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2018 (7) TMI 2039 - AT - Income TaxAddition u/s 40A(3) - purchases in cash - commercial expediency - Cash payments were accounted in the books of accounts of the supplier. - HELD THAT:- Primary object of enacting section 40A(3) of the Act was two fold, viz: 1) Putting a check on trading transactions with a mind to evade the liability to tax on income earned out of such transactions and 2) To inculcate the banking habits amongst the business community. Cash payments were accounted in the books of accounts of the supplier. The assessee also furnished the copy of the balance sheet wherein the PNB bank is reported in the assets side of the balance sheet. The AO during the assessment proceedings has called for the information from the supplier, Mr.Vijay Kapoor, who has confirmed the sales to the assessee as well as receipt of the proceeds either in cash or bank deposits. From the above it is clear that both the purchases and sales were duly accounted in the books of accounts of the assessee as well as the supplier. Therefore, there were no unaccounted transactions and the entire transactions were accounted. That being so, we decline to interfere in the order passed by the ld. CIT(A) and his order on this issue is hereby upheld and the grounds raised by the Revenue is dismissed.
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