9911796707
TMI Blog2014 (6) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... section 40A(3) of the act - the lower authorities have rightly invoked the provisions of section 40A(3) of the Act and made the disallowance – Decided against Assessee. Disallowance of 50% of business expenses - Subscription & Donations – Held that:- The assessee has debited a sum under the head “Subscription & Donations” - the payment was made keeping in view the specific nature of business of the assessee, which involves buying and selling of land which is scattered over various areas – there is different from other stock in trade which can safely be stored, according to assessee the said payment would constitute necessary expenditure u/s 37 of the Act – the assessee has made the payment to different persons to safeguard its business ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee has made payments to various parties in cash in regtard to purchase of land in excess of limits prescribed as per the provisions of section 40A(3) of the Act. It was contended before the AO by the assessee that cash was paid as per demand and insistence of the vendor. However, AO being not satisfied, made the disallowance u/s. 40A(3) of the Act. Aggrieved, assessee preferred appeal before CIT(A), who confirmed the disallowance stated that in the given facts of the case the provisions of section 40A(3) of the Act are applicable and in this case assessee has incurred expenditure in respect of purchase transaction made in cash exceeding Rs.20,000/- otherwise than by account payee cheque or account payee bank draft. According to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression of wide import and includes such expenditure as a prudent businessman incurs for the purpose of business. He stated that once there is a business expediency the expenditure should have been allowed. Further, Ld. counsel for the assessee stated that there is exception provided u/s. 40A(3) of the Act and as per Rule 6DD of the Rules it takes cares only banking facility and no specific rules remains on statute book after deletion of Rule 6DD(j) of the Rules so as to take care of business expediency and other relevant factors. He stated that the decision of Hon'ble Supreme Court in the case of S. A. Builders Ltd. (supra) should have been applied here. He also relied on the decision of Hon'ble Rajasthan High Court in the case of Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .00 under the head subscription & donation to local clubs and others. The above expenses was incurred wholly and exclusively for smooth running of the business." 6. We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee has debited a sum of Rs.1,60,301 under the head "Subscription & Donations". The assessee before the lower authorities and even now before us contended that this payment was made keeping in view the specific nature of business of the assessee, which involves buying and selling of land which is scattered over various areas and, therefore, is different from other stock in trade which can safely be stored, according to assessee the said payment would constitute necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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