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ITAT deleted disallowance as payments made by assessee were genuine
ITAT deleted disallowance as payments made by assessee were genuine
During assessment, AO noticed from books of account and vouchers, that assessee had made cash payment on account of truck loading wages charges in violation of s 40A(3). AO made disallowance of expenses of Rs.1,08,24,239. CIT(A) confirmed the action of AO. ITAT held that that assessee's payments were genuine and not doubted by the Revenue, and that assessee's mine was in a tribal area of Orissa with no banking facility. It deleted disallowance.-501451
1. During the course of assessment proceedings for AY 2009-10, the AO noticed from the books of account i.e. ledger and bills and vouchers produced before him that the assessee has made cash payment on account of truck loading wages charges in violation of the provision of section 40A(3) (of Income Tax Act, 1961) i.e. the payment in cash above Rs.20,000/- to a single person. Accordingly, the AO made disallowance of expenses incurred on account of truck loading wages charges of Rs.1,08,24,239/-.
2. CIT(A) confirmed the action of AO.
3. On appeal, the ITAT held as under:
4. From the above facts and circumstances, it is clear that the assessee's payments are genuine and not doubted by revenue. The revenue could not controvert that the assessee's mine is in tribal area of Orissa where no banking facility is available and labourers do not have any bank account to whom assessee has made payment. Accordingly, in the given facts and circumstances of the case, we delete the disallowance made by AO and confirmed by CIT(A) by invoking the provisions of section 40A(3) (of Income Tax Act, 1961). The appeal of the assessee is allowed.
5. In the result, appeal of assessee is allowed.”
Case Reference- M/s. Lal Trades & Agencies (P) Ltd. Vs. Joint Commissioner of Income TaxIN
THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH: KOLKATA [Before Shri Mahavir Singh, JM & Shri M. Balaganesh, AM] I.T.A No.425/Kol/2013 Assessment Year: 2009-10
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