Cash payment made on Sunday, being last date of registration of sale deed, won’t be disallowed

Where assessee paid cash on Sunday in order to execute sale deed same being covered by exception provided under rule 6DD(j), disallowance under section 40A(3) was to be deleted

IN THE ITAT CHANDIGARH BENCH ‘B’

HI Tech Land Developers & Builders

v.

Additional Commissioner of Income-tax

IT APPEAL NO. 901 (CHD.) OF 2013
[ASSESSMENT YEAR 2010-11]

JANUARY  12, 2015

Section 40A(3) of the Income-tax Act, 1961, read with rule 6DD(j) of the Income-tax Rules, 1962 – Business disallowance – Cash payment exceeding prescribed limits (Payment made on Sunday) – Assessment year 2010-11 – Assessee entired into agreement to purchase land – It was agreed that sale deed would be executed, i.e., registered on or before 28-3-2010 and assessee was required to make full payment before that date which was 28-3-2010 sunday – Assessee made cash payment on said date – Assessing Officer disallowed cash payment under section 40A(3) on ground that assessee had plenty of time before 28-3-2010 and assessee had not shown why it was necessary to make payment on sunday – Whether since assessee paid cash on Sunday in order to execute sale deed and same was covered by exception provided under rule 6DD(j), disallowance was to be deleted – Held, yes [Para 9] [In favour of assessee]