Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (12) TMI 596 - AT - Income TaxDisallowance u/s 40A(3) - payments in cash as specified in Rule 6DD - HELD THAT:- Nature of expenditure incurred by the assessee under the car hire charges, which is disallowed by the Assessing Officer u/s 40A(3) and sustained by the CIT(Appeals) to the extent of ₹ 1,03,500/- is such that the same is covered by the proviso to section 40A(3) being payment made for plying, hiring or leasing goods carriages and since the payments of such expenditure was made by the assessee in cash not exceeding a sum of ₹ 35,000/-, the disallowance confirmed by the ld. CIT(Appeals) is not sustainable. Delete the said disallowance sustained by the CIT(Appeals) to the extent and allow Ground No. 1 of the assessee’s appeal. Disallowance of electricity, power and fuel - as contended that the actual nature of the expenditure is to be seen keeping in view the underlying purpose of incurring such expenditure and not the treatment given in the books of account while booking the said expenditure - HELD THAT:- We are unable to accept this contention of the ld. Counsel for the assessee. The relevant proviso to section 40A(3) is applicable only in the case of payment made for plying, hiring or leasing goods carriages and the benefit of the same, in my opinion, cannot be extended to cover the expenditure incurred on power and fuel irrespective of the nature of such expenditure or the nature of the assessee’s business. Therefore, find no merit in Ground No. 2 raised by the assessee in this appeal and dismiss the same. Addition u/s 40A(3) - HELD THAT:- What is relevant for the purpose of applicability of section 40A(3) is a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a Bank or account payee Bank Draft against any expenditure incurred by the assessee exceeding the specified limit of ₹ 20,000/- as applicable to the year under consideration. In the present case, such payments in cash were made by the assessee in respect of certain expenditure incurred as enumerated by the CIT(Appeals) in his impugned order exceeding the specified limit of ₹ 20,000/- and since the disallowance made by the AO u/s 40A(3) only to the extent of such payment/payments was sustained by the CIT(Appeals), I find no infirmity in the same calling for any interference. - Decided against assessee.
|