Case Law Details
Ashwin Barai Vs ITO (ITAT Chennai)
We find that there is no dispute with regard to applicability of section 40A(3) of the Act, when cash payments made for any expenses in excess of prescribed limit, however, in each and every case provisions of section 40A(3) cannot be applied, because, real nature of transactions need to be ascertained. In case, the assessee acts as commission agent and earns commission on total sales, then even if, for practical purposes, transactions are treated as purchase & sales, then for the purpose of provisions of section 40A(3) of the Act, real nature of transaction needs to be ascertained. In this case, the assessee claims that though he has reported purchases as his own purchases, but said purchases is made on behalf of principal, and his income is only commission on net sales. In this regard, the assessee has placed agreement between the M/s. B & M Hot Breads Pvt.Ltd. and the assessee. These fact needs to be verified by the Assessing Officer to decide applicability of provisions of section 40A(3) of the Act. Hence, we set aside the issue to the file of the Assessing Officer and direct the Assessing Officer to reconsider the issue in light of averments of the assessee and also agreement between the parties and decide applicability of provisions of section 40A(3) of the Income Tax Act, 1961.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by assessee is directed against order of learned Commissioner of Income Tax (Appeals), Puducherry, dated 31.08.2018 and pertains to assessment year 2015-16.
2. The assessee has raised following grounds of appeal:-
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