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TMI Blog2012 (7) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... een placed before the lower authorities and even before us in support of contents of the affidavits - There is nothing to suggest that the relevant material has not been considered by the lower authorities - against assessee. - ITA No.3/D/2011 - - - Dated:- 8-6-2012 - SHRI U.B.S. BEDI, SHRI A.N. PAHUJA, JJ. Assessee by S/Shri Ani l Jain Rishab Jain, ARs. Revenue by Shri B.R.R. Kumar, DR O R D E R A.N.Pahuja:- This appeal filed on 03.01.2011 by the assessee against an order dated 15.11.2010 of the CIT(A)-XVII, New Delhi, raises the following grounds:- 1. The ld. CIT(A) has erred in confirming the order of the Assessing Officer by confirming the addition of Rs. 57,39,886/- being 20% of contract payments of Rs. 2,86,99,431/- u/s 40A(3). Out of the said addition the credit of Rs.40 lakhs has been allowed by the AO out of the surrendered income and the net addition of Rs. 17,39,886/- has been made. 2. The ld. CIT(A) has erred in holding that the AO has considered the entire seized material while making the addition including Annexure A-1 seized from 51-A, Johri Farm, Noor Nagar, Okhla, New Delhi specifically referred in the submissions. 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst their name. Thereafter, funds were released over the next few days. The assessee did not make any lump sum payments to Its labour contractors in one go and only small amounts i.e. less than Rs. 20000/ each were paid to them over a period of time. Moreover, TDS on these payments was deducted and paid into the government account in time, the assessee pointed out. The assessee also enclosed copies of ledger a/c and affidavits from some of the parties as a sample to the effect that no cash payments exceeding Rs. 20000/- each at one time have ever been made to them during the year. However, the AO did not accept the submissions of the assessee and concluded as under:- The submission of the assessee is considered. It is noticed that to bypass the provisions of section 40A(3), the assessee has divided the above payments below Rs. 20,000/- claiming it to be made on different dates. Few examples of such bifurcation are given as under: i) Page 22 of Annexure D-8 (or page 148 of Annexure D-27) indicates that payment of Rs. l,57,000/- .has been made to Jumerati on 10.06.06. The above payment while recording in regular books of accounts has been recorded as under: Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above payment has been entered on different dates. From the above examples, it can very well be seen that the payments made in single transaction to a particular person has been divided into multiple entries while recording the same in regular books of accounts. As the registers were found during the course of survey, these are primary evidence and are more reliable. The submissions made subsequently are only afterthoughts to give them the genuine colour. When the department is in possession of primary evidence, heavy reliance is to be placed on them. The subsequent submission cannot reduce and weaken the evidentiary value of primary documents. As discussed above, the above registers clearly give the details of payments made in cash exceeding Rs. 20000/-, thus, there is the clear-cut violation of the provisions of section 40A(3). Section 40A(3), relevant to assessment year under consideration reads as under: (3) Where the assessee incurs any expenditure in respect of which payment is made, after such date (not being later than the 31st day of March, 1969 as may be specified in this behalf by the Central Government by notification in the Official Gazette, in a sum exceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance. This payment was made on 08.06.2006. Similarly, cash payment of Rs. 1,16,000/- was made to Mr. P. K. Suraj on 12.05.2006, Rs. 1,16,400/- to Mr. Ramzan Ali on 11.12.2006 and Rs.1,21,700/- to Ainul on 16.01.2007. All these payments were made in single transaction as cash of that amount has been debited from the cash balance. The submission of Ld. AR are that these figures are aggregate of the cash payments is not supported by the evidence available on the record. Thus, it is clear from the above discussion that payment in cash were made in violation of section 40A(3) of the I.T. Act, 1961. Therefore, the disallowance u/s 40A(3) comes to Rs.57,39,886/-. Since, the appellant company had surrendered Rs.40 lakh during survey on account of discrepancies in impounded material, the AO allowed benefit of the same and added balance amount of Rs.17,39,886/- only. Considering the facts and circumstances of the case in its totality, I hold that the AO was justified in making the addition. Therefore, the addition made by the AO is confirmed. These grounds of appeal are rejected. 4. The assessee is now in appeal before us against the aforesaid findings of the ld. CIT(A).The ld.AR on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar in which the payment was so made: Provided further that no disallowance under this sub-section shall be made where any payment in a sum exceeding twenty thousand rupees is made otherwise than by an account payee cheque drawn on a bank or account payee bank draft , in such cases and under such circumstances as may be prescribed, having regard to the nature and extent of banking facilities available, considerations of business expediency and other relevant factors. 6.1 There is no dispute that the case of the assessee does not fall within any of the exception provided in rule 6DD of the IT Rules,1962 nor the ld. AR on behalf of the assessee made any such claim before us. Only plea of the ld. AR is that affidavits furnished by the assessee of six persons placed at page 7 to 12 of the paper book and certain documents were not considered by the ld. CIT(A). Indisputably, in this case a survey was conducted in the premises of the assessee on 27.2.2007,when certain impounded documents revealed cash payments exceeding Rs. 20,000/- each. On the basis of material found during the survey assessee surrendered undisclosed income of Rs. 3 crores. The impounded documents revealed cash p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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