2023 (6) TMI 217

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... commercial expediency in the books of accounts of assessee. As decided in Reliance Petroproducts (P) Ltd [ 2010 (3) TMI 80 - SUPREME COURT] merely because the claim of assessee was not accepted for not found to be acceptable by the revenue authorities the penalty u/s. 271(1)(c) of the Act, cannot be levied on the assessee. AO dismissed claim of expenditure of assessee on account of violation of section 40A(3) of the Act, without raising any other allegation or ground of dismissal and hence, when the assessee disclosed and recorded entire claim on medical emergencies in its books of accounts then neither it can be alleged that assessee has furnished inaccurate particulars of income or has concealed particular of its income. Decided in .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ed addition under section 40A(3) r.w. Rule 6DD was made by the ld. Assessing Officer and upheld by the ld. CIT(A), without appreciating the facts and circumstances in which the payments were made. The ld. counsel submitted that the genuineness of the expenditure has not been dispute by the authorities below and the expenditures in cash was made under serious medical condition at different times wherein there was no option but to make payment in cash due to medical emergencies during odd hours. Placing reliance on the judgment of Hon ble Supreme Court in the case of Reliance Petroproducts (P) Ltd. vs. CIT [2010] 189 taxman 322 (SC). The ld. counsel submitted that the claim of assessee was dismissed on technical ground of section 40A(3) of th .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... hing inaccurate particulars in respect of said amount. It is also pertinent to note that neither the Assessing Officer nor ld. CIT(A), in the quantum proceedings, has doubted or disputed amount of expenditure and its incurring on medical emergencies for the treatment of employees and directors of the company which falls under commercial expediency. However, the said claim was disallowed by the Assessing Officer by observing that the exceptions given in rule 6DD of I.T Rule 1962 are not applicable to the case of assessee and he made disallowance u/s. 40A(3) of the Act, on the allegation that the assessee has made cash payment exceeding Rs. 20,000/- in violation of said provision of the Act. 6. Keeping in view above factual matrix of the i .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X