2008 (7) TMI 1026

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.... by the learned Tribunal. We have found that the Tribunal has elaborately dealt with the matter in question. It appears that the Tribunal first dealt with the matter on account of applicability of Section 40A(3) of the Income Tax Act and the appeal was against the deletion made by the CIT (Appeals) for such disallowance made under the said Section. Assessee's submission was rejected on the gro....

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....A(3) in respect of expenditure incurred by the assessee other than account payee cheques or bank drafts. We find that the ITAT, Kolkata Bench has considered the disallowance u/s 40A(3) in block assessment in the case of Smt. Gita Rani Mondal vide IT(SS) A.No.7(Kol) of 1997. The ITAT came to the conclusion that by very nature of unrecorded expenditure, the payment can not be made by account payee c....

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....rate and when no deduction is allowed in regard to the purchases made by the assessee, the Department can never look into the provisions of section 40A(3) read with rule 6DDJ of the Income Tax Rules, 1962. No disallowance could be made as no deduction is allowed to and claimed by the assessee in respect of purchases. When Gross Profit rate is applied, everything is taken case of and the Department....