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2021 (4) TMI 845 - AT - Income TaxDisallowance u/s. 40A(3) - payments through cash payment or bearer cheque to the payer - payment withdrawal made by the staff of the assessee - The assessee’s contention is that when payments were made on next day, there was holidays of continuous four days and those payments were made for the business expediencies and assessee was compel to make cash payment under peculiar circumstances as principal company to which assessee was a distributor, and recipient of the cash payment insisted assessee to make payment in cash as realization takes a longer time. And payments were effected for outstanding amount as requested keeping in mind next four coming holidays being Thursday Rath Yatra, Friday, Saturday and Sunday the clearing was not available as per the ledger account submitted by the assessee. HELD THAT:- in our considered opinion, no disallowance can be made u/s. 40A(3) and benefit of rule 6DD(j) will be given to the assessee therein it is contemplated that if payment of Rs. More than ₹ 20,000/- paid in cash “where the payment was required to be made on a day on which banks were closed on account of holiday or strike.” It is pertinent to note here that assessee took this plea which was not accepted by the lower authorities so to our mind same is amounting to miscarriage of justice. Appeal filed by the Assessee is allowed.
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