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TMI Blog2018 (12) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... ively for the purpose of the business. The party to whom the payment was made in cash was a genuine party. In such circumstances we note that the Hon’ble ITAT, Ahmadabad in the case of M/s. Shiv Krupa Tin Containers v/s ITO [2016 (9) TMI 445 - ITAT AHMEDABAD]allowed the deduction to the assessee - disallowances u/s 40A(3) of the Act, cannot be made if the genuineness of the transaction has not been doubted by the authorities below - we direct the AO to delete the addition made u/s 40A(3) - Decided in favour of assessee. - ITA Nos.2043/AHD/2015 - - - Dated:- 18-9-2018 - Shri Rajpal Yadav, Judicial Member And Shri Waseem Ahmed, Accountant Member For the Assessee : Shri U.S. Bhati Abhimanyu Singh Bhati A.R. For the Revenue : S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te and/or rescind all or any of the Ground of Appeals on or before the final hearing, if necessary so arises. 3. At the outset the Ld. Counsel for the assessee fairly submitted that he has been instructed by the assessee not to press ground no.2 and 3. Therefore, we dismiss the same as not pressed. 4. The issue raised in ground no.4 is regarding the initiation of penalty proceedings u/s. 271(1)(c) of the Act. The penalty proceedings are separate with the quantum proceeding. Therefore, we note that the issue raised by the assessee is premature and does not require any separate adjudication. 5. The issue raised in ground no.5 is general in nature and therefore the same does not required any separate adjudication. Accordingly, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the section. The appellant did not submit any reply during the course of assessment proceedings and the AO accordingly disallowed the amount under the relevant section. During the course of appellate proceedings, the appellant has submitted that adequate opportunity was not given for furnishing the explanation. It has been explained that the payment was required to be made for reimbursement of expenses of freight and Port charges to the agent who had made payment to the Airlines and Port authorities. Such reimbursement was required under the arrangement for the business of the appellant for exporting the goods. The appellant has placed reliance on the Rule 6DD(g) and 6DD(k). On a careful consideration of entire facts of the case, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Rule 6DD(k) is regarding the payment made to the agent who was required to make payment in cash for goods or services on the behalf of the taxpayer. Therefore, none of these circumstances mentioned in Rule 6DD are applicable in the case of the appellant. There is no requirement of cash payment of air freight and there is no evidence on record by the appellant to show that banking services are not available near his place of business. In view of the above discussion I am of the considered opinion that there was no reasonable cause with the appellant for making the payment is in cash. The AO has rightly invoked the provisions of section 40A(3) of the I.T. Act. The disallowance made is accordingly upheld. 9. Being aggrieved by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xclusively for the purpose of the business. The party to whom the payment was made in cash was a genuine party. In such circumstances we note that the Hon ble ITAT, Ahmadabad in the case of M/s. Shiv Krupa Tin Containers v/s ITO in ITA No.136/Ahd/2016 allowed the deduction to the assessee vide order dated 09/06/2016. The relevant extract of the order is reproduced below: 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The issue in the present ground is with respect to disallowance u/s.40(A)(3) of the Act. It is an undisputed fact that assessee has made cash payments for expense and these payments have been made to Electricity Company for the supply ..... X X X X Extracts X X X X X X X X Extracts X X X X
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