Case Law Details
Kalyan Lok Nirman (P) Ltd. Vs DCIT (ITAT Indore)
The issue under consideration is whether the disallowance u/s 40A(3) of the Act for the alleged payment in cash in excess of the limit prescribed u/s 40A(3) of the Act for making payment for purchase of land is justified in law?
ITAT states that, in the instant appeal also the assessee purchased the land at Gram Bada Baghda, Tehsil, Indore for total consideration of Rs.17,04,240/- and except for the amount of Rs.4,26,060/- paid in cash, the balance amount was paid through account payee cheque. The details of payment through cheque and cash were provided in the sale deed placed before the registering authority along with the identity of the payers and sellers and the same was duly registered. Genuineness of the transaction as well as the concerned parties is not under dispute. But since the land purchased by the assessee forms part of stock and trade the provisions of Section 40A(3) of the Act comes into operation. During the course of hearing when the question was asked to the Ld. Counsel for the assessee that what would be situation if the assessee will claim the cost of land as expenditure in subsequent years then will it not violate the provisions of Section 40A(3) of the Act in the year of claim. In reply Ld. Counsel for the assessee in his capacity as Officer of the court stated that the assessee will give an undertaking to the effect that the impugned amount will not be claimed as expenditure in subsequent years against the revenue/gross turn over. Ld. Departmental Representative also did not oppose to the statement given by Ld. Counsel for the assessee. ITAT therefore, allow the sole ground raised by the assessee and delete the disallowance made u/s 40A(3) of the Act.
FULL TEXT OF THE ITAT JUDGEMENT
The above captioned two appeals are filed at the instance of the assessee. Appeals No. 658 & 659/Ind/2017 for Assessment Years 2012-13 & 2013-14 are directed against the order of Ld. CIT(Appeals)-III (in short ‘CIT(A)’), Indore dated 27.07.2017 which are arising out of the order u/s 143(3) of the Income Tax Act 1961 (In short the ‘Act’) dated 30.12.2013 and 22.02.2016 framed by DCIT (Central) & DCIT (Central)-2, Indore respectively.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
