2026 (1) TMI 360

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....e Assessing Officer as per provisions of Rule 46A of IT Rules, 1962 and second issue is against the deletion of addition of Rs. 2,75,17,500/- as made by the AO u/s. 40A(3) of the Act in respect of commission and salary paid by the assessee during the year. 3. Facts in brief are that the assessee is an individual and filed his return of income for the A.Y. 2018-19 declaring total income of Rs. 16,36,550/-on 11/06/2019, The return of income was processed u/s 143(1) of the Act on 25.10.2019. Subsequently, return of the assessee was selected for scrutiny. The assessment proceedings was completed by passing order u's 143(3) of the LT Act, 1961 on 08/04/2021 at an assessed income of Rs. 2,92.65,172- after disallowing the expenditure of Rs.....

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....documents to prove the identity, existence and genuineness of the payments of salary, bonus and commission payments during the financial year 2017-18. The CIT(A) further stated that the assessee submitted date wise detailed individual ledger account of all the employed, giving names, actual date of payments, date of credit of salary, nature of transactions, to whom salary and bonus were paid during the financial year 2017-18. These ledger accounts show that no cash payment was in excess of Rs. 10,000/- on a single day. The CIT(A) further stated that as the assessee has submitted the daily cash book for the entire financial year during the course of appellate proceedings, there is no ground to apply the provision of Section 40A(3) in the cas....

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....s/evidences have been taken into account by the Ld. CIT(A) in contravention to the Section 46A of Income Tax Rules, 1962, therefore, the order passed by the ld. CIT(A) deserves to be reversed and the order of the ld.AO should be upheld. 7. After hearing the rival contentions of the parties and perusing the material available on record, we find that the assessee has incurred these expenses for which he evidences are available before us. We note that the salary, bonus expenses and commission expenses were disbelieved by the AO on the assumption that they were paid in contravention of Section 40A(3) of the Act that means in excess of Rs. 10,000/- on a single day. The ld. CIT(A) held that the AO has misunderstood and assumed that the details....