Section 40A(3) Addition Quashed as Department Failed to Prove Single-Day Violation

Maya Devi Suhalka Vs ITO (ITAT Jodhpur) The appeal before the ITAT Jodhpur arose from the order of the National Faceless Appeal Centre dated 30.10.2025 for AY 2020-21, wherein the addition of ₹2,40,000 under Section 40A(3) of the Income Tax Act was confirmed on account of alleged cash payment of rent. The assessee, an individual engaged in the retail sale of IMFL and beer, had obtained a liquor licence from the Rajasthan State Excise Department for FY 2019-20. The rented premises used for the business were taken on monthly rent of ₹10,000. The assessee furnished the rent ledger showing tha...