| |
| The Tax Publishers2020 TaxPub(DT) 1665 (Agra-Trib) : (2020) 181 ITD 0507 INCOME TAX ACT, 1961
Section 40A(3) Rule 6DD
Since assessee was obliged to do cash payments as per business practice and certain cash payments were made by the assessee after banking hours at a village, where there were no banking facilities, the assessee's case would fall under the exceptional circumstances as enumerated in rule 6DD and hence, the disallowance made under section 40A(3) read with rule 6DD was liable to be deleted.
|
Business disallowance under section 40A(3) - Cash payment exceeding prescribed limit - Exceptional circumstances -
Assessee firm was engaged in business of running a brick kiln. AO made disallowance under section 40A(3) read with rule 6DD, holding that cash payments were made by the assessee to truck drivers and agents of coal suppliers who supplied coal through trucks at the brick kilns. Held: It was noticed that since the truck drivers and the coal agents deliver the coal at night because of heavy vehicles could not ply during the daytime and insistence for cash payments, hence the assessee was obliged to do the cash payments as per business practice in that area where lots of brick kilns were there. Further, the Revenue neither found any fault with the payment nor disbelieve the payment made for the coal suppliers who were duly registered with the VAT department. Further, it was found that some cash payments were made after the banking hours and that too at village, where there were no banking facilities. Accordingly, the assessee's case would fall under the exceptional circumstances as enumerated in rule 6DD. Hence, the disallowance made under section 40A(3) read with rule 6DD was deleted.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
 SUBSCRIBE FOR FULL CONTENT
|