Assessee-firm is  engaged in business of real estate development. The  assessee purchased land for which certain cash payments were made exceeding Rs. 20,000-Assessing Officer held  that land shown as fixed asset in balance sheet was acquired by assessee not for investment but as stock-in-trade for purpose of constructing housing project.  Assessing Officer held that cash payment made by assessee was liable to be disallowed under section 40A(3) of the Act. CIT(A) affirmed the order of the Assessing Officer.  On appeal the Tribunal held that  where land purchase  was claimed as investment and formed part of its fixed asset in balance sheet, then merely because assessee was a real estate builder it could not be presumed that said land would be commercially exploited by assessee later for constructing/developing housing project and such presumption would not trigger applicability of section 40A(3) of the Act. The Tribunal also held that  even if there was subsequent conversion or treatment of aforesaid capital asset as a stock-in-trade, provisions of sub-section (2) of section 45 would get triggered, and same would not lead to invocation of section 40A(3) of the Act.  (AY. 2015-16)