| |
| The Tax Publishers2020 TaxPub(DT) 3955 (Mad-HC) : (2020) 428 ITR 0224 : (2020) 275 TAXMAN 0599 INCOME TAX ACT, 1961
Section 40A(3)
Where AO made addition under section 40A(3) for cash payments exceeding prescribed monetary limit for acquiring rights to screen movies in assessee's theatre, concept regarding business expediency or commercial expediency could hardly be canvassed by the assessees, as it was periodically adopting modes by effecting cash payments.
|
Business disallowance under section 40A(3) - Cash payments exceeding prescribed monetary limit - Consideration of commercial expediency, whether required when periodical cash were made by assessee -
Assessee was aggrieved by addition made under section 40A(3) on allegation of cash payments effected by the assessee for the purpose of acquiring rights to screen movies in their theatres as exceeding Rs. 20,000. Held: Correct test to be applied was to examine as to whether the expenses would fall under any one of the exceptional circumstances set out in rule 6DD of the Rules. Concept regarding business expediency or commercial expediency could hardly be canvassed by the assessees, as the assessee was periodically adopting modes by effecting cash payments. No question of law, much less substantial question of law arose for consideration in these appeals. Assessment years under consideration were 2014-15 and 2015-16, when said rule 6DD(j) stood deleted and therefore, revenue was right in contending that genuinity of the transaction was hardly a matter, which should weigh in minds of AO while examining as to the whether the assessees had violated section 40A(3).
REFERRED : M.G. Pictures (Madras) Limited v. Asstt. CIT (2015) 57 taxmann.com 66 (SC) : 2015 TaxPub(DT) 1459 (SC) S.A. Builders Ltd. v. CIT (2007) 288 ITR 1 (SC) : 2007 TaxPub(DT) 0833 (SC) Attar Singh Gurmukh Singh v. ITO (1991) 191 ITR 667 (SC) : 1991 TaxPub(DT) 1528 (SC) Mr. D.S. Madiahswamy v. The ITO Ward 1 (3) Salem (T.C.(A) No. 166 of 2011:, dated 22-1-2019) : 2019 TaxPub(DT) 3634 (Mad-HC) Shri. Natesan Krishnamurthy v. The ITO Non-Corporate Ward 9 (2) (2019) 103 taxmann.com 342 (Madras) : 2019 TaxPub(DT) 0776 (Mad-HC) CIT v. M/s. Vasantha Subramanian Hospitals Private Limited (2018) 98 taxmann.com 292 (Madras) : 2018 TaxPub(DT) 6468 (Mad-HC) N. Mohammed Ali v. The ITO (2016) 65 taxmann.com 189 (Madras) : 2016 TaxPub(DT) 0812 (Mad-HC) M/s. PK. Ramasamy Nadar & Bros. v. The ITO (2014) 41 taxmann.com 538 (Madras) : 2014 TaxPub(DT) 1503 (Mad-HC) Aggarwal Steel Traders v. CIT (2000) 109 Taxman 283 (Punj. & Har.) : 2001 TaxPub(DT) 0232 (P&H-HC) CIT v. Chrome Leather Co. (P) Ltd. (1999) 235 ITR 708 (Mad) : 1999 TaxPub(DT) 0125 (Mad-HC) Mudiam Oil Co. & Ors. v. ITO & Ors., Amdyala Linganna and Co. v. UOI & Ors. (1973) 92 ITR 519 (A.P.) : 1973 TaxPub(DT) 0051 (AP-HC) M/s. Lena Talkies, M/s. Vaduganathan Talkies v. The ITO [I.T.A. Nos. 3432 & 3433/CHNY/2018, I.T.A. Nos.3434/CHNY/2018, dt. 25-4-2019]
FAVOUR : In assessee's favour
A.Y. : 2014-15 & 2015-16
 SUBSCRIBE FOR FULL CONTENT
|