TaxTMI 
TaxTMI 
2012 (10) TMI 391
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....se of Attar Singh Gurmukh Singh v. ITO [1991] 191 ITR 667(SC) had held that the word "expenditure" mentioned in Section 40A(3) had wide import and meant all outgoings of whatsoever nature. Further, as per the Revenue, Hon'ble jurisdictional High Court in the case of CIT v. A.D. Jayaveerapandia Nadar & Sons (2007) 207 CTR 428 had held payments being effected to associate concern, would not be a justifiable reason for deleting a disallowance made under Section 40A(3) of the Act. 2. Facts apropos are that assessee, proprietor of M/s Ananda Oil Corporation, trading in oil and also a Director of a company called Kaleesuwari Refinery Private Limited, was subjected to a search under Section 132 of the Act. Notice was issued under Section 153A o....
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.... 4. Now before us, learned D.R., strongly assailing the order of CIT(Appeals), submitted that the disallowance was rightly done by the Assessing Officer relying on Section 40A(3) of the Act. As per learned D.R., it was not necessary that payments should be linked to any expenditure. Learned D.R. pointed out that Hon'ble Apex Court in the case of Attar Singh Gurmukh Singh (supra) had clearly held that the word 'expenditure' had a wide import and included all outgoings whatsoever. As per the learned D.R., assessee had made the payments for purchases and the payments were against such purchases. As for the argument that Section 40A(3) would not be attracted to transactions with sister concern, learned D.R. submitted that the decision of jur....
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....edings. Assessing Officer himself has annexed to the assessment order, copies of the ledger accounts of these three entities in assessee's books. We find that what assessee has produced before us now is in substantial variance with the ledger account copies annexed by the Assessing Officer to the assessment order. In the absence of a certificate by the assessee or its authorized representative that these ledger copies, which are now produced before us, were the same that were produced before the Assessing Officer, copies of ledger pages of the three entities annexed to the assessment order alone can be relied upon. Assessee has not submitted at any point of time that these ledger pages, which formed part of the assessment order, were incorr....
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....he rule provides that an assessee can be exempted from the requirements of payment by crossed cheque or a crossd bank draft where the purchases are made of certain agricultural or horticultural commodities or from a village where there is no banking facility. Section 40A(3) is, therefore, attracted to payments made for acquiring stock-in-trade and other materials. This is also the view taken by several High Courts - Sajowanlal Jaiswal v. CIT [1976] 103 ITR 706 (Ori), U.P. Hardware Store v. CIT [1976] 104 ITR 664 (All), Raton Udyog v. ITO [1977] 109 ITR 1 (All), PH. Textiles v. CIT [1980] 121 ITR 237 (Ker.), CIT v. Kishan Chand Maheswari Dass [1980] 121 ITR 232 (Punj. & Har.), Kanti Lal Purshottam & Co. v. CIT [1985] 155 ITR 519 (Raj.), CIT ....