ITAT Deletes ₹6.55 Lakh Disallowance u/s 40A(3) as Payments Were Related to Capital Assets, not Revenue Expenses [Read Order]
Since section 40A(3) applies only to revenue expenditures and the amendment covering capital asset payments came into effect from assessment year 2018–19, the disallowance for the assessment year 2015–16 was not sustainable
The Cochin Bench of Income Tax Appellate Tribunal (ITAT) deleted a disallowance of ₹6.55 lakh under section 40A(3) of Income Tax Act,1961, holding that the cash payments were made for capital assets and not revenue expenses. Julius Ruben,appellant-assessee, ran a proprietary business called Rocky Transport and Crane Services. For the assessment year 2015-16, he filed…
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