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| The Tax Publishers2020 TaxPub(DT) 3804 (Jp-Trib) INCOME TAX ACT, 1961
Section 263
Since individual payment to payees of festival expenses was not exceeding Rs. 1,000 per payee, there was no violation of section 40A(3) and that was why AO made no disallowance under section 40A(3) and, therefore, assessment order could not be regarded as erroneous and prejudicial on this count.
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Revision under section 263 - Erroneous and prejudicial order - Alleged non-invocation of section 40A(3) by AO -
Pr. CIT held assessment order as erroneous and prejudicial to the interest of revenue on the ground of AO not having disallowed festival expenses of Rs. 34,000 incurred in cash under section 40A(3). Held: Festival expenses of Rs. 34,000 was incurred on festival of Deepawali on account of payment to non-teaching staff and casual workers like, sweeper, postman, electrician from JVVNL, etc. The details of said payment with name and amount was forming part of voucher of payment and was duly examined by Tax Auditor as well as by AO during scrutiny assessment. Individual payment to said payees was not exceeding Rs. 1,000 per payee and hence, there was no violation of section 40A(3) and that was why AO made no disallowance under section 40A(3). Accordingly, assessment order could not be regarded as erroneous and prejudicial to the interest of Revenue.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2015-16
Income Tax Act, 1961
Section 263
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