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2014 (1) TMI 948 - AT - Income TaxDisallowance made u/s 40A(3) of the Act – lorry hire charges paid in cash – Held that:- The assessee has paid lorry freight charges in cash in violation of provisions of sec. 40A(3) of the Act - The disallowance is prescribed under sec. 40A(3) under a legal fiction and hence the tax authorities have to necessarily comply with it unless it is shown by the assessee that the impugned payments falls within any of the exceptions given under the Act or Rules - The lorry drivers are collecting payments on behalf of the lorry owners and they cannot be considered as the agents of the assessee - The assessee is neither the owner of the vehicle nor the owner of the goods carried – Thus, the contention of the assessee that the lorry drivers are acting as the agent of the assessee is not correct – the assessee failed to show that the payments made by it in violation of the provisions of sec. 40A(3) of the Act is covered by any of the exceptions provided under Rule 6DD of the Income Tax Rules – order of the CIT(A) in confirming the disallowance made by the Assessing Officer u/s. 40A(3) of the Act upheld – Decided against Assessee.
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