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2013 (12) TMI 304 - AT - Income TaxDisallowance of cash payments towards purchase of scrap u/s 40(A)(3) - the assessee has made cash payments to the tune of Rs.32,58,905/- to Railway Department by tendering cash towards purchase of scrap – Held that:- The south western railway for its public auction sale put the general condition that the payment of balance of sale value and delivery of lots should be paid in cash only - Following CIT Vs. Rhydburg Pharmaceuticals Ltd. [2004 (1) TMI 37 - DELHI High Court] – When the payee insisted on cash payment and the transactions were found to be genuine and bonafide – The expenditure shall be allowed - The payment made by the assessee in cash to the south western railway, who insisted for cash payment were covered by the exception laid down in Rule 6DD(b) of the Income-tax Rules 1962, as such, it was outside the purview of the provision contained in sec.40A(3) – Following Sri Devendrappa M Kalal [2012 (8) TMI 188 - ITAT BANGALORE] – Decided in favour of assessee.
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