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| The Tax Publishers2019 TaxPub(DT) 8168 (Kol-Trib) INCOME TAX ACT, 1961
Section 40A(3)
Where payment for car hire charges was covered by the proviso to section 40A(3) being payment made for plying, hiring or leasing goods carriages and where the payment of such expenditure was made in cash not exceeding a sum of Rs. 35,000, the disallowance made under section 40A(3) in respect of the said expenditure, would not be sustainable.
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Business disallowance under section 40A(3) - Cash payments exceeding monetary limit - Payment on account of car hire charges - Applicability of proviso to section 40A(3)
Assessee-company made payment on account of car hire charges. Since the said payment was made in cash in violation of provisions of section 40A(3) and there were no exceptional circumstances explained by the assessee for making such payment in cash as specified in rule 6DD, AO disallowed the said expenditure. Held: Since payment for car hire charges was covered by the proviso to section 40A(3) being payment made for plying, hiring or leasing goods carriages and since the payment of such expenditure was made in cash not exceeding a sum of Rs. 35,000, the disallowance made under section 40A(3) in respect of the said expenditure, would not be sustainable.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
INCOME TAX ACT, 1961
Section 40A(3)
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