Can amounts actually paid during the year be disallowed u/s 40(a)(ia) of the Income Tax Act?

Last updated: 23 September 2021

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This Income Tax Appellate Tribunal case examines whether amounts paid by a business can be disallowed under Section 40(a)(ia) of the Income Tax Act. The Assessing Officer disallowed certain expenses, including cash payments exceeding Rs. 20,000 where vouchers were not produced, and demurrage charges for which full details were not provided. The assessee argued that cash payments were necessary due to remote construction sites lacking banking facilities. The Tribunal's decision, detailed in the full judgement, clarifies the application of this section.

Court :
ITAT Hyderabad

Brief :
This appeal filed by the Assessee is directed against CIT (A) – 6, Hyderabad’s order dated 10/02/2017 involving proceedings u/s 143(3) of the Income- Tax Act, 1961; in short “the Act”, on the following grounds of appeal

Citation :
ITA No. 837/H/2017

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1 Year PLAN - Rs.~~1999~~

1799

(Excl. of GST ₹323)

2 Years PLAN - Rs.~~3499~~

3149

(Excl. of GST ₹566)

BEST VALUE

3 Years PLAN - Rs.~~4999~~

4499

(Excl. of GST ₹809)

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Attached File : 1442821_4471_1631778654_837_h_2017_durga_crane_services_hyd.pdf

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Judgement posted by

Poojitha Raam Vinay

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I simplify complex income tax, TDS, banking, and investment updates into practical insights for taxpayers, salaried professionals, pensioners, and senior citizens. I regularly write on ITR filing, tax compliance, savings schemes, and the latest financial rule changes in India.

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