Co-operative society's mandatory reserve and share capital fixed deposits with banks-interest treated as business income under 80P(2)(a)(iii) deductio...
Income tax reassessment reopening after four years on investigation tip, without s.147 proviso disclosure failure, struck down as borrowed satisfactio...
ITAT allowed the appeal of the assessee-company (A Co.), engaged in manufacturing and trading of agro-based products, and deleted the disallowance made u/s 40A(3) of the Act. The AO had invoked s.40A(3) on cash payments by A Co. purportedly as expenditure, and CIT(A) had upheld the addition due to absence of evidence that such expenses were incurred on behalf of another entity (B Ltd.) and reimbursed. ITAT held that the AO's addition was based solely on the ledger account in B Ltd.'s books and that no contrary material disproved A Co.'s claim that the cash payments were made on behalf of B Ltd. Further, A Co. had not claimed these payments as its own expenditure. Consequently, ITAT ruled that any expenditure, if at all, pertained to B Ltd., not A Co., and no disallowance u/s 40A(3) was sustainable in A Co.'s hands.
ITAT allowed the appeal of the assessee-company (A Co.), engaged in manufacturing and trading of agro-based products, and deleted the disallowance made u/s 40A(3) of the Act. The AO had invoked s.40A(3) on cash payments by A Co. purportedly as expenditure, and CIT(A) had upheld the addition due to absence of evidence that such expenses were incurred on behalf of another entity (B Ltd.) and reimbursed. ITAT held that the AO's addition was based solely on the ledger account in B Ltd.'s books and that no contrary material disproved A Co.'s claim that the cash payments were made on behalf of B Ltd. Further, A Co. had not claimed these payments as its own expenditure. Consequently, ITAT ruled that any expenditure, if at all, pertained to B Ltd., not A Co., and no disallowance u/s 40A(3) was sustainable in A Co.'s hands.
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