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2023 (9) TMI 482 - AT - Income Tax


Issues:
The issues involved in the judgment are the challenges to the additions made under section 40(a)(ia) and 40A(3) of the Income Tax Act, 1961.

Section 40(a)(ia) Challenge:
The assessee challenged the addition of Rs. 63,65,549/- under section 40(a)(ia) for not deducting TDS on interest and financial charges. The CIT(A) accepted certificates under proviso to section 201(1) amounting to Rs. 18,30,101/-. The ITAT directed the deletion of Rs. 26,84,153/- as the assessee produced relevant certificates covering this amount.

Section 40A(3) Challenge:
The addition of Rs. 2,62,06,238/- under section 40A(3) for making cash payments exceeding Rs. 20,000/- was contested. The assessee provided a certificate from Santosh Service Station explaining bounced cheques due to bank account attachment. Citing legal precedents, the ITAT held that genuine difficulty in making payments through banking channels due to bank account attachment exempts from disallowance under section 40A(3). The ITAT directed the deletion of this addition as the circumstances warranted it.

Conclusion:
The ITAT allowed the appeal in part, directing the deletion of Rs. 26,84,153/- under section 40(a)(ia) and the entire addition of Rs. 2,62,06,238/- under section 40A(3) based on the legal principles and evidence presented.

 

 

 

 

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