One of my client is doing business of trading in plots and flats . He has purchased the the plots in cash . He has registered the sale deed and also has other proofs. But as purchase is made in cash over 50 lakhs how we can give notes in tax audit reports ? and is he liable to penalty u/s 40 A (3).
since your client if in the business of trading in plots therefore purchase of plots are to b treated as business purchases
as per suprime court in case of attar singh gurmukh singh (1991)(191itr 667) business purchases are also covered by section 40a(3) there fore 20% shall be disallowed
and you just hav to report in form 3cd how much is paid in voilation of section 40A(3)
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