Existence of business exigency needs to be proved for payments in cash to avoid addition u/s 40A(3)

Muniraju Kempanna Vs ACIT (ITAT Bangalore)

ITAT Bangalore remanded the matter back to AO for fresh consideration as assessee didn’t proved existence of business exigency in making payment in cash and AO didn’t carried necessary enquiry before making addition u/s 40A(3) of the Income Tax Act.

Facts- In the present case, it is alleged that the assessee has made payment of various expenditure exceeding Rs.20,000/- in cash while purchasing the land. According to the A.O.,

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