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2014 (2) TMI 1021 - AT - Income TaxAddition made u/s 40A(3) of the Act - Claim of exemption in respect of cash payments – Held that:- The decision in Sahitya Housing Pvt. Ltd. vs. DCIT [2014 (2) TMI 811 - ITAT HYDERABAD] followed - There was no choice for the assessee except to make the payments in cash due to exceptional or unavoidable circumstances as provided under Rule 6DD - since there is no evidence brought on record by the AO to suggest the availability of banking facility in the place where the properties were purchased by the assessee - as per Rule 6DD(g) the disallowance cannot be made u/s 40A(3) of the Act – thus, the CIT(A) is justified in deleting the addition. Addition of payments were made to agents – Held that:- The strong contention of the Department is that the above agents worked for other persons as agents and they cannot be agents to the assessee - There is no prohibition or restriction on a middleman to work as agent of different parties, if he was acting on behalf of the assessee as agent - The assessee's case falls under the purview of clause 6DD(k) of IT Rules, 1962 – thus, exemption is to be given and addition cannot be made u/s 40A(3) of the Act - The reasons advanced by the Department are not appropriate – thus, the claim of the assessee is allowed – Decided partly in favour of Assessee.
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