9911796707
TMI Blog2011 (4) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... e addition of Rs.8,84,531/- on account of disallowance under Section 40 A(3) of the Income Tax Act, 1961. Learned counsel for the appellant drew our attention to the reasons given by the Assessing Officer as well as by the Commissioner of Income Tax (Appeals) Ranchi in the order dated 31.3.1997 and the appellate order passed by the Commissioner of Income Tax dated 15.12.1997 and it has been pointed out that the assessee was found to have paid amount in cash of Rs.10,000/- on various occasions as entered in the books of account for the relevant year. The Assessing Officer observed that all those payments have been made to defeat the provision of Section 40A(3) of the Income Tax Act, 1961 and therefore, no deduction was allowable. How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penal affect. Learned counsel for the assessee vehemently submitted that the expenditure otherwise was allowable expenditure under Section 37 of the Act, 1961 and because of Section 40A(3) of the Income Tax Act, 1961 only such expenditure have been disallowed which in fact amount to put a penalty because of the lapse or inadvertence on the part of the assessee and he could have explained the facts if it would have been brought to the notice of the assessee. Learned counsel for the assessee further submitted that a Division Bench of this Court while interpreting Section 271-D and 269-SS of the Income Tax Act, 1961 dealt with issue of levy of penalty and while doing so, object for making such provision has been considered. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided that where the assessee pays a sum exceeding Rs.10000/- otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft, such expenditure shall not be allowed as a deduction. It no where says that the amount, if paid, in cash exceeding Rs.10,000/- "in a day" then this will be expenditure for which deduction shall not be allowed. Looking into details of large number of entries of cash payment and that too of a particular sum of Rs.10,000/- on several occasions to some persons which are given in the order of Assessment, we are of the opinion that the assessee has shown cash payment to the persons in large number and that is in violation to Sub-Section 3 of Section 40-A. The further contention of the learned counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and a specific provision was made by Section 273- B and it was inserted by Taxation Laws (Amendment and Miscellaneous Provisions)Act, 1986 which provides that no penalty shall be imposed if there was a reasonable cause for said failure. Obviously, it has a penal consequence under Section 271-D. Here in this case, the language of section is clear, which only says that the benefit is available to the assessee under specific provision of law shall not be available and it cannot be considered as penalty merely because one has to incur some loss due to the imposition of tax that will not make that loss as penal in nature. Penalty cannot be equated with disallowance of tax by statutory provision. In view of the above reasons, we are of the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
