9911796707
TMI Blog2015 (4) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... precedent to invoke foregoing section are not satisfied in Appellant's case. 2. CIT(A) further erred in this connection holding that:- a) there is no material to show that AO propose to examine issue by applying provisions of section 40A(3); b) AO had not applied his mind to applicability of section 40A(3); c) assessment order dated 17.12.2009 was not passed after due application of mind by AO; d) assessment record does not contain written reply of Appellant in response to section 154 notice dated 31.05.2010; and e) view taken by AO does not constitute one possible view. 3. Appellant craves leave to add to and/or amend and/or delete and/or modify and /or alter the aforesaid revised/modified grounds of appeal as and when the occasion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62439 Jagjeet Goods Carriers Cash 29370 Guruteg Bahadur Transport Co. Cash 18970 Sai Transport Corporation Cash 62499 Khalsa Roadways Cash 149337 Bombay Gujrat Transport Service Cash 162144 New Shukla Freight Carriers Cash 60774 Charu Transport Company Cash 27170 Total 5002427 As mentioned in the assessment order, the AO has verified the bills and vouchers relating to the transport expenses which were voluminous in nature. After detail scrutiny and verification, he noted that some of the transport expenses are not fully supported with bills and vouchers. Accordingly, he made an ad hoc disallowance of Rs. 1,25,000/- All these facts have been stated at page 2 of the assessment order. Finally the assessment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diesel, food etc. It was also submitted that the legal position of section 40A(3) as it stood the A.Y. 2007-08 was that, if the payment of a cash is less than 20,000/-, then no disallowance is called for. The aggregate payment of Rs. 20,000/- in a day has been brought in the statute w.e.f. 01.04.2009, i.e. A.Y. 2009-10 and for the prior assessment years, if the payment at a time is less than 20,000/- then it was not a breach of the provision of section 40A(3). Besides this various legal submissions on revisionary jurisdiction and scope of section 263 was made. Another important factor which was brought to the notice of the Ld. CIT(A) that the AO on same reason had initiated the proceedings u/s 154, in response t o which the assessee has fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of the Act to the aforesaid expenditure of Rs. 50,02,427/- after giving opportunity of hearing to the assessee. 5. Before us, learned counsel for the assessee submitted that during the course of the assessment proceedings, the assessee had furnished the entire party-wise details of transport charges along with the original bills which is evident from letter dated 23.10.2009 filed before the AO during the course of the assessment proceedings. [copy of which is appearing at page 37 and 38 of the paper book]. Besides this, the assessee had also filed the details regarding each and every payment to show that none of the payments have exceeded sum of Rs. 20,000/- at a time. [The details in this regard are appearing at pages 41 and 42 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT should be quashed. 6. On the other hand Ld. DR strongly relied upon the order of the Ld. CIT and submitted that AO has not made any specific inquiry or raised a query regarding applicability of section 40A(3), which is apparent when the payments have been made in cash. The Ld. CIT has only set aside the assessment order for examination only and therefore, there is no error in the order of the CIT. In support of his contention, he relied upon the decision of Kerala High Court in the case of P.V. Sreenijin Vs. CIT reported (2014) 47 taxman.com 61, wherein it has been held that where the entire material available with the AO has not been considered and certain expenditure has been allowed in excess, then the CIT has a jurisdiction u/s 263 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce should have been made excess by applying different provision, unless there is a categorical finding by the CIT that the view taken by the assessing officer or his opinion is unsustainable in law. This has to be demonstrated from the facts and material on record by the CIT. Here in this case, the Ld. CIT has not pointed out that there is any actual violation of section 40A(3) as per the law prevalent in the A.Y. 2007-08. Prior to A.Y. 2009-10, section 40A(3) provided that, where the assessee incurs any expenditure in respect of which payment is made for sum exceeding Rs. 20,000/-, then no deduction shall be allowed. The statute did not envisaged that the aggregate amount of payments made to a person on a day should exceed Rs. 20,000/-. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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