Case Law Analysis
|Income Tax Appellate Tribunal
Section 40A(3) IT Act | Cash Payments Below Threshold Cannot Be Disallowed When Books Are Audited and No Violation Proven : ITAT Bangalore
The ITAT Bangalore ruled that disallowance under Section 40A(3) is invalid when the assessee’s audited books show no excess cash payments and the tax officer fails to substantiate a violation. This reinforces that procedural fairness and evidentiary burden apply even in remote-sector businesses, protecting compliant taxpayers from arbitrary profit estimations.