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2016 (4) TMI 637 - HC - Income TaxAddition u/s 40A(3) - Held that:- Submission of the Revenue suffers from a fallacy as it does not take into account the fact that the assessment involved in the present matter is for the year 2007-08, whereas sub-section (3) of Section 40A of the Act has undergone an amendment with effect from 01.04.2009, i.e., for the assessment year 2009-10 onwards, under which it is now provided that no deduction shall be allowed in respect of an expenditure incurred by the assessee in which aggregate payment made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds ₹ 20,000/-. Prior to that the provision in existence merely provided for expenditure in respect of which payment exceeding ₹ 20,000/- was made and there was no provision regarding aggregate of payments to a person in a day. It is not in dispute that in the present matter not a single payment has been made through any voucher exceeding ₹ 20,000/-. Thus, it was not open to the Assessing Officer to have aggregated the said payment. Moreover, the extant provision for the said assessment year also had a proviso by which even if the payment in cash exceeded ₹ 20,000/-, then in such cases and under such circumstances as may have been prescribed, having regard to the nature and extent of banking facilities available, considerations of business expediency and other relevant factors, the disallowance may not have been made. In the present matter, the Tribunal and the CIT (Appeals) have also considered the further explanation made by the assessee with regard to multiple payments to the same person, including the fact that subsequent payment in most of the cases was made after mid night of the day but wrongly recorded by the employees of the assessee as the same day since in the course of working day after mid night the lorry has to be loaded and the Tribunal and CIT (Appeals) have accepted the said explanations also. - Decided in favour of assessee
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