TMI Blog2019 (4) TMI 2130X X X X Extracts X X X X X X X X Extracts X X X X ..... was made by assessee for business expediency in order to confirm the purchase deal. Therefore looking to the given facts and circumstances of the case the alleged cash payment of Rs. 5,40,000/- comes under the exceptions provided in Rule 6DD of the IT Rules and thus both the lower authorities were not justified in sustaining the disallowance u/s 40A(3) of the Act and the same deserves to be deleted. We accordingly order so and allow Ground No. 1 2 raised by the assessee. - Hon'ble Kul Bharat, Judicial Member And Hon'ble Manish Borad, Accountant Member For the Revenue : Shri R.S. Ambedkar, Sr. DR. For the Assessee : Shri M.K. Sharma, CA. ORDER PER MANISH BORAD, AM. The above captioned appeal is fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-return of income filed on 07.10.2010. Case was picked up for scrutiny followed by serving of notices u/s 143(2) and 142(1) of the Act. During the course of assessment proceedings Ld. A.O came to know that the assessee paid a cash sum of Rs. 5,40,000/- to Smt. Anar Bai for purchase of land at Khajuri Khurd. Ld. A.O took a view that as the assessee is in the business of purchase and sale of land and civil construction business and the alleged payment of cash of Rs. 5,40,000/- is hit by the provisions of section 40A(3) of the Act, the alleged amount needs to be disallowed as the assessee could not mention any circumstances specified in Rule 6DD of the I.T. rule justifying such cash payments. Income assessed at Rs. 85,05,390/-. Aggrieved asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is in appeal before the Tribunal. 6. Ld. Counsel for the assessee firstly pleaded that the seller of the property refused to accept the cheque given in advance as she was not having any bank account. Subsequently she opened the bank account and remaining payment for purchase construction was received by her through account payee cheque. Genuineness of the transaction is not disputed. Secondly he pleaded that the amount paid at Rs. 5,40,000/- has not been claimed as expenditure for the year under consideration as the land purchased remained as stock in hand and was carry forward to subsequent years. 7. Per contra Ld. Departmental Representative vehemently argued supporting the orders of lower authorities. 8. We have heard riv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities. The said cash payment was made by assessee for business expediency in order to confirm the purchase deal. 10. Therefore looking to the given facts and circumstances of the case the alleged cash payment of Rs. 5,40,000/- comes under the exceptions provided in Rule 6DD of the IT Rules and thus both the lower authorities were not justified in sustaining the disallowance u/s 40A(3) of the Act and the same deserves to be deleted. We accordingly order so and allow Ground No. 1 2 raised by the assessee. 10. Apropos the second plea raised in Ground No. 3 of the assessee s appeal contending that the disallowance is not called for as the alleged amount was not claimed as an expenditure during the year becomes infructuous and merely a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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