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2019 (11) TMI 510 - ITAT JAIPURIncome from other sources - Addition u/s 40A(3) - cash payment exceeding prescribed threshold - income of the assessee has been assessed under the head “income from other sources” - HELD THAT:- Assessing Officer has himself stated that the assessee has claimed deduction u/s 57 and out of total expenses, ₹ 3,48,150/- has been disallowed by invoking the provisions of section 40A(3) of the Act. It is no doubt true that section 40A(3) of the Act relates to expenditure under the head “Income from business/profession”. However, by virtue of section 58 provisions of section 40A(3) are equally applicable where the income of the assessee is assessed under the head “income from other sources”. Even though the Assessing Officer has not specifically stated so while invoking section 40A(3) of the Act, however, mere omission of reference to section 58 by the Assessing Officer would not render the addition so made by the Assessing Officer untenable in law given that the substance of the transactions relates to cash payment exceeding ₹ 20,000/- which is not disputed by the assessee. There is no infirmity in the order of the AO as far as the invoking of section 40A(3) where the same is read along with section 58 of the Act. Further, the assessee has contended that it has made cash payment under exceptional and unavoidable circumstances as the payment has been made on account of expenses for breakfast, lunch dinner paid to the various restaurant, halwai etc. at places outside the regular place of operations of the assessee and at these places, they do not accept the cheque payment being unknown to the assessee. Assessee has relied on the Coordinate Bench decision in case of M/s A Daga Royal Arts, Jaipur [2018 (6) TMI 1240 - ITAT JAIPUR] We find that the said contention of the assessee regarding exceptional and unavoidable circumstances under which it has made the payments in cash though raised before the lower authorities have not been examined. Therefore, it would be appropriate if the matter is set aside to the file of the ld. CIT(A) who shall consider the aforesaid contention - Decided in favour of assessee for statistical purposes.
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