An assessee has made the purchases amounting to more than Rs. 20,000 in A.yr 2011-12, but when assessee made the payment, due to insufficient balance the cheque was dishonored. The seller insisted for cash payment & assessee made the payment accordingly, now ITO has added back the amount to the current year profits.
Is there any way to avoid the addition back under sec. 40A (3) ??
TOTAL PUCHASE WAS RS 25,65,000/- during the year.
CAsh payment was made for Rs 4,65,000/- for a particular bill dated 12.08.2010
ITO has added back entire Rs 4,65,000/-
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