9911796707
TMI Blog2018 (3) TMI 1459X X X X Extracts X X X X X X X X Extracts X X X X ..... ") dated 29.12.2010 for the Assessment Year 2008-09. 2. The Ground Nos. 1 & 4 of the Revised Grounds of Appeal filed by the assessee is general in nature and does not require any specific adjudication. 3. The Ground No. 2 of the Revised Grounds of Appeal was stated to be not pressed by the ld AR at the time of hearing before us for which necessary endorsement has been made by him in our file. Accordingly, the Ground No. 2 is dismissed as not pressed. 4. The only issue to be decided in this appeal is as to whether the ld CITA was justified in upholding the disallowance made u/s 40A(3) of the Act in the sum of Rs. 16,12,738/- in the facts and circumstances of the case. 5. The brief facts of this issue is that the assessee is a partnership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nse , the assessee produced all the purchase bills, cash memos and the money receipts obtained from the aforesaid parties to prove the genuineness of the transactions carried out by the assessee. The assessee replied that the terms of section 40A(3) of the Act are not absolute. Consideration of business expediency and other relevant factors are not excluded. Genuine and bonafide transactions are taken out of the sweep of the section. It is open to the assessee to furnish to the satisfaction of the ld AO the circumstances under which the payment in the manner prescribed in section 40A(3) was not practicable or would have caused genuine difficulty to the payee. The ld AO however observed that the assessee had not proved the pressing circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that the purchases are made at one go but the assessee had tried to split the same. The ld CITA deleted the payment of Rs. 10,371/- made by cheque and sustained the other disallowance made u/s 40A(3) of the Act for the very same reasoning given in the assessment order. Aggrieved, the assessee is in appeal before us on the following ground:- 3. For that the Assessing Officer erred in 'Adding back' Rs. 16,12,738/- u/s 40A(3) of the Income Tax Act, 1961 inasmuch as the Appellant produced all supporting in this regard i.e. Bills, Cash Memos, Money receipts, etc. and also narrated the circumstanced under which these payments had to be made. In fact since all these transactions are genuine and free from vice of any device of evasion of Tax, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Rs. 2,500/- , otherwise than by a crossed cheque drawn on a bank or a crossed bank draft. This provision will apply in respect of payments made after a date to be notified by Government, being a date not later than 31-3- 1969. This provision is designed to counter evasion of tax through claims for expenditure shown to have been incurred in cash with a view to frustrating proper investigation by the Department as to the identity of the payee and the reasonableness of the payment. He argued that on genuineness of the transactions and for accounting of the subject mentioned payments in the hands of the payees, there is absolutely no dispute. He further argued that the assessee had declared gross profit of 21.20% and net profit rate of 16.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he businessman and not from the view point of the revenue. We find in the instant case , the genuinity of the purchase transactions in cash are not disputed by the revenue. We find that in the case laws relied upon by the ld AR , in those cases, the pressing circumstances under which the payments were sought to be made in cash were proved. But in the instant case, the same is not proved by the assessee. We find that the assessee had produced all the bills, cash memos and money receipts of the payees before the lower authorities. Though the assessee had not established the circumstances which warranted it to pay the suppliers in cash by any cogent evidence, it had filed an affidavit duly notarized and signed by the partner of the assessee fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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