TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 416
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....rdingly, the delay of 17 days is condoned. 3. The ld. AR submits that the assessee is not interested to prosecute ground No. 1 and prayed to dismiss the same. Hence, ground No. 1 is dismissed as not pressed. 4. Ground No. 2 raised by the assessee challenging the action of CIT(A) in confirming the disallowance u/s. 40A(3) of the Act without appreciating the business expediency in payment of cash towards genuine transaction in the facts and circumstances of the case. 5. Brief facts relating to the issue on hand are that the assessee is an individual and derives income from land deals and construction. The assessee filed return of income declaring a total income of Rs.1,45,240/- and agricultural income at Rs.80,700/-. Under scrutiny notices....
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....sale consideration relating to the purchasing of land in S. No. 2526/2B which was admitted before the registering authority, Government of Maharashtra. He argued that it is a genuine transaction, the assessee paid the said amount on the demand of the sellers having no option. He submits that the cash payment was incorporated in the purchase deed which is in the knowledge of AO. The AO examined the transaction in every detail and found no discrepancy in identifying the sellers and their confirmation. He argued that the payment is made in cash involving genuine transaction the disallowance u/s. 40A(3) is not justified. He referred to para No. 4.3 of the assessment order and submits that the assessee purchased ancestral property belong to Maga....
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.... total sale consideration paid before Sub- Registrar of the State Government office. Further, he referred to the decision of Hon'ble High Court of Calcutta in the case of Principal Commissioner of Income Tax Vs. Standard Leather (P) Ltd. reported in (2022) 6 NYPCTR 92 (Cal) and drew our attention to para No. 4 of the said decision and argued that the Hon'ble High Court of Calcutta by placing reliance on the decision of Hon'ble Supreme Court in the case of Attar Singh Gurmukh Singh (supra) held that Rule 6DD of the Rules are intended to regulate business transaction and it has been laid down that it is always open to the assessee to furnish documents to prove that the payment in the manner prescribed u/s. 40A(3) of the Act was not practicabl....
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....ash payments made are out of the income from disclosed sources. Further, it is held the terms of section 40A(3) of the Act are not absolute. I find the collective reading of provisions u/s. 40A(3) of the Act along with Rule 6DD of the Rules provides where an assessee can be exempted from the requirement of payment by a crossed cheque or bank draft in the circumstances specified under which the assessee is unable or not practicable causing genuine difficulty. I find, explanation in response to show cause issued by the AO, that it was explained by the assessee that due to disputes between Magare brothers, the sellers, decided to sell their capital asset and demanded the settlement of purchase consideration in cash having no faith amongst them....
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....ecord before the CIT(A) and the CIT(A) held the facts in the said case are entirely different from the facts in hand, in our opinion, is incorrect for the reason, the Tribunal in para 11 at page 7 of the said order clearly held the cash payment of Rs.3 lakhs were part and parcel of total sale consideration which was admitted before the Government authority i.e. Sub-Registrar of State of Maharashtra. The Tribunal held the disallowance u/s. 40A(3) of the Act is not maintainable if the cash payment is part and parcel of total sale consideration. In the present case also the cash payment was part and parcel of total sale consideration which is not disputed by both the lower authorities. Therefore, the finding of this Tribunal in the case of Dny....