Addition for Violation of section 40A(3) sustained because of non-satisfying reply

Rajesh Kumar Vs ITO (ITAT Delhi) ITAT Delhi held that violation of section 40A(3) sustained as the reply provided by the assessee is hypothetical and non-satisfying. Facts- It was found by Ld. AO that during the financial year in respect of purchases, aggregate payments of Rs. 2,77,13,513/- was made otherwise than by an account payee cheque. Thus, considering it to be violation of Section 40A(3) of the Income Tax Act, 1961 r.w.s 40A(3A) of the Act show cause notice was issued for which the assessee had replied that the bearer cheques were issued to the supplier parties on demand as assessee wa...