Section 40A(3)

Discouragement of Cash Transactions under Various Laws in India

Income Tax - In order to curb cash transactions and to move into the digital world, Government of India has introduced Demonetization of old notes of Rs. 500 & Rs. 1000 from 8th November 2016 in order to control the parallel world of black market. Further, Government has also initiated various steps through various laws in India including [&hellip...

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Cash transaction and its Income Tax implications

Income Tax - According to section 40A(3) of the Income Tax Act, if payment for any expenditure exceeding Rs.10,000 is made in cash in a day, then the expenditure will be disallowed under the Income Tax Act. ...

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Income Tax Provisions relating to Cash Transactions in India

Income Tax - India has been categorized as a cash based economy since long. People are more comfortable in using cash as no prior authorization is required, no transaction charges are there, no technical knowledge is required, cash cab be used anonymously and also tax evasion become easier. In Past decade Govt. has taken various steps and has [&hellip...

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Analysis of Cash Payments under section 40A(3) and 43(1)

Income Tax - Implication of Cash Cash payments exceeding Rs.10,000 under the provisions of Section 40A(3) & Section 43(1) of Income Tax Act, 1961.  This article mainly focuses on the concepts of, i) Cash payments made for revenue expenditures, which are covered within the provisions of Sec. 40A(3) and ii) Cash Payments that are made for acquisiti...

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Cash Transactions in Agriculture Sector- Income Tax Provisions

Income Tax - In India, a large population is engaged in the agriculture sector and there are numerous transactions regarding sale and purchase of agriculture produce. The farmers sell their agriculture produce to Pacca Arahtia i.e. traders through kuchha Arahtias. Kuchha Arahtias are commission agents and are only fascilators of auctions/sales of agri...

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SIT report: Restrict Cash Transaction/Holding to curb black money

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/– (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...

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Provisions of section 40A(3) doesn’t apply to payment made to a cottage industry

DCIT Vs Smt. A. Gandhimathi (ITAT Chennai) - ITAT Chennai held that payment towards purchase of wet grinders and accessories were mainly made to a cottage industry and accordingly such payment is not hit by the provisions of section 40A(3) as payment made to a cottage industry is excluded under rule 6DD(F) of the Income Tax Rules....

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Cash payment for Purchase at remote locate & desert of Rajasthan allowable- Section 40A(3)

Mana Ram Ganpat Ram & Co. Vs ITO (ITAT Delhi) - Grit has been purchased by assessee from petty persons who are illiterate and who make their living by breaking stones by hand tools and they do not possess PAN Cards has not been proved to be false or untrue....

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Provisions of section 40A(3) not apply in absence of actual cash transaction

Radheyshyam Gupta Vs PCIT-9 (ITAT Kolkata) - ITAT Kolkata held that the transaction of purchase of old gold jewellery in exchange of sale of new jewellery is covered under rule 6DD (d) and hence exempted from the provisions of section 40A(3) of the Income Tax Act. Further, there is no violation of provisions of section 40A(3) as there is no ac...

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No section 40A(3) disallowance for Cash payment as part of sale consideration which is incorporated in purchase deed

Shivaji Bhimaji Gaikwad Vs ITO (ITAT Pune) - Shivaji Bhimaji Gaikwad Vs ITO (ITAT Pune) No section 40A(3) disallowance for Cash payment for land as part of sale consideration which is incorporated in purchase deed Brief facts relating to the issue on hand are that the assessee is an individual and derives income from land deals and constructio...

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No section 40A(3) addition for Cash Payments to Agriculturists for crop

Bappanalli Brothers Vs ACIT (ITAT Banglore) - Bappanalli Brothers Vs ACIT (ITAT Banglore) CIT(A) concluded that the payments were not made directly to the cultivator and therefore the Assessee has not proved existence of circumstances set out in Rule 6DD(e) of the rules. ITAT held that The reasons given by the CIT(A) for treating the payment in...

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Section 40A(3)’s Popular Posts

Recent Posts in "Section 40A(3)"

Provisions of section 40A(3) doesn’t apply to payment made to a cottage industry

DCIT Vs Smt. A. Gandhimathi (ITAT Chennai)

ITAT Chennai held that payment towards purchase of wet grinders and accessories were mainly made to a cottage industry and accordingly such payment is not hit by the provisions of section 40A(3) as payment made to a cottage industry is excluded under rule 6DD(F) of the Income Tax Rules....

Read More

Cash payment for Purchase at remote locate & desert of Rajasthan allowable- Section 40A(3)

Mana Ram Ganpat Ram & Co. Vs ITO (ITAT Delhi)

Grit has been purchased by assessee from petty persons who are illiterate and who make their living by breaking stones by hand tools and they do not possess PAN Cards has not been proved to be false or untrue....

Read More

Provisions of section 40A(3) not apply in absence of actual cash transaction

Radheyshyam Gupta Vs PCIT-9 (ITAT Kolkata)

ITAT Kolkata held that the transaction of purchase of old gold jewellery in exchange of sale of new jewellery is covered under rule 6DD (d) and hence exempted from the provisions of section 40A(3) of the Income Tax Act. Further, there is no violation of provisions of section 40A(3) as there is no actual transaction of payment of cash....

Read More

No section 40A(3) disallowance for Cash payment as part of sale consideration which is incorporated in purchase deed

Shivaji Bhimaji Gaikwad Vs ITO (ITAT Pune)

Shivaji Bhimaji Gaikwad Vs ITO (ITAT Pune) No section 40A(3) disallowance for Cash payment for land as part of sale consideration which is incorporated in purchase deed Brief facts relating to the issue on hand are that the assessee is an individual and derives income from land deals and construction. The assessee filed return of [&hellip...

Read More

Discouragement of Cash Transactions under Various Laws in India

In order to curb cash transactions and to move into the digital world, Government of India has introduced Demonetization of old notes of Rs. 500 & Rs. 1000 from 8th November 2016 in order to control the parallel world of black market. Further, Government has also initiated various steps through various laws in India including [&hellip...

Read More
Posted Under: Income Tax | ,

No section 40A(3) addition for Cash Payments to Agriculturists for crop

Bappanalli Brothers Vs ACIT (ITAT Banglore)

Bappanalli Brothers Vs ACIT (ITAT Banglore) CIT(A) concluded that the payments were not made directly to the cultivator and therefore the Assessee has not proved existence of circumstances set out in Rule 6DD(e) of the rules. ITAT held that The reasons given by the CIT(A) for treating the payment in question not to the Agriculturists [&he...

Read More

Cash transaction and its Income Tax implications

According to section 40A(3) of the Income Tax Act, if payment for any expenditure exceeding Rs.10,000 is made in cash in a day, then the expenditure will be disallowed under the Income Tax Act. ...

Read More
Posted Under: Income Tax |

No section 40A(3) Disallowance for cash payment to Agricultural Land Seller on his insistence

Geo Connect Ltd Vs DCIT (ITAT Delhi)

Geo Connect Ltd Vs DCIT (ITAT Delhi) The factual matrix reveal that the assessee is in real estate business and for that purpose it purchased an agricultural land from one Sh. Ugma, an old man of 75 years. Towards sale consideration of the said land, the assessee issued bearer cheques for an amount of Rs. […]...

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Section 40A(3) disallowance sustainable for Cash Purchase Exceeding Prescribed Limit

Ashwin Barai Vs ITO (ITAT Chennai)

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 […]...

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Income Tax Provisions relating to Cash Transactions in India

India has been categorized as a cash based economy since long. People are more comfortable in using cash as no prior authorization is required, no transaction charges are there, no technical knowledge is required, cash cab be used anonymously and also tax evasion become easier. In Past decade Govt. has taken various steps and has [&hellip...

Read More
Posted Under: Income Tax |

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