Section 271D penalty cannot be imposed on amount disallowed under section 40A(3)

DCIT Vs VME Precast Pvt. Ltd. (ITAT Chennai)

ITAT noted that at the first instance, Revenue has added these amounts in violation of provisions of section 40A(3) of the Act i.e., not the entire amount of Rs.1,55,67,210/- but restricted the violation at Rs.79,05,835/-. However, subsequently the JCIT vide order dated 06.02.2015 levied penalty for an amount of Rs.1,05,40,500/- being payments made in cash first through the directors account and subsequently taken to the party account i.e., the assessee’s account. The JCIT also

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