Case Law Details
Nam Estates Pvt. Ltd Vs. ITO (Karnataka High Court)
Facts-
The assessee is a private limited company engaged in the business of real estate development. The Assessing Officer disallowed the business expenditure holding that the payment is hit by section 40A(3).
Assessee contended that provisions of section 40A(3) cannot be invoked when the identity of the parties and genuineness of the transaction were not questioned. Further, assessee argued that the transaction took place at the place where there was no banking facility.
On the other hand, revenue submitted that provisions of section 40A(3) cannot be made applicable only if the case of the assessee falls within the exceptions provided under rule 6DD of the Income Tax Rules.
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