https://www.taxtmi.com/caselaws?id=444908 ITAT Rajkot quashed PCIT's revision order u/s 263 regarding addition u/s 40A(3) for alleged cash payments exceeding Rs. 20,000. The assessee argued payments were partner withdrawals from capital accounts, not business expenses. ITAT held that capital withdrawals are not subject to Section 40A(3) provisions as they don't constitute business expenses. The AO had already examined all relevant documents including partner capital accounts, vouchers, and cash books during original assessment proceedings before accepting the return. Since the issue was properly adjudicated with due application of mind by the AO, the assessment order was neither erroneous nor prejudicial to revenue interest, making the revision proceedings void ab initio. en-us Tue, 29 Aug 2023 00:00:00 +0530 Thu, 26 Oct 2023 07:38:48 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=444908 ITAT Rajkot quashed PCIT's revision order u/s 263 regarding addition u/s 40A(3) for alleged cash payments exceeding Rs. 20,000. The assessee argued payments were partner withdrawals from capital accounts, not business expenses. ITAT held that capital withdrawals are not subject to Section 40A(3) provisions as they don't constitute business expenses. The AO had already examined all relevant documents including partner capital accounts, vouchers, and cash books during original assessment proceedings before accepting the return. Since the issue was properly adjudicated with due application of mind by the AO, the assessment order was neither erroneous nor prejudicial to revenue interest, making the revision proceedings void ab initio. Case-Laws Income Tax Tue, 29 Aug 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=444908