Addition u/s 40A (3) - expenses incurred by the assessee for the ...

High Court Deletes Additions u/s 40A(3) for Cash Purchases of Raw Hides After Supporting Evidence Validates Transactions.

January 27, 2022

Case Laws     Income Tax     HC

Addition u/s 40A (3) - expenses incurred by the assessee for the purchase of raw hides and skins in cash - Notices to sellers sent u/s 133(6) of the Act have returned with postal endorsement ‘not known’. - the tribunal has noted the fact and also taken a note of the contemporaneous documents produced by the assessee, namely, the sales tax bills, transport permits and other Government records to prove the genuineness of the transaction. Apart from that, the day-to-day stock register were also maintained which is noted in the tax audit report. Furthermore, the payments were made to the suppliers of the hides and skins and considering the nature of the trade, the [CIT(A)] and the tribunal agreed with stand taken by the assessee. - Addtions were rightly deleted - HC

View Source