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TMI Blog2022 (1) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,590/- 2. On the facts and in circumstances of the case and in law, the Ld. CIT(A) erred in making an addition of Rs. 7,30,300/- on the basis of Disallowance of expenses u/s 40A(ia) and 40A(3). 3. On the facts and in circumstances of the case and in law, the Ld. A.O. and Ld. CIT(A)-3 erred in disallowing purchases made only on the basis of that payment was made in cash. 4. On the facts and in circumstances of the case and in law, the Ld. A.O. and Ld. GIT(A)-3 erred in disallowing interest paid to NBFC and other Financial Institutions merely because of Non-Deduction of TDS despite of providing interest certificates, confirmations and certificates in form 26A. 3. Brief facts of the case are as under:- In this case the return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had incurred certain payments in cash, in excess of limits provided, in the provision of See 40A(3) of the Act. The AO noticed that most of these cash payments were made to farmers, dairy farm owners, in villages for milk, transporters, etc.. as under- Loose Milk Purchase (cow)(tanker) Rs. 2,20,300/- Milk crates Rs. 40.515/- SMP bags Rs. 53.463/- Total Rs. 3,14,278/- Since the assessee could not furnish the details of party / person to. whom the payments had been made, the AO, therefore, disallowed the aforementioned sum of Rs. 3,14,278/-, by invoking the provisions of Sec 40A(3) of the Act. 4. On this issue of non deduction of TDS. The Ld.CIT(A) has held as under:- I have carefully considered the facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd as well as Bajaj Fin-serv. certifying the principal and interest components in the EMIs fixed for repayment of loan and incorporation thereof in their respective returns of income. Accordingly it is claimed that the provisions of Sec. 40(a)(ia) of the Act are not applicable, therefore, the disallowance made by the AO may be deleted. From the above facts it is seen that the appellant had borrowed loan for the business purpose ("for purchase of vehicles for business use), which was repaid through EMIs. The EMIs comprised of component of interest and principal amounts and was paid through ECS. Further these NBFCs have duly reflected these interests received, in their statements of income, filed with the department. In compliance, (he ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... backward area of Dhule district, where the transport facilities are not available. In case of short supply of milk, appellant has to ask other local dairy plants or local milk whole-sellers, to supply milk on urgent basis. In these circumstances, at any cost, it is not possible to make payments through banking channels, as the suppliers will not wait till clearance of payments. It is further claimed that the bank is situated about 20 Kms., away from plant, therefore, in this scenario it is compulsory to make payments by way of cash, therefore, the appellant was forced to make the cash payment. These purchases of milk were made from Shripur. As regarding cash payments against purchase of milk crates is concerned it is contended that the old ..... X X X X Extracts X X X X X X X X Extracts X X X X
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