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2019 (12) TMI 1330 - AT - Income TaxAddition u/s 40A - Expenditure in cash - HELD THAT:- Section 40A(3) contemplates that where assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on bank account excess ₹ 20,000/- then no deduction shall be allowed in respect of such payment. Rule 6DD of Income Tax Rules, 1962 provide an exemption from applicability of this clause, and the ld.CIT(A) has followed rule 6DD which has been explained by the Board in its Circular No.220. This explanation has been submitted by the assessee in its written submissions reproduced by the ld.CIT(A) on page no.7. CIT(A) is of the opinion that the case of the assessee falls within the exception because it has made this payment on account of business exigency and it was not practical to make the payment through account payee cheque. - Decided in favour of assessee.
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