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2016 (8) TMI 315 - AT - Income TaxDisallowance u/s. 40A(3) - proof of payment of expenditure through banking channel - Journal entries - Held that:- We find that the ld. CIT(A) has deleted disallowance of ₹ 21.50 lacs as made by the Assessing Officer u/s. 40A(3) of the act by concluding that the same does not apply. He holds that the assessee has made FDR payment of ₹ 1 lacs over and above that agreed with the vendor and the same is not allowable as business expenditure. We find that the CIT(A) takes note of the case that the assessee has made payments of ₹ 20 lacs on 14-05-2012 and 15-05-2012 to Shri Kurkutia as land development expenses. He also placed on record relevant ledger account to prove that the same are paid through banking channel. This prima-facie rebuts case of the lower authorities that there was no land development agreement between assessee and his payees. We further notice that these ledger account could not be produced before the CIT(A) in course of the lower appellate proceedings. We feel it appropriate in larger interest of justice that the ld Assessing Officer needs to re-adjudicate the entire issue in view of all these developments as per law after affording adequate opportunity of hearing to the assessee.
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