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TMI Blog2019 (12) TMI 1330X X X X Extracts X X X X X X X X Extracts X X X X ..... s reproduced by the ld.CIT(A) on page no.7. CIT(A) is of the opinion that the case of the assessee falls within the exception because it has made this payment on account of business exigency and it was not practical to make the payment through account payee cheque. - Decided in favour of assessee. - ITA.No.2891/Ahd/2016 - - - Dated:- 4-12-2019 - Shri Rajpal Yadav, Hon ble Judicial Member And Shri Waseem Ahmed Hon ble Accountant Member Revenue by: Shri Dileep Kumar, Sr.DR Assessee by: None ORDER Rajpal Yadav, Revenue is in appeal before the Tribunal against order of the ld.CIT(A)-2, Ahmedabad dated 22.8.2016 passed for the assessment years 2010-11. 2. Revenue has taken four grounds of appeal, but its grieva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e went in appeal before the Hon ble High Court in Tax Appeal No.1314 of 2018. Hon ble court has set aside the order of the Tribunal vide order dated 5.8.2019, and remitted to the Tribunal for adjudication of the appeal on merit, because the assessment was reopened on an audit objection. If the case is being reopened on audit objection, then it fall within the exception of the circular no.3 of 2018 and the appeal cannot be dismissed on account of low tax effect involved in it. 4. With the above background, we proceed to decide the appeal on merit. The ld.CIT(A) has recorded a detailed finding. It reads as under: I have carefully considered the facts of the case, the reassessment order and the written submission of the appellant. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,35,000/-towards stamp duty, registration fee, typing Xerox and other expenses and balance ₹ 20,000/- for professional fees of M/s. C.C. Gandhi Co. It was also submitted that as per the amended provisions due to business expediency and other factors, the assessee has to make payment in cash and the same is not disallowable u/s. 40A(3) of the I. T. Act. In this regard, it has also relied upon the CBDT Circular No. 220. It was also submitted that the payment towards stamp duty, registration fee etc. are being payment to the government which are not accepted through cash, therefore, these payments were made to the government through M/s. C. C. Gandhi Co. and therefore, no disallowance could be made. 5.6. Having considered the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses were not relating to the loans taken by the appellant from SBI. 5.7. In view of the aforesaid discussion, the provisions of section 40A(3) of the I. T. Act are not applicable over the facts of the case, and therefore, the disallowance made by the AO is deleted. 5. Section 40A(3) contemplates that where assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on bank account excess ₹ 20,000/- then no deduction shall be allowed in respect of such payment. However, Rule 6DD of Income Tax Rules, 1962 provide an exemption from applicability of this clause, and the ld.CIT(A) has followed rule 6DD which has been explained ..... X X X X Extracts X X X X X X X X Extracts X X X X
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