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2022 (3) TMI 1126 - AT - Income TaxAddition u/s 40A(3) - cash purchases of petrol - HELD THAT:- It is an admitted fact that the Assessee had made a payment of ₹ 76,50,000/- in cash against the purchase of petrol through two different dealers. The learned CIT(A) has discussed that there was no extraordinary circumstances that forced the Assessee to make payment in cash. He also discussed that the case-law relied upon by the Assessee was not relevant to the facts of this case. The learned CIT(A) also mentioned that these two dealers were regular vendors of the Assessee and that the Assessee was having a running account with each one of them. The learned CIT(A) has further observed that the Assessee was in the habit of purchasing petrol regularly and was subsequently making lumpsum payments in cash periodically and accordingly the transactions were entered in the account books. Assessee has not produced any documentary evidences to substantiate that these payments were required to be made in order of the business expediency or emergencies or that of an exceptional circumstance as provided in Rule 6DD of the Income Tax Rules, 1962 is rebuttal to the findings of the learned CIT(A) towards the disputed purchases being added to the income of the Assessee by invoking the provision of Section 40A(3) We do not find any merit in the submissions of the learned Counsel for the Assessee on the issue of addition made u/s. 40A(3) of the Act, on account of the cash purchases by the Assessee. Accordingly, the order of the CIT(A) on this issue is confirmed. Addition on account of business promotion - HELD THAT:- CIT(A) has categorically held that this expenditure was disallowed for the reason that no documentary evidences was submitted during the appeal proceedings, before him - AR has failed to submit any documentary evidences before us, except stating that the same has been incurred as cheque and through credit card. Since, the Authorized Representative has failed to explain the reason for incurring the disputed business promotion expenses and also the nature of the disputed business promotion activity, we hold that the learned CIT(A) was justified in confirming the said addition claimed to be incurred towards business promotion expenses, so claimed.This ground of appeal pertaining to the addition incurred towards business promotion expenses is rejected accordingly. Appeal of the Assessee is dismissed.
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