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2016 (2) TMI 397 - AT - Income TaxDisallowance u/s 40A - Held that:- The official proclamation that sub-section (3) of section 40A is being substituted to nullify the loophole created by the judicial decisions, the legal position remains the same even after the said substitution. The newly substituted subsection (3) contains the phrase "a payment or aggregate of payments made to a person in a day." .This expression is analogous to the phrase "in a sum" used in erstwhile Sec.40A(3) of the Act. The new provision contains "in a day". Therefore, the judicial interpretation of the expression "in a sum", i.e., a single sum, would equally apply in interpreting the expression "in a day" to mean a single day. Therefore the new sub-section (3) of the Act also will not apply when a payment to one person on a single day in the aggregate does not exceeding twenty thousand rupees. In other words, in each day, an assessee can make cash payment upto twenty thousand rupees, without any statutory bar. The CIT(A) in our view has therefore rightly given directions to the AO to verify if payment to one person on a single day exceeds ₹ 20,000/-. We do not find any infirmity in the order of the CIT(A). Unexplained cash credits u/s. 68 - Held that:- Once the firm has satisfactorily explained that the credit entries in the name of its partners represent the amount invested by them the burden of proof stood discharged and the amount cannot be treated as income of the firm under s. 68. In the light of the legal position stated above and in the light fact that the Assessee has satisfactorily shown receipt of cash from the partners the cash credit in question should be considered as satisfactorily explained. For the reasons given above, we do not find any grounds with the order of the CIT(A) in deleting the addition. Addition made u/s.40(a)(ia) - non deduction of tds - Held that:- Following the decision of the Hon’ble Supreme Court in the case of Vegetable Products Ltd. (1973 (1) TMI 1 - SUPREME Court), we hold that where two views are possible on an issue, the view in favour of the assessee has to be preferred. Disallowance of trick hire charges - Held that:- We are of the view that the disallowance is reasonable considering the quantum of expenditure for which there were no proper vouchers. The Assessee has not demonstrated that the quantum of expenditure on truck hire charges and receipts from plying trucks on hire in the present AY compares favourably with the expenditure on truck hire charges and receipts from plying of truck on hire in the past AYs. We therefore uphold the order of the CIT(A) on this issue.
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