TMI Blog2008 (7) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... h the matter in question. It appears that the Tribunal first dealt with the matter on account of applicability of Section 40A(3) of the Income Tax Act and the appeal was against the deletion made by the CIT (Appeals) for such disallowance made under the said Section. Assessee's submission was rejected on the ground that Section 153A provides for computation of total income after applying all o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or bank drafts. We find that the ITAT, Kolkata Bench has considered the disallowance u/s 40A(3) in block assessment in the case of Smt. Gita Rani Mondal vide IT(SS) A.No.7(Kol) of 1997. The ITAT came to the conclusion that by very nature of unrecorded expenditure, the payment can not be made by account payee cheque/bank draft. They also held that the disallowance u/s 40A(3) does not fall within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment can never look into the provisions of section 40A(3) read with rule 6DDJ of the Income Tax Rules, 1962. No disallowance could be made as no deduction is allowed to and claimed by the assessee in respect of purchases. When Gross Profit rate is applied, everything is taken case of and the Department can never make an enquiry/scrutiny of the amount on the purchases by the assessee. Several ..... X X X X Extracts X X X X X X X X Extracts X X X X
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