2003 (5) TMI 56 - HC - Income Tax

The appellant claims to be a sub-broker and engaged in purchase and sale of shares and debentures etc. He was found to have made some cash payments exceeding Rs. 10, 000 to the tune of Rs. 5, 10, 921 in violation of the provisions of section 40A(3) of the Income-tax Act read with rule 6DD. Though he explained his position but the Income-tax Officer felt dissatisfied and ordered addition of Rs. 5, 10, 921 for the assessment year 1992 1993 by order dated October 4 1993. He took appeal against this and the Appellate Commissioner by order dated July 6 1994 directed its deletion The Income-tax Appellate Tribunal s order resultantly becomes unsustainable and is set aside and that passed by the Appellate Commissioner is affirmed to allow this appeal.

Summary

The appellant, a sub-broker, made cash payments exceeding Rs. 10,000. The Income-tax Officer ordered an addition of Rs. 5,10,921, but the Appellate Commissioner deleted it citing business exigencies and exceptions to section 40A(3). The Revenue appealed to the Tribunal, which upheld the addition, but the High Court set aside the Tribunal's order and affirmed the Appellate Commissioner's decision.