TaxTMI 
TaxTMI 
2025 (1) TMI 1713
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....e grievance of the assessee is that the ld.CIT(A) erred in confirming the disallowance of Rs. 16,11,675/- made by CPC in its intimation u/s.143(1)(a) of the Act invoking section 40A(3) of the Act. 3. Brief facts of the case are that the assessee is a dealer in Fruits and regular import Apple, Pear, Cashew etc. Income of Rs. 11,13,040/- declared in the return for the A.Y. 2019-20 furnished on 31.10.2019. Books of accounts are regularly audited and the Audit Report has also been uploaded along with the ITR. Based on the observation of the Tax Auditor, CPC made an adjustment making disallowance u/s.40A(3) of the Act at Rs. 16,11,675/-. 4. Aggrieved assessee preferred appeal before the ld.CIT(A). It was contended that the Tax Auditor has ....
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....s having direct bearing to the issue in hand and which is relevant for adjudication read as under : "Section 40A(3) of the Act : "(3) Where the assessee incurs 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, or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed, exceeds ten thousand rupees, no deduction shall be allowed in respect of such expenditure." Rule 6DD of the Income Tax Rules, 1963 "6DD. No disallowance under sub-section (3) of section 40A shall be made and no payment shall be deemed to be the prof....
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....ustment from any account in a bank to any other account in that or any other bank; (iv) a bill of exchange made payable only to a bank; (v) [***] to (vii) Explanation.-For the purposes of this clause and clause (g), the term "bank" means any bank, banking company or society referred to in sub-clauses (i) to (iv) of clause (a) and includes any bank [not being a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), whether incorporated or not, which is established outside India; (d) where the payment is made by way of adjustment against the amount of any liability incurred by the payee for any goods supplied or services rendered by the asse....
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....ted for a continuous period of fifteen days or more in a place other than his normal place of duty or on a ship; and (ii) does not maintain any account in any bank at such place or ship; (j) [***] (k) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person; (l) where the payment is made by an authorised dealer or a money changer against purchase of foreign currency or travellers cheques in the normal course of his business. Explanation.-For the purposes of this clause, the expressions "authorised dealer" or "money changer" means a person authorised as an authorised dealer or a money changer to deal in foreign curr....