Barnala Steel Industries Ltd. v. JCIT (2020) 78 ITR 29 (SN) (Delhi) (Trib)

S. 40A(3) : Expenses or payments not deductible — Cash payments exceeding specified limit — Assessee taking different stands before AO and CIT(A) – General remark that payment made in cash due to business exigencies not acceptable — Disallowance is held to be justified

On appeal, the Tribunal held that, the assessee had made payment in cash exceeding Rs. 20,000 to three parties.  The assessee had taken different stands before the Assessing Officer and the CIT(A).  The assessee had only made a general remark that due to business exigencies it had to purchase coal from the suppliers on cash payment.  Since such business exigency was not backed by any documentary evidence to prove that the suppliers demanded cash payment only to supply coal, it can be said that Assessee had violated the provisions of Section 40A(3) of the Act and the addition made was justified. (AY.2010-11)