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...
CA, CS, CMA : जानें जीएसटी और आयकर एक्ट में नकद संव्यवहार के नि...
Income Tax : Dive into critical tax regulations and provisions, from related party payments to cash disallowance, and learn how they impact you...
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 : Assessee had given cash to her employee who was the supervisor or the agent who in turn made payment to the sellers of the gold an...
Income Tax : ITAT Ahmedabad held that once the unaccounted receipts from the sale of properties are subjected to taxation as part of the capita...
Income Tax : ITAT Chennai held that provisions of section 69A of the Income Tax Act could not be invoked when cash is sourced out of recorded s...
Income Tax : A search and seizure action u/s.132 of the Act was conducted in the assessee's case on 14.11.2019. AO observed that during the cou...
Income Tax : ITAT Chennai held that when the cash is sourced out of recorded sales, the provisions of section 69A of the Income Tax Act could n...
Kamta Prasad Mittal Vs Dy. CIT (ITAT Lucknow) It is an undisputed fact that a Demand Note was issued by BSNL requiring the assessee to make payments in cash and genuinity of the payments to BSNL was never doubted by the With regard to the observation of the ld. CIT(A) that BSNL is not a […]
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.
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 […]
Kalyan Constructions Vs ITO (ITAT Hyderabad) Provisions of Section 40A(3) mention that where an assessee incurs any expenditure in respect of which payments were made to a person otherwise than by way of crossed cheque or account payee cheque, no deduction shall be allowed in respect of such expenditure. It is humbly submitted that when the […]
Question of disallowance under section 40A(3) would not arise, where assessee had not claimed the payments as expenditure, while computing its business income.
These two appeals, filed by the assessee, being ITA No. 2135/Mum/2013 & I.T.A. No. 4896/Mum/2015 for assessment year 2009- 10 and 2008-09 respectively are directed against two separate appellate orders dated 22.01.2013 and 25-02-2015 respectively passed by learned Commissioner of Income Tax (Appeals)-33
In the facts and circumstances of the case and in law, the ld. CIT(A) has grossly erred in confirming the action of ld. AO in disallowing the claim o f expenditure of Rs. 1,71,67,000/- by applying section 40A(3) of Income Tax Act, 1961. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please may be granted by deleting the entire addition Rs. 1,71,67,000/- imposed under section 40A(3)
The facts of the case are that the assessee filed return of income declaring income at Rs.22,52,471/-. The assessee is an individual and engaged in the business of trading/ Distribution of ITC Products under the name and style of M/s. DK Enterprises. On verification of the P & L A/c, audited report and books of account of the assessee, it was noticed that assessee had made huge payments to M/s. Hanuman Traders in cash.
The Government of India with an intention to evade black money and to discourage the cash transactions time and again taking various steps. Specially the Income tax Act is amended and provided with disallowances and stringent penal provisions for various types of cash transactions. Let us briefly understand some of such provisions here.
The provisions of section 40A(3) are not intended to restrict the business activities but to caution that payments exceeding Rs.20,000/- are made in cheque/draft. The provisions of section 40A(3) of the Act are to be in consonance with business expediency trade practice and other genuine relevant factors
