The assessee engaged in the business of real estate purchased certain portion of lands in cash which was added to work in progress . The AO disallowed the said payment by invoking provision of section 40A(3) of the Act . On appeal CIT(A) affirmed the view of the AO. On appeal to the Tribunal the Tribunal held that the expenditure incurred was not claimed as deduction hence disallowance was deleted . ( ITA No. 2856/Pun/2016 dt . 11-1 -2022 )( AY. 2012-13 )
Vikrant Happy Homes Pvt Ltd v. DCIT ( 2022) The Chamber’s Journal -May – P. 82 ( Ahd ) ( Trib)
S. 40A(3) :Expenses or payments not deductible – Cash payments exceeding prescribed limits – Land purchase – Real estate business- Expenditure added to closing work in progress – No disallowance can be made .[ S. 145 ]