Case Number: ITA 5191/DEL/2019
Appellant: Kedar Nath Sawhney, Delhi
Respondent: ACIT, Circle -34(1), New Delhi
Assessment Year: 2012-13
Order Type: Final Tribunal Order
Date of Order: March 17, 2021
Case Filed on: June 6, 2019
Pronounced on: March 17, 2021
The case revolves around an appeal filed by Kedar Nath Sawhney against the order of the CIT(A) confirming the addition of Rs.88,71,511 under Section 40A(3) of the IT Act. The provision restricts cash transactions above a certain limit, aimed at curbing unrecorded transactions in business activities.
The appellant contested that the disallowance made by the Assessing Officer was unjust as most payments were unavoidable cash transactions made during transport operations, including payments for diesel, tolls, and repairs. These transactions, argued the appellant, were essential for ongoing business operations and were conducted under circumstances where banking transactions were impractical.
The Tribunal considered the arguments and circumstances of the case, referencing legal precedents that supported the appellant’s position. It was concluded that the payments were justified given the nature of the business and its operational requirements. Therefore, the Tribunal decided to overturn the previous decision, directing the Assessing Officer to delete the addition.
This case underscores the complexities of tax law in business operations, especially for businesses that operate under conditions necessitating immediate cash transactions. The ruling highlights the necessity of considering practical business realities in the enforcement of tax laws.
ITA 5191/DEL/2019: Kedar Nath Sawhney’s Challenge Against Section 40A(3) Disallowance
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