2022 (1) TMI 651

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.... on account of disallowance u/s. 40A(3) of the Act in the facts and circumstances of the case. 3. Brief facts relating to the issue are that the assessee is a company engaged in the business of land dealing and development. The assessee conducts its business under the name and style as Vikrant Happy Homes Pvt. Ltd. The assessee filed return of income declaring a total income of Rs. 3,16,20,860/- and the AO completed the assessment by determining the total income at Rs. 3,22,91,187/- inter alia making addition u/s. 40A(3) of the Act. The CIT(A) confirmed the same. Aggrieved by which, the assessee is before us by raising above mentioned grounds. 4. Before us, the ld. AR, Shri Sanket Joshi submits that the assessee purchased certain lands/pl....

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....rused the material available on record. As noted above the contention of the ld. AR is that the assessee did not claim the deduction and the provisions u/s. 40A(3) cannot be held to be invoked against such payments exceeding the limit Rs. 20,000/-. He also placed on record Agreements at Page Nos. 1 to 20 which are true English translation of Agreements between the assessee and respective payees to show that the payments exceeding Rs. 20,000/- totaling to Rs. 3,50,000/- were incurred for genuine transaction, the transaction of which identified and acknowledged by the payees. We note that it is settled law as rightly pointed by the ld. AR when there is no deduction no disallowance would follow but however, in the present case, the CIT(A) by p....

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.... ITR 186 (Kar.) and the Hon'ble High Court of Calcutta in the case of Bagmari Tea Company Ltd. Vs. CIT reported in (2001) 251 ITR 640 (Cal.) have confirmed the disallowance where the payment was made in cash exceeding the stipulated amount notwithstanding the genuineness of the transaction. 8. Let us examine the decision of Hon'ble Jurisdictional High Court in the case of Madhav Govind Dulshete (supra), brief facts therein, that the assessee engaged in the business of sale of Kerosene which was purchased from the notified dealers. Some of the payments were made in cash or by others in cheque. The AO made addition by invoking Section 40A(3) of the Act in respect of cash payments exceeding the limit prescribed under the said provisio....