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| The Tax Publishers2020 TaxPub(DT) 1857 (Ctk-Trib) : (2021) 186 ITD 0483 : (2020) 079 ITR (Trib) 0010 INCOME TAX ACT, 1961
Section 40A(3)
Where impugned cash payments beyond prescribed limit for purchase of gold on various dates were made towards purchase of gold ornaments to parties who belonged to Cuttack, where banking facilities were available, then AO was justified in making disallowance under section 40A(3).
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Business disallowance under section 40A(3) - Cash payment in excess of prescribed limit - Banking facilities duly available and no business exigency -
Assessee derived income from retail sale of gold and silver and transport contract. AO noticed that assessee made cash payments beyond prescribed limit for purchase of gold on various dates. Accordingly, AO invoked section 40A(3) and made disallowance.Held: Impugned cash payments were made towards purchase of gold ornaments, parties were belonged to Cuttack where banking facilities were available. Further on perusal of details of payments made it was clear that assessee had made payment in cash on different dates. Accordingly, business exigency remained unproved. Therefore, AO was justified in making disallowance under section 40A(3).
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2012-13
INCOME TAX ACT, 1961
Section 37(1)
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