2006 (8) TMI 167

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..... was correct in law in holding that provisions of section 40A(3) of the Income-tax Act, 1961, which are mandatory, cannot be invoked in a case where estimation of gross profit is made? 2. Whether, on the facts and circumstances of the case, the Tribunal was right in deciding the issue of provisions of section 40A(3), when the issue was not decided by the Commissioner of Income-tax (Appeals)?" T .....

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..... the earlier years, a gross profit of 4.27 per cent had been applied and there was no justification for showing a lesser gross profit. The Commissioner of Income-tax (Appeals) held that there was no justification for disallowance of cash payments in excess of the limit laid down under section 40A(3) of the Income-tax Act, 1961 (in short, "the Act"), of the unrecorded transactions. The Commissione .....

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..... 8] 229 ITR 229 to the following effect: "...The question for consideration is when no deduction was sought and allowed under section 40A(3), was there any need to go into section 40A(3) and rule 6DD(j). We see force in the view taken by the Appellate Tribunal that when the income of the assessee was computed applying the gross profit rate and when no deduction was allowed in regard to the purcha .....

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