2016 (3) TMI 1303

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....essing Officer imposed liability to tax on Rs.61,06,000/- applying Section 40A(3) of the Income Tax Act (hereinafter referred to as 'the Act') which provides that any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure. It was an admitted position on behalf of the assessee that payments to the extent of Rs.61,06,000/- had been made in cash to four different persons towards payment of purchase price for lands as the assessee is engaged in the business of real estate dealings and construction of multistoried building....

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....e Authority therefore arrived at the conclusion that in the facts of the case the Assessing Officer had acted mechanically without due and proper application of mind to statutory provisions. 4. In appeal before the Tribunal, the departmental representative in a rhetorical manner simply relied upon the order of the Assessing Officer without any ground to assail the order of the Commissioner of Income Tax (Appeals). The Tribunal again noticed that full payment had been made to the seller under the registered deeds was not disputed by the Assessing Officer and neither was the identity or genuineness of the sellers in dispute or the contention of the assessee that the sellers being villagers had no bank accounts and therefore insisted on cash ....