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2021 (4) TMI 859 - AT - Income TaxDisallowance of expenditure debited under the head 'pond and farm maintenance' u/s. 40A(3) - addition u/s 40(a)(ia) for non-deduction of tax at source on JCB baffling charges - HELD THAT:- Although, the assessee claimed before the AO that said payments have been made to farmers, but the AO has negated arguments of the assessee in light of evidences filed during the course of assessment proceedings that impugned payments have been made to labours for cleaning of pond, for JCB baffling charges, for purchase of sand, bricks, jally, purchase of salt. No evidence has been placed on record to prove that payments have been made to cultivator, grower or producer as per Rule 6DD(e) in order to exclude said payments from the provision of section 40A(3). As per Rule 6DD(e), in order to exclude cash payment from the purview of section 40A(3) of the Act, said payment should be made for purchase of agriculture or forest produce or produce of animal husbandry or dairy or poultry farming or fish or fish products or the produce of horticulture or apiculture. But, as per the ledger account copy furnished by the assessee, all payments have been made to labours for cleaning of pond and JCB baffling charges. Therefore, we are of the considered view that expenditure debited under the head 'pond and farm maintenance expenses' cannot come under the exclusion provided under Rule 6DD(e) of IT Rules, 1962. Therefore, we are of the considered view that there is no error in the findings recorded by the AO and affirmed by the ld. CIT(A) to make disallowance of expenses u/s. 40A(3)/40(a)(ia) of the Act. Hence, we are inclined to uphold the findings of the CIT(A) and dismiss the appeal filed by the assessee.
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