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TMI Blog2015 (2) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... 0A(3) - cash payment made on account of freight and lorry hire charges in excess of ₹ 20,000/- in a day - Held that:- Merely because while deducting the tax at source, the assessee had deducted the tax under section 194C of the Act, does not establish the case of the Revenue, especially, in the circumstances where the assessee had claimed that the deduction of tax was made under a wrong section. The payment made for hired vehicles through commission agents was though paid in cash exceeding ₹ 20,000/- falls within the exception provided in clause (k) to the Rule 6DD of the Rules and we find no merit in the orders of authorities below in disallowing the said payment as not allowable under section 40A(3) of the Act. Further in the statement recorded, the Director of assessee company had stated that advance lorry charges were paid in cash to parties. No query was raised as to the persons to whom payments are being made. In the said circumstances, we find no merit in orders of authorities below. Reversing the order of CIT(A), we direct the Assessing Officer to delete the disallowance made under section 40A(3) of the Act at ₹ 64,60,549/- - Decided in favour of assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orry receipts shows that the lorries were taken on hire yet it was not established by the assessee that the said lorries were taken on hire from M/s. Sarvodaya Road Lines. The assessee was asked to produce the said party. However, the reliance was placed on the evidences submitted in support of the transactions. The entire transactions with the said party was considered as non-genuine and sum of ₹ 3,12,300/- was added to the income of the assessee. The CIT(A) upheld the order of Assessing Officer in view of the non-submission of details / evidence by the assessee. 5. The assessee is in appeal against the said addition of ₹ 3,12,300/-. It was pointed by the learned Authorized Representative for the assessee that the total transactions with the said party was of ₹ 3,12,300/-, out of which, a sum of ₹ 72,418/- was outstanding. The learned Authorized Representative for the assessee pointed out that though the payments were made in cash, tax was deducted at source out of such payments. It was further stressed by the learned Authorized Representative for the assessee that the primary evidence of the transaction was provided by the assessee but since the party w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een paid and on 03.12.2008, there were lorry charges of ₹ 23,000/- against which, the cash of ₹ 17,000/- was paid on 23.03.2009. There were lorry charges of ₹ 20,000/- against which the cash of ₹ 15,000/- and thereafter cash of ₹ 19,935/- was paid on 25.03.2009. The account of the said party was debited with TDS of ₹ 433/- and ₹ 206/- and balance of ₹ 72,148/- was shown as due from the assessee. The assessee however, furnished on record the copy of the account of the said party for the succeeding year, in which the said credit of ₹ 72,148/- has been discharged by making cash payment. The assessee had furnished the primary evidence of the transaction but had failed to furnish the confirmation from the said party nor could the said party be produced for cross-examination. The expenditure incurred by the assessee was ₹ 3,12,300/- and though the same has been discharged by making cash payment on different dates, we find merit in the plea of the assessee where, the primary evidence of incurring the expenditure has been filed by the assessee i.e. the lorry receipt numbers, name of consignor, consignee, place of discharge, vehicl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Rules was also rejected and addition of ₹ 64,60,549/- was made in the hands of the assessee. 10. The CIT(A) upheld the addition made by the Assessing Officer rejecting the claim of assessee both on account of payments being made to commission agents and the application of Rule 6DD of IT rules. 11. The assessee is in appeal against the above addition confirmed by the CIT(A). 12. The learned Authorized Representative for the assessee pointed out that in the Notes to accounts annexed to Form 3CD, it was declared that the person to whom the payments were made were commission agents and consequently clause (k) to Rule 6DD of the Rules was applicable. 13. The learned Departmental Representative for the Revenue pointed out that the amendment in section 40A(3) that more than ₹ 20,000/- in cash in a day could not be made and when confronted with the amended provisions of the Act, the assessee changes stand that the payments were being made to commission agents and provisions of section 40A(3) of the Act were not applicable. Further, reliance was placed on the query raised and the statement recorded during the course of survey of the director of the assessee company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided the trucks / lorries to the assessee for transport of its goods and even tax was deducted at source out of such payment being made to the commission agent. The issue arising in the present appeal is whether the provisions of section 40A(3) of the Act are attracted in the case justifying the disallowance made by the Assessing Officer and upheld by the CIT(A). 18. The assessee had furnished the audited accounts for the year under consideration along with the audit report of the auditor which is placed at pages 1 to 68 of the Paper Book. The auditor in the audit report in Form No.3CD had declared the nature of business carried on by the assessee to be the goods transport contractor and commission agent. It was further pointed out by the learned Authorized Representative for the assessee that the auditor had also given a certificate that no amount was inadmissible under section 40A(3) of the Act read with rule 6DD of the Income Tax Rules. The plea of the assessee before us was that the payments to the said persons were made on account of commission for booking the trucks. Further, the said persons do not own the trucks but were the commission agents, who in turn booked the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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