2012 (1) TMI 289

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..... ee. He incurred the following payments towards transportation of granites. The assessee sought exemption of the said amount under Section 40A(3) of the Act. The transaction pertains to financial year 2004-05. Section 40a(3) of the I.T. Act for the relevant assessment year read as follows: (3) where the assessee incurs any expenditure in respect of which payment is made, after such date (not b .....

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..... of 80% of the payment made in excess of ₹ 20,000/- should be permissible for a deduction. In other cheque or demand draft would not be allowed for deduction 3. The relevant lines in the provisions, if read in conjunction it read thus: where is assessee incurs an expenditure in a sum exceeding ₹ 20,000/- otherwise than by cross cheque or by corss bank draft, 20% on such expendi .....

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..... to 80%. Only to an extent of 20% the deduction is not allowed as per purport of sub Section 3 of the Act, as it stood then for the assessment year. 7. The Assessing authority, the Commissioner of Income Tax and the Tribunal have taken a view that the assessee is not entitled to benefit of payment of initial ₹ 20,000/- and the disallowance of deduction should be on the total amount of expe .....

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