Income Tax : Section 40A of the Income-tax Act restricts the deduction of specified business expenses where statutory conditions are not fulfil...
Income Tax : The Income-tax Act contains strict provisions under Sections 40A(3), 269SS, 269ST, 269SU, and 269T to regulate cash transactions, ...
Income Tax : Learn if cash payments over ₹10,000 for electricity bills are allowed under Section 40A(3) of Income Tax Act. Understand exempti...
Income Tax : Section 40A(3) restricts cash payments exceeding ₹10,000 in business transactions. Exceptions apply for specific cases like tran...
Income Tax : Explore the rules and regulations governing cash transactions in real estate deals to ensure tax compliance. Learn about permissib...
Income 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/...
Income Tax : The Hyderabad ITAT held that incomplete data retrieved from an inoperative computer could not prevail over audited books of accoun...
Income Tax : The Tribunal deleted the disallowance after finding no evidence that cash rent payments exceeded ₹10,000 on any single day. The ...
Income Tax : Additions made by attributing the commission income earned by PSPL as undisclosed income of the Assessees were held unsustainable ...
Income Tax : The ITAT Kolkata held that cash payments made through agents for procuring paddy from farmers were covered by Rule 6DD exceptions....
Income Tax : The Bangalore ITAT held that a Section 40A(3) disallowance cannot be made on the assumption that cash payments might have exceeded...
The Hyderabad ITAT held that incomplete data retrieved from an inoperative computer could not prevail over audited books of account. It deleted the addition after finding no evidence of suppressed receipts or unexplained expenditure.
The Tribunal deleted the disallowance after finding no evidence that cash rent payments exceeded ₹10,000 on any single day. The ruling underscores that Section 40A(3) cannot be invoked without establishing an actual breach of the prescribed limit.
Additions made by attributing the commission income earned by PSPL as undisclosed income of the Assessees were held unsustainable in law and were directed to be deleted across all relevant assessment years as Revenue had failed to establish inflation of purchase prices; accrual of PSPL’s commission income to assessees; any flow back of funds to the Assessees; or that PSPL was a sham or fictitious entity.
Section 40A of the Income-tax Act restricts the deduction of specified business expenses where statutory conditions are not fulfilled, including excessive payments to related parties and cash payments exceeding prescribed thresholds. The provisions also disallow certain gratuity provisions, contributions to non-statutory employee funds, and notional losses on specified securities.
The Income-tax Act contains strict provisions under Sections 40A(3), 269SS, 269ST, 269SU, and 269T to regulate cash transactions, restrict cash-based loans and receipts, and promote digital payments.
The ITAT Kolkata held that cash payments made through agents for procuring paddy from farmers were covered by Rule 6DD exceptions. Consequently, the disallowance under Section 40A(3) was deleted.
The Bangalore ITAT held that a Section 40A(3) disallowance cannot be made on the assumption that cash payments might have exceeded statutory limits. The Tribunal deleted the addition after finding that records showed payments were made through banking channels.
ITAT Delhi held that the PCIT exceeded jurisdiction by introducing issues not mentioned in the Section 263 show-cause notice. The revision order was quashed for travelling beyond the scope of the proceedings.
ITAT Delhi upheld deletion of disallowance under Section 40A(3) after finding that payments were made to multiple labourers and no individual payment exceeded statutory limit. Tribunal accepted that bulk transfers were only administrative in nature.
The Tribunal held that no disallowance under section 36(1)(iii) can be made where loans are advanced from interest-free funds. It observed that availability of own funds and recovery during the year supported the assessee’s claim.
