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2014 (11) TMI 514 - HC - Income TaxInvocation of section 40A(3) – Amount remitted to the account of recipient in bank - cash payment – Held that:- The payment was in cash but it was deposited into the bank account of the recipient - It is not a case where the cash was paid by the assessee and was received by the recipient - An instance of cash being credited to the account of the recipient stands on a higher footing, compared to the different heads, under Rule 6DD of the Rules when payment of cash, even to the banks and other statutory agencies, is recognized, there is no reason why the deposit of cash into the bank account of a recipient cannot be regarded as qualifying for allowances. The objective under the Act is to ensure that the income of an assessee is levied tax and every step is taken to ensure that no part of the income escapes the taxation - The prohibition contained under Section 40A(3) of the Act is more a matter, which genuinely falls in the realm of the Banking Regulation Act - A provision of that nature cannot be understood just in grammatical manner - In Commissioner of Income Tax v. Smt. Shelly Passi [2013 (3) TMI 219 - PUNJAB AND HARYANA HIGH COURT] it has been held that the cash deposited to the bank account of a recipient does not fall within the purview of Section 40A(3) – the order of the Tribunal is upheld – Decided against revenue.
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