2025 (4) TMI 617 - SCH - Income Tax

SC upholds Section 40A(3) cash transaction rules, rejects petition lacking proof of syndicate representation

NATESAN KRISHNAMURTHY Versus THE INCOME TAX OFFICER

The SC dismissed the Special Leave Petition challenging the HC's decision adding cash transactions under Section 40A(3). The assessee failed to prove ... Addition of cash transactions u/s 40A(3) - assessee had purchased gold jewellery worth ₹ 34.68 Crores by way of cash in the auction - as decided by HC [2019 (1) TMI 607 - MADRAS HIGH COURT] Assessee could not demonstrate that he was representing any syndicate nor he could demonstrate that he was collecting cash from such syndicate members for making payments to the Finance Company. The Tribunal correctly held that the assessee was unable to demonstrate a situation which compelled him to make payment in cash which would have exempted him from application of recourse of Section 40A(3) of the Act. HELD THAT:- Having heard the petitioner and having gone through the materials on record, we see no reason to interfere with the impugned order passed by the High Court. The Special Leave Petition is, accordingly, dismissed. This Order records that the Court, after hearing counsel and perusal of records, 'Delay condoned.' The Court determined there was 'no reason to interfere with the impugned order passed by the High Court' and therefore that the 'Special Leave Petition is, accordingly, dismissed.' All pending applications stand disposed of. The dispositive reasoning is summary: on the materials before it, the Court found the High Court's order unimpeachable and declined to exercise its discretionary jurisdiction to grant special leave. Procedural relief was limited to condonation of delay; no substantive alteration of the High Court's decision was made. The Order is final in respect of the petition and any associated applications.