been making payments in cash and also by cheques, the AO is directed to verify the cash payments or the cheque payments followed by the cash payments and only if it is found that the cheque payments followed the cash payments, it can be presumed that the assessee has gained the confidence and the said parties started accepting the cheque payments by the assessee - payments made by the assessee in cash exceeding Rs.20.000/- ought to be accepted as having been made for the purpose of business expediency of the assessee firm - matter remanded to AO
|