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Income Tax - There are various provisions in the Act which prohibit cash transactions and allow/encourage payment or receipt only through account payee cheque, account payee draft or electronic clearing system through a bank account. Section 13A of the Act requires a political party to receive donation exceeding rupees two thousand only through an acc...
Read MoreIncome Tax - I would like to highlight on a very important topics CASH TRANSACTION in business as well as other contexts. CASH Payment is common practice in business. Either in small or large business, CASH is very important part of business. Hence it is very important to understand and take precaution while making the payment to someone […]...
Read MoreIncome Tax - Section 40A(3) was introduced by the Finance Act 1968 as a provision designed to counter evasion of tax through claims for expenditure shown to have been incurred in cash with a view to frustrating proper investigation by the Department as to the identity of the payee and the reasonableness of the payment....
Read MoreIncome Tax - Section 40A(3) and Section 40A(3A) deals with Disallowance of 100% of expenditure if payment is made by any mode other than account-payee cheque or draft in the year of expense or in the subsequent year / Years. Article explains provision of Section 40A(3) and Section 40A(3A) of Income Tax Act, 1961. Section 40A(3) of Income Tax [&hell...
Read MoreIncome Tax - Treatment of expenditures incurred by an assessee in excess of Rs. 20000/- (wef A.Y. 2018-19 Rs 10000/-) in cash or bearer cheque under section 40(A)(3) of the Income Tax Act, 1961...
Read MoreIncome Tax - It is suggested that there should be a positive provision under the I.T. Act that any transaction involving more than Rs.3,00,000/– (Rupees Three Lacs) shall be invalid & illegal and would be a punishable offence, if amount is not paid by account payee cheque or account payee bank draft or use of electronic clearing system through a ban...
Read MoreSurya Merchants Ltd. Vs DCIT (ITAT Delhi) - Cash payments in excess of Rs. 20,000 made on bank/public holidays towards purchase of construction materials in the activity of real estate development could not be subjected to disallowance under section 40A(3) in view of rule 6DD(J)....
Read MoreMs. STEAG Energy Services (I) Pvt. Ltd. Vs ACIT (ITAT Delhi) - Assessee was not entitled to claim gifts and presents given to the customers by way of cash as business expenditure as the same was against the provisions contained u/s 40A(3)...
Read MoreShri. Natesan Krishnamurthy Vs ITO (Madras High Court) - Since assessee failed to demonstrate that the conditions of the bid for purchase of gold jewellery required assessee to effect payments in cash and there was no explanation as to what stopped assessee from effecting payments through banking channel, therefore, AO was justified in disallowing the cas...
Read MorePr. CIT VS Jadau Jewellers & Manufactures (P) Ltd. (Rajasthan High Court) - When income of the assessee was computed by applying gross profit rate, there was no need to look into the provisions of section 40A(3), as applying the gross profit rate takes care of expenditure otherwise by way of cross cheque also. Following the same the action of Tribunal could not be held as u...
Read MoreDCIT Vs Allied Infra suppliers (ITAT Cuttack) - The provisions of section 68 cannot be applied to sundry creditors and the assessee cannot be applied to sundry creditors and the assessee cannot be asked to prove the 3 ingredients of cash credits in respect of sundry creditors....
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Surya Merchants Ltd. Vs DCIT (ITAT Delhi) -
Ms. STEAG Energy Services (I) Pvt. Ltd. Vs ACIT (ITAT Delhi) -
Shri. Natesan Krishnamurthy Vs ITO (Madras High Court) -
Pr. CIT VS Jadau Jewellers & Manufactures (P) Ltd. (Rajasthan High Court) -
DCIT Vs Allied Infra suppliers (ITAT Cuttack) -
DCIT Vs M/s. Brilliant Sare Reality Pvt. Ltd. (ITAT Indore) -
Prime Infra Developers (P) Ltd. Vs ITO (ITAT Delhi) -
M/s. Lion Mercantile P. Ltd. Vs ITO (ITAT Mumbai) -
Kalyan Constructions Vs ITO (ITAT Hyderabad) -
