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2019 (8) TMI 1130 - DELHI HIGH COURTAddition u/s 40A(3) - substantial cash payments towards purchases - ITAT held that the parties have confirmed the sales made to the assessee and this was the first year of assessee’s business, therefore, there was all the more reason for the suppliers to insist for cash payments - HELD THAT:- If the AO had a doubt about the genuineness of the above purchases, the AO could have summoned one or all of those three parties and asked them questions in relation to the confirmation letters, to satisfy himself that the contents thereof were, in fact, based on actual purchases for which cash was paid by the Assessee. He could have asked them to produce their books of accounts, bill books, etc. On its part, the Assessee appears to have made the effort of producing the confirmation letters from the three parties before the CIT (A) and it was on that basis the CIT (A) rendered the factual finding that the Assessee was constrained to make the cash purchases due to ‘exceptional or unavoidable circumstances’, as envisaged in 6 DD (j) of the Rules. The Court is unable to find any legal infirmity in the impugned order of the CIT (A), which has been confirmed by the ITAT in the order under appeal.- Decided in favour of assessee.
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