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2021 (12) TMI 1192 - AT - Income TaxDisallowance u/s 40A(3) - payment in cash of more than ₹ 20,000/- in a day - HELD THAT - Assessee has not disclosed the fact as to when the consignment reached at the destination and when the deliveries of goods were received by assessee. No such expediencies are disclosed by the assessee that either transporter insisted for cash payment or the assessee was unable to prepare the cheque against such delivery immediately - it is not the case of assessee that the assessee was maintaining the bank account in co-operative Bank and realisation of cheque from their banker take a longer time - assessee in Anupam Tele Services 2014 (2) TMI 30 - GUJARAT HIGH COURT is not applicable on the facts of the present case - the principal company insisted that payment by cheque which was drawn a co-operative bank takes longer time in realization and they insisted for payment - the said case law relates to assessment year 2006-07. The Rule 6DD has been amended in the year 2008 by making significant changes with effect from assessment year 2009-10, which is subject assessment year in the present case. We find one more reason as recorded by ld CIT(A) that during the first round of appeal before the Tribunal, of the assessee took his stand that assessee has not made payment exceeding of ₹ 20,000/- or aggregate of exceed of ₹ 20,000/- in order to attract the provision of section 40A(3) - The assessee instead of substantiating that submission raised a new plea by taking the excuse of alleged conditions No.6 and 17, allegedly printed on back side of bill of transporter. No such copy of bill is produced for our perusal. In aforesaid circumstances, we do not find any justification to interfere with the order of Ld. CIT(A). In the result, the ground of appeal raised by the assessee is dismissed. Disallowance of deduction u/s 80P(2)(a)(iii) - No new facts are required to adjudicate the additional grounds of appeal. The assessee in facts seeking deduction under different clauses of section 80P(2)(a) only. In our view, the assessee has right to raise new claim in additional ground of appeal before the appellate authority as has been held by series of decisions of superior courts. Therefore, the additional grounds of appeal raised by the assessee are admitted. However, considering the fact that the assessee has raised alternative plea for claiming the deduction under different subclause of clause-(a) and sub-section 80P, for the first time before the Tribunal. Therefore, we deem it appropriate to restore the issue back to the file of Ld. CIT(A) who shall examine the alternative plea of assessee and pass the order in accordance with law. CIT(A) would be at liberty to seek the remand report from the Assessing Officer on the alternative claim of assessee. The assessee is also directed to provide complete details and evidence before Ld. CIT(A) as and when called for and not to take any adjournment without any valid reason as the case relates to assessment year 2009-10. In the result the additional ground of appeal is allowed for statistical purpose.
Issues Involved:
1. Disallowance under Section 40A(3) of the Income Tax Act. 2. Disallowance of deduction under Section 80P(2)(a)(iii) of the Income Tax Act. 3. Additional grounds for deduction under Sections 80P(2)(a)(i) and 80P(2)(a)(iv) of the Income Tax Act. Issue-wise Detailed Analysis: 1. Disallowance under Section 40A(3): The assessee, a co-operative society, was disallowed ?1,01,650 under Section 40A(3) for making cash payments exceeding ?20,000 in a single day to transporters. The Tribunal noted that the assessee made payments to Jayalakhmi Transport in cash on various dates, which was against the provisions of Section 40A(3). The assessee argued that the payments were made in cash due to conditions imposed by the transporters, such as demurrage charges and lien on goods if payments were delayed. However, the Tribunal found that the assessee did not provide sufficient evidence to justify the cash payments and upheld the disallowance, noting that the assessee's case did not fall under the exceptions provided by Rule 6DD(j) of the Income Tax Rules, 1962. The Tribunal dismissed the appeal on this ground. 2. Disallowance of Deduction under Section 80P(2)(a)(iii): For the assessment years 2009-10, 2012-13, and 2014-15, the assessee claimed deductions under Section 80P(2)(a)(iii) for income derived from interest on loans given to its members. The Assessing Officer disallowed these claims, stating that the income was not attributable to the marketing of agricultural produce grown by its members. The CIT(A) upheld the disallowance, noting that similar claims were withdrawn by the assessee in previous years. The Tribunal agreed with the CIT(A), stating that the deduction under Section 80P(2)(a)(iii) is specific to income from marketing agricultural produce grown by members, which was not the case here. The Tribunal dismissed the appeals on this ground. 3. Additional Grounds for Deduction under Sections 80P(2)(a)(i) and 80P(2)(a)(iv): The assessee raised additional grounds for claiming deductions under Sections 80P(2)(a)(i) and 80P(2)(a)(iv) for the first time before the Tribunal. The Tribunal admitted these additional grounds, noting that no new facts were required for their adjudication. The Tribunal restored the issue back to the CIT(A) for examination and directed the CIT(A) to seek a remand report from the Assessing Officer if necessary. The assessee was instructed to provide complete details and evidence to the CIT(A). The Tribunal allowed the additional grounds for statistical purposes and directed the CIT(A) to pass an order in accordance with the law. Summary of Judgments: - The appeal regarding the disallowance under Section 40A(3) for the assessment year 2009-10 (ITA No.2198/AHD/2015) was dismissed. - The appeals regarding the disallowance of deduction under Section 80P(2)(a)(iii) for the assessment years 2009-10, 2012-13, and 2014-15 (ITA Nos.2386/AHD/2016, 3278/AHD/2015, and 1764/AHD/2017) were partly allowed. The additional grounds for deductions under Sections 80P(2)(a)(i) and 80P(2)(a)(iv) were restored to the CIT(A) for fresh consideration. Conclusion: The Tribunal upheld the disallowance under Section 40A(3) for cash payments exceeding ?20,000 in a single day. It also upheld the disallowance of deductions under Section 80P(2)(a)(iii) for income not attributable to the marketing of agricultural produce grown by members. However, it admitted additional grounds for deductions under Sections 80P(2)(a)(i) and 80P(2)(a)(iv) and restored these issues to the CIT(A) for fresh consideration.
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