Section 40A(3) disallowance invalid as payments to single person per bill not exceeds Rs. 20,000

Harishkumar Mathuradas Barai V.M. Barai & Co Vs ITO (ITAT Rajkot) The Income Tax Appellate Tribunal (ITAT) in Rajkot has deleted an addition of ₹6,00,000 made by the tax authorities against Harishkumar Mathuradas Barai under Section 40A(3) of the Income Tax Act. The disallowance was made on the grounds that the assessee had made cash payments exceeding the statutory limit of ₹20,000 to a single party, V.M. Barai & Co., for the assessment year 2015-16. The ITAT’s decision was based on a prior ruling by a co-ordinate bench in a group case, Parsottam Madhavji Bhanusali v. ITO, w...