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2023 (1) TMI 200 - ITAT BANGALOREDisallowance u/s. 40A (3) - assessee could not reduce any compelling reason for making cash payment - HELD THAT:- The proviso to section 40A(3) states that for the purpose of making disallowance under the said section should be done having regard to the considerations of business expediency and other relevant factors. The assessee in the affidavit claims that the suppliers insisted for payments in cash which is a reason enough for making the payments in cash. The facts stated in the affidavit needs to be verified to confirm whether making the payment in cash is done for business expediency as claimed by the assessee. AR submission that the in the case M/s. Spectra Pipes Private Limited, the cash is directly deposited in the bank account of the supplier also needs to be verified on merits. Considering that the assessee’s claims stated above needs verification basis which the allowability of the expenses need to be decided, we are remitting the case back to the AO. The AO is directed to look at the facts afresh in the light of the affidavit filed by the assessee after giving reasonable opportunity of being heard to the assessee. Appeal of the assessee is allowed for statistical purposes.
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