2004 (7) TMI 271

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....owing ground of appeal: "The learned CIT(A) has erred in confirming the addition under s. 40A(3) of the IT Act of Rs. 3,48,705. It is submitted that on the facts and circumstances of the case, no disallowance is called for under s. 40A(3) and the addition made by way of disallowance of Rs. 17,43,519 be deleted." 2. The brief facts are that the assessee is in the retail business of threads an....

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.... these circumstances, the cash payments were made on the insistence of the party. Reliance was placed on CBDT Circular No. 250, dt. 11th Jan., 1979. It was contended that a too technical approach should not be applied to the assessee's case. The CIT(A), however, held that s. 40A(3) was amended w.e.f. 1st April, 1997 dispensing cl. (j) of r. 6DD and in case of such cash payments disallowance of 20 ....

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....her contended that even if this plea is not acceptable, what legislature intended was to tax retail traders in a summary manner at the net profit of 5 per cent of the turnover. An additional plea was made that the assessee may be subjected to s. 44AF(1), i.e., the income may be assessed at the rate of 5 per cent net profit on total turnover under s. 44AF(1) and provisions of s. 40A(3) may not be a....