TaxTMI 
TaxTMI 
2023 (1) TMI 92
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....evidences filed, is bad in law in the facts and circumstances of the case. 2. (a) That on the facts and in the circumstances of the case the Ld. CIT(A)-43, New Delhi is not justified in confirming the addition of 12,62,9901- (out of 14,49,140/-) u/s 40A (3) for cash payments to various parties on account of purchase of handloom fabrics whereas the payments are genuine and bona fide and made due to business expediency (payments not doubted by AO) and also due to the fact that payments were made mostly at the evening hours when the banks were closed and assessee have to make payments to fulfill export consignments/supply of samples and such payments are out of the sweep of section 40A(3) as per proviso to Sec 40A(3). (b) Without prejudi....
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....urred for business exigencies. Learned counsel submitted that the assessee is a proprietary firm M/s Raju Enterprises , which is engaged in the business of manufacture and export of 100% furnishing and gift items. During the year under assessment the assessee made purchases handloom fabric/fabrics etc. amounting to Rs. 14,49,140/- from various parties in cash in excess of Rs. 20,000/- due to business expediency. He contended that vendors of the fabric accepted only cash. Moreover, Rule 6DD(f) would apply to the assessee which excludes payment to handicraft artisans. He, therefore, prayed that the impugned addition may be deleted. Per contra, learned Sr. DR for the Revenue vehemently opposed the submissions and supported the orders of the au....
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....he applicability of the said section 40(3) are required to fall under the prescribed rules for the purpose. "Provided that no disallowance shall be made and no payment shall be deemed to be the profits and gains of business or profession under subsection (3) and this sub-section where 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, in such cases and under such circumstances as may be prescribed, having regard to the nature and extent of banking facilities available, considerations of business expediency and other relevant factors" The issue of business expediency by itself does not create any exclusion. ....