2014 (10) TMI 951

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..... 3,409/- in cash. It is also an undisputed fact that the auditors have qualified in their report that amount of ₹ 9.18 lacs have been paid in cash in violation of the provisions of section 40A(3) of the Act. Although the same was claimed to be allowable as per Rule 6DD, however, no details have been furnished, neither before the Revenue authorities nor before us. Therefore, the expenditure of ₹ 9.18 lacs are clearly disallowable, as per the qualification of the Auditors. That leaves us with a balance disallowance of ₹ 38.76 lacs. In our considered opinion, 50% out of this should meet the ends of justice, therefore, in addition to the disallowance of ₹ 9.18 lacs, we direct the A.O. to restrict the disallowance out of t .....

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..... not accepted by the A.O. who was of the firm belief that the assessee is maintaining office premises and staff and, therefore, certain expenditure have to be attributed towards exempt income. The A.O. went on to compute the disallowance by applying the formula given in Rule 8D and worked out the disallowance being 0.5% of the average investment at ₹ 5,03,361/-. Proceeding further, the A.O. noticed that the assessee has incurred various expenses in cash. The assessee was asked to submit the details of cash expenses. The assessee filed the details of cash expenses amounting to ₹ 2,39,73,409/- and also provided cash vouchers which were examined on a random basis. The A.O. examined the details with the vouchers and found that most .....

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..... urposes of the business. Per contra , the ld. DR supported the orders of the authorities below. 6. We have carefully perused the orders of the authorities below. It is not in dispute that the assessee has incurred expenditure amounting to ₹ 2,39,73,409/- in cash. It is also an undisputed fact that the auditors have qualified in their report that amount of ₹ 9.18 lacs have been paid in cash in violation of the provisions of section 40A(3) of the Act. Although the same was claimed to be allowable as per Rule 6DD, however, no details have been furnished, neither before the Revenue authorities nor before us. Therefore, the expenditure of ₹ 9.18 lacs are clearly disallowable, as per the qualification of the Auditors. That l .....

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