Section 40A(3) disallowance sustainable for Cash Purchase Exceeding Prescribed Limit

Ashwin Barai Vs ITO (ITAT Chennai) We find that there is no dispute with regard to applicability of section 40A(3) of the Act, when cash payments made for any expenses in excess of prescribed limit, however, in each and every case provisions of section 40A(3) cannot be applied, because, real nature of transactions need to be ascertained. In case, the assessee acts as commission agent and earns commission on total sales, then even if, for practical purposes, transactions are treated as purchase & sales, then for the purpose of provisions of section 40A(3) of the Act, real nature of transact...