OM AUTO FINANCE CONSULT,PALANPUR vs. THE ITO, WARD-1, PALANPUR

ITA 1781/AHD/2025Status: DisposedITAT Ahmedabad18 September 2026AY 2017-186 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 40A(3) applies only to expenditure incurred by the assessee. Since the assessee merely facilitated the flow of funds and did not incur these amounts as expenditure, the disallowance was incorrect.

What were the facts?

The assessee, a finance facilitator, received loan amounts in its bank account from finance companies and disbursed them to borrowers in cash. The Assessing Officer disallowed these cash disbursements under Section 40A(3) as expenditure.

What were the issues?

Whether cash payments made by the assessee, acting as a conduit for loan disbursements, constitute expenditure attracting disallowance under Section 40A(3) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

For Appellant: Shri Dhrunal Bhatt, AR
For Respondent: Shri Abirama Karthikeyan, CIT-DR
Hearing: 15.07.2026Pronounced: 18.09.2026

PER DR. B.R.R. KUMAR, VICE-PRESIDENT:

-

This appeal has been filed by the assessee against the order dated 13.08.2025 passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2017-18. 2. The assessee has raised following grounds of appeal:- “1. In law and on the facts and in the circumstances in the case of the appellant, the order u/s 250 of the Act passed by the Ld. CIT (A) is arbitrary, erroneous, contrary to the provisions of law and on facts.

2.

In law and in the facts and circumstances of the A

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 40A(3)

All 3,278 judgments and leading authorities on Section 40A(3) →

Recent GST High Court judgments

Search GST case law →