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2014 (7) TMI 462 - AT - Income TaxApplication of section 40A(3) - purchase of mobile recharge vouchers on a wholesale basis - Involvement of cash payment – withdrawal from ATM - payments which are made by way of direct deposit into the Bank Account of the creditor - Rule 6DD - principal agent relationship - Held that:- Assessee is an individual who has undertaken dealings in mobile recharge vouchers on a wholesale basis – Relying upon S. Rahumathulla Versus Assistant Commissioner of Income-tax [2010 (4) TMI 905 - ITAT COCHIN] - payments made by the assessee towards purchases of Telephone cards were by way of cash which was sought to be disallowed by the AO by invoking section 40A(3) of the Act - there is no scope for invoking the provisions of section 40A(3) of the Act - the disallowance made by the AO by invoking section 40A(3) in the present case is misplaced - provisions of section 40A(3) of the Act are inapplicable in respect of transactions – thus, the order of the CIT(A) and AO is directed to delete the disallowance made by invoking section 40A(3) of the Act – Decided in favour of assessee.
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