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TMI Blog2022 (1) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Madhav Govind Dulshete [ 2018 (10) TMI 869 - BOMBAY HIGH COURT] as to whether the disallowance is maintainable even the transaction is genuine, in our opinion, is not applicable to the facts on hand. However, we find merit in the alternative contention of the assessee that the expenditure incurred in cash forming part of the closing stock which means this has not been claimed as deduction while computing the income under the business head, therefore, the question of disallowance u/s. 40A(3) does not arise. Thus, the grounds raised by the assessee in this regard are allowed. - ITA No. 2856/PUN/2016 - - - Dated:- 11-1-2022 - Inturi Rama Rao, Member (A) And S.S. Viswanethra Ravi, Member (J) For the Appellant : Sanket J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contends vehemently that the provisions u/s. 40A(3) of the Act is not attracted towards expenses/purchases when there is no deduction claimed and argued that it is settled law that section 40A(3) of the Act only restricts the deductions which are otherwise allowable. He submits that the cash payments are genuine and the provisions u/s. 40A(3) is not attracted towards the genuine cash payments which were identified and acknowledged by payee. Further, the said cash payments were made keeping in view the business exigency to finalize the deal and to avoid the competitors in snatching the deal. 5. The ld. DR, Shri M. Jaswani relied on the orders of authorities below and contended that the identical issue on similar facts was decided by this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 20,000/- to the profit and loss account, which, in our opinion, the provisions under section could be invoked. Another aspect as raised by the ld. AR is that the said expenditure were incurred for the business exigency though the expenditure debited to profit and loss account which is neutralized by showing the purchase of lands as stock in trade as on 31-03-2012 on credit side. According to him the provisions u/s. 40A(3) is not applicable. 7. We note that the certain High Courts including the Hon'ble High Court of Gujarat in the case of Anupam Tele Services Vs. ITO reported in (2014) 366 ITR 122 (Guj.) and the Hon'ble High Court of Rajasthan in the case of Harshila Chordia Vs. ITO reported in (2008) 298 ITR 349 (Raj.) hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s. 40A(3) of the Act. 9. Coming to the facts on hands in the present case the fact remains admitted that the sellers from whom the assessee purchased lands were identified the transaction and also acknowledged the cash payments, thereby, it shows the transaction is genuine, as discussed in the foregoing paragraphs that the assessee treated the said lands as stock-in-trade and no deduction claimed. The ratio laid down of the Hon'ble High Court of Bombay in the case of Madhav Govind Dulshete (supra) as to whether the disallowance is maintainable even the transaction is genuine, in our opinion, is not applicable to the facts on hand. However, we find merit in the alternative contention of the assessee that the expenditure incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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