Dismissing the appeals, that only 25 per cent. of the payments effected by the assessees were in cash and the remaining 75 per cent. were through banking channels, that is, by cheque or demand draft. The genuineness of the transaction was hardly a matter, which should weigh in the minds of the Assessing Officer while examining whether the assessees had violated section 40A(3). The disallowance was justified. (AY.2014-15, 2015-16)
Vaduganathan Talkies v. ITO (2020) 428 ITR 224 / 275 Taxman 599 (Mad.)(HC)
S. 40A(3) : Expenses or payments not deductible-Cash payments exceeding prescribed limits-Banking facilities available-No evidence of compelling circumstances justifying payments-Disallowance is justified. [R. 6DD]