| COURT: | ITAT Jaipur |
| CORAM: | Vijay Pal Rao (JM), Vikram Singh Yadav (AM) |
| SECTION(S): | 40A(3), Rule 6DD |
| GENRE: | Domestic Tax |
| CATCH WORDS: | cash payments, disallowance |
| COUNSEL: | Rajiv Sogani |
| DATE: | May 15, 2018 (Date of pronouncement) |
| DATE: | May 24, 2018 (Date of publication) |
| AY: | 2013-14 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 40A(3) Rule 6DD: No disallowance can be made for cash payments if the transaction is genuine and the identity of the payee is known. Rule 6DD is not exhaustive. The fact that the transaction does not fall with Rule 6DD does not mean that a disallowance has to be per force made (all judgements considered) | |
The legal proposition that arises from the above decision of the Hon’ble Rajasthan High Court is that the consequences, which were to befall on account of non-observation of sub-section (3) of section 40A must have nexus to the failure of such object. Therefore the genuineness of the transactions and it being free from vice of any device of evasion of tax is relevant consideration and which should be examined before invoking the rigours of section 40A(3) of the Act
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