Case Law Details
Harshdeep Singh Juneja Vs DCIT (ITAT Raipur)
ITAT Raipur held that payment towards purchase of beer from the State Government is an exception to the applicability of section 40A(3). However, brushing aside the said objection/ response filed by the assessee had rendered entire mechanism provided u/s 143(1)(a) as redundant and otiose.
Facts- Income of the assessee was processed by the CPC, Bengaluru u/s.143(1) of the Act dated 26.08.2019, wherein after making a disallowance of Rs.57,62,920/- u/s.40A(3) of the Act its income was determined at Rs.64,85,460/-.
Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without success. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us.
Conclusion- Ostensibly, the assessee in his objection dated 24.01.2019 to the proposed adjustment that was sought to be made by the CPC, Bengaluru u/s.40A(3) of the Act, had clearly stated that the expenditure in question was incurred towards purchase of beer from the State Government which would not accept payment in any mode other than cash. To sum up, the assessee in his reply, had clearly demonstrated before the CPC, Bengaluru that the expenditure in question did fall within the realm of the exception carved out under Rule 6DD(b) of the Income Tax Rules, 1962.
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