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2018 (10) TMI 1340 - AT - Income TaxAddition u/s 40A - cash payment exceeding permissible limits - whether payment do fall under the exception provided under Rule 6DD of the IT Rules? - Held that:- No doubt the AO called the sale deeds and other details and assessment is completed under section 143(3) of the Act. When assessee has purchased the property in the name of M/s.Sritanuja Builders & Developers for total consideration of ₹ 59,10,000/-when assessee has paid ₹ 42,10,000/- in cash, AO ought to have been called the details and examined the issue whether section 40A(3) shall attracts or not. AO simply passed the assessment order in mechanical manner without examining the details of the property and the another property purchased by the assessee subsequently within 20 days, the assessment is completed. In our opinion, the order passed by AO is erroneous and also prejudicial to the interests of the Revenue. Therefore Commissioner has rightly appreciated the facts of the case and considered all the issues after calling the explanation from the assessee by considering the same, he passed the order and directed the AO to disallow the expenditure being a cash payment made to the land owners is in violation of the provisions of section 40A(3) as the said payment do not fall under the exception provided under Rule 6DD of the IT Rules - Decided against assessee.
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