2010 (11) TMI 797

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..... red by the Revenue the question raised is whether the Tribunal was justified in law in confirming the order of CIT(A) deleting the additions made by the AO under s. 40A{3) of the IT Act.   3. It is not in dispute that the assessee was a contractor and collecting the royalty and payment had been made to the contractor who had collected the royalty on behalf of the State. The AO disallowed 20 .....

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..... a huge amount of royalty was paid by way of cash, whereas it was necessary to pay it by cheque. Thus, the AO had rightly disallowed 20 per cent of the amount.   6. After hearing counsel appearing on behalf of the Revenue, we are of the opinion that the amount was paid to the contractor which was collected on behalf of the State Government as such no disallowance could have been made in view .....

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