9911796707
TMI Blog2000 (6) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... "That on the facts and in the circumstances of the case, the learned CIT(A) has erred in deleting the addition of Rs. 87,327 made by the Assessing Officer on account of cash payments made in violation of section 40A(3) of the Income-tax Act." The Assessing Officer made the addition of Rs. 87,327 by stating that the assessee made purchases from M/s. Munna Lal Sat Parkash of Shahpur, Muzaffarnagar (UP) in cash. The Assessing Officer discussed the issue at page 2 and made the addition by observing that the assessee had violated the provisions of section 40A(3) of the Act. 3. Before the learned CIT(A), it was claimed that firstly no such purchases were made by the assessee, however, even if any purchases were presumed to be made then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in section 40A(3) was not practicable or would have caused genuine difficulties to the payee. In the instant case, it is clear that both the parties had no bank account at the place of either party. In that view of the matter, the CIT(A) had rightly held that payment is covered under the provisions of Rule 6DD( j ) of the Income-tax Rules, 1962. Further more, this Bench of the Tribunal in the case of Assessing Officer Ward-2-cum New Assessees Ward, Bhatinda v. M/s. Puran Chand Gian Chand, Maur in I.T.A. No. 357 (Asr.)/1993, assessment year 1987-88, vide its order dated 9-2-1999 has held as under : "3. The learned counsel of the appellant pleaded that they have pleaded before the authorities below that no such purchases were made fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned DR becomes irrelevant if one has to interpret section 40A(3) with proper perspective. The learned DR argued that the section was incorporated only to check the unrecorded transaction of the nature mentioned above. This interpretation, to our mind is not correct interpretation because if an expenditure is not genuine that can be taken care under section 37(1) of the Income-tax Act. Under section 37(1), all such expenditure incurred by the appellant-which are not wholly and exclusively or the purposes of business or profession can be disallowed in computing the income chargeable under the head "Profits and gains of business or profession". Section 40A(3) has given an over-riding powers to the Assessing Officer. Under this provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the assessee was not controverted by the learned D.R. Admittedly, the facts of the present case are identical to the facts of the aforesaid case i.e., ITO v. Pawan Kumar Sham Lal, Bhikhi, wherein this Bench of the Tribunal vide its order dated 11-8-2000 observed vide paras 4 and 5 as under: "4. The learned counsel of the assessee, on the other hand, pleaded that they categorically denied to have made any purchases from M/s. Munna Lal Sat Parkash. The learned counsel pleaded that they requested the Assessing Officer to allow them to cross examine the party but the Assessing Officer did not allow them any opportunity to cross examine the party. It was further argued that they took an alternative plea that the business of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Assessing Officer to establish that the assessee has made purchases. If one will look into the copy of account, it is quite clear that the goods have been debited in the name of the party and after considerable time the cash has been credited in the name of the assessee. This gives much force to the alternative argument that the goods were sent, if at all, for sale on commission basis, therefore, there was no justification and logic in making the addition. However, we agree with the learned CIT(A) that once the hotel transaction is lacking confirmation the Assessing Officer has to discharge the onus of collecting the other evidence to establish that the goods were in fact purchased by the assessee. The Assessing Officer has not ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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