2019 (12) TMI 1684

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....ing Counsel for Dept. ORDER This appeal by the assessee is against the order dated 25.03.2019 of the CIT(Appeals), Hubballi relating to assessment year 2013-14. 2. The registry has sought to raise an objection that the appeal has been filed belatedly by the assessee by two days. The assessee has however filed a clarification stating that the appeal is filed in time which is as follows:- ....

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....ion of ground Nos. 2 & 3 in the grounds of appeal which in relation to disallowance of 3,47,717 made by the AO by invoking the provisions of section 40A(3) of the Income Tax Act, 1961 [the Act]. 4. The assessee is an individual carrying on business in retail cloth under the name, Ostwal Clothing. In the course of assessment proceedings for the AY 2013-14, the AO noticed that the assessee had ma....

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.... Sunday. Since the payments were made owing to business exigency, the same should not be disallowed u/s. 40A(3) of the Act. This explanation was rejected by the AO as well as CIT(Appeals). On this aspect, the CIT(Appeals) observed as follows:- "4.1 In the submissions, the assessee stated that payment of Rs.3,47,717/- made in cash was on Sunday when banks were closed on account of holiday.....

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....herefore was not in accordance with the mandate of section 40A(3) of the Act. The Hon'ble High Court took the view that the explanation of assessee that DDs were not crossed because the suppliers wanted quick realisation was an acceptable explanation and there is a valid justification for not invoking the provisions of section 40A(3) of the Act. In my view the aforesaid decision of the Hon'ble Kar....