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2016 (9) TMI 71 - HC - Income TaxRevision u/s 263 - addition u/s 40A(3) - AO limited the disallowance only to 20% of expenditure - CIT(A) directed the Assessing Officer to verify the genuineness of the claim of purchases of URD Kapas by making necessary investigation and verification in respect of agricultural land holding, crop taken and actual purchases by the assessee from the concerned traders and then pass a fresh order of assessment - Held that:- As noted, the Assessing Officer in the process of framing assessment had made inquiries with the assessee regarding cash payments in excess of ₹ 20,000/-. The assessee pointed out that such payments were for purchase of cotton and the payments were made to the producers. This being an agricultural products such payments would be outside the purview of Section 40A(3) of the Act. The Commissioner, however, found that there were certain discrepancies in the records produced. We notice that the assessee had produced list of hundreds of farmers, producers to whom such payments were made and documents concerning their lands were also produced. Merely because there were some minor discrepancies in some of them would not be sufficient to conclude that the Assessing Officer did not make a proper inquiry. The revisional powers could not have been exercised for making better or further inquiry. - Decided against revenue
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