No section 40A(3) disallowance if test of genuineness of transactions satisfied

K.K. Construction Co. Vs. ACIT (ITAT Jaipur)

Conclusion: Dis allowance under section 40A(3) could not be made as identity of persons from whom purchases had been made was established; source of cash payments was clearly identifiable in form of withdrawals from assessee’s bank accounts and the said details were submitted before AO, thus, the genuineness of the transaction had been established as purchase of construction material for road construction and the test of business expediency had been met.

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