Disallowance of cash purchase of jewellery u/s 40A(3) justified in case assessee failed to give explanation

Natesan Krishnamurthy Vs ITO (Madras High Court) Conclusion: Since assessee failed to demonstrate that the conditions of the bid for purchase of gold jewellery required assessee to effect payments in cash and there was no explanation as to what stopped assessee from effecting payments through banking channel, therefore, AO was justified in disallowing the cash purchase of jewellery under section 40A(3). Held: Assessee had purchased gold jewellery worth Rs.34.68 Crores by way of cash in the auction conducted by M/s.M Finance Ltd. AO referred to Section 40A(3) stated that assessee had made cash ...