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2017 (9) TMI 1512 - AT - Income TaxDisallowance u/s 40A(3) - Held that:- Assessee had filed copies of sale deeds of the lands with the Assessing Officer and Ld. CIT(A) and authorities below did not find any discrepancies in the said sale deeds. The genuineness of the transactions was not doubted. The authorities below has not disbelieved the fact of payments having been made. The identity of the persons to whom payments has been made has been established as the sale deeds were registered with the Revenue authorities. In the case law of Attar Singh Gurmukh Singh vs. ITO (1991 (8) TMI 5 - SUPREME Court) the Hon’ble Supreme Court of India has held that in respect of trading activities no disallowance u/s 40A(3) was warranted. CIT-A restricted disallowance u/s 40A(3) - disallowance of ₹ 1,22,23,250/- consisted of value of land to the tune of ₹ 1,16,02,500/- and the rest were on account of registration charges and other charges - Held that:- We find that the difference of ₹ 1,22,23,250/- and ₹ 1,16,02,500/- is on account of costs of registration which included stamp charges and other miscellaneous expenses, which are specifically exempt u/s 6DDA(i). The Ld. CIT(A) has also noted that the costs of stamp was deposited in cash in State Bank of India, therefore, as per Rules 6DDA(i) such payments are exempted from the provisions of Sec.40A(3) of the Act. Moreover, he has made a finding of fact that out of other expenses non of the expenses exceeded Asst. Year: 2009-10-14 ₹ 20,000/-. In view of the above, Ground No.2 of Revenue is appeal is also dismissed.
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