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TMI Blog2018 (3) TMI 1749X X X X Extracts X X X X X X X X Extracts X X X X ..... 243/Chd/2016 - - - Dated:- 27-3-2018 - MS. DIVA SINGH, JUDICIAL MEMBER For the Appellant : Shri Tej Mohan Singh For the Respondent : Shri Kiran Deshpande, Sr.DR ORDER PER DIVA SINGH, J.M. The present appeal has been filed by the assessee assailing the correctness of the order dated 14.10.2016 of CIT-(A)-1, Chandigarh pertaining to 2012-13 assessment year on the following grounds : 1. That the Learned Commissioner of Income Tax(A)-l has filed to appreciate the facts and circumstances of the case and has thereby erred in Confirming addition of ₹ 24,77,000/- u/s 40(A)(3) of the Income Tax Act, 1961. 2. That the order of the Learned Commissioner of Income Tax(A)-l is devoid of any merits as there was no violation of the provisions of section 40(A)(3) of the Income Tax Act, 1961. There was a mistake on the part of the account of the company in submitting the copy of account who prepared the same in a summarized manner. The books of accounts and vouchers produced before the Assessing Officer recorded the correct facts and figures and were contrary to the earlier wrong statement furnished by the accountant. 3. There being no violation of the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products and has shown its income from sale of RCC pipes, hiring charges of generator set and fabrication work. The assessee's reply dated 22.12.2014 is found extracted from page 2 onwards in the assessment order. 5.1 Considering the said reply, the AO confronted the assessee of the specific details of payments made in cash in contravention of Section 40A(3) in the copy of account of Chandigarh Spun Pipe Pvt. Ltd. The following extract from the assessment order page 11 is reproduced hereunder : Sr.no. Date Cash Amount 1. 09.04.2011 Cash 30,000/- 2. 15.4.2011 cash 30,000/- 3. 22.04.2011 cash 25000/- 4. 25.04.2014 cash 30,000/- 5. 27.04,2011 cash 2,70,000/- 6 02.05,2011 cash 50,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... committed by the Accountant and the copy of the assessee's account in the books of M/s Chandigarh Spun Pipe alongwith the affidavit of the Accountant were relied upon. The ld. AR in the course of his arguments has primarily relied upon this reply. A perusal of the assessment order shows that the said reply supported by an affidavit was not accepted in view of the fact that there were discrepancies in the averments of the assessee. The details of the cash payments relatable to Chandigarh Spun Pipe have been extracted from pages 3 to 11 of the assessment order and has been reproduced in the earlier part of this order. When the same are read alongwith the explanation of the assessee submitted that there were typing mistakes which arguments have been extracted in pages 9 to 27 of the assessment order, the AO in very speaking terms from pages 27 to 36 has demolished the arguments of the assessee on facts. As an illustration, the following chart at pages 31- 32 of the assessment order demonstrates that as per the assessee's original claim on 09.04.2011 by voucher Nos. 9, ₹ 30,000/- was paid and in the corrected version, the amount of ₹ 18,500/- is shown to have been p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which vouchers no, in the copy of account submitted on ethnetr y has been split-up in the changed 23.12.2014 of account of Chandigarh Spun Pipe Co. submitted on 20.02.2015 of the CIT(A) upholding addition made in the assessment order upheld in the present proceedings is reproduced hereunder : 5. On going through the entire set of facts of the case, the arguments put forth by the Assessing Officer and that of the appellant, I am of the opinion that addition has been correctly made by the Assessing Officer. The appellant produced one set of copy of accounts before the Assessing Officer and on being pointed out the defects which could lead to an addition u/s 40(A)(3) submitted a second set of accounts. The arguments put forth by the Assessing Officer have considerable merits. It would be worthwhile to read through the verbose arguments of the Assessing Officer and hit the crux of the matter and to attempt a summary of Assessing Officer's arguments as below: (i) When the original and the revised copy of accounts are compared than it is observed that only the daily cash payments above ₹ 20,000/- in the original copy have been split in the revised copy to make sure that d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thwhile to examine another entry to illustrate the fact that it is not a simple case of consolidation of entries by mistake. It is rather a case of splitting of entries which has been willfully done to avoid the provisions of section 40A(3) of the Act. The original entry on 27.04.2011 is cash payment of ₹ 2,70,000/- and on 02.05.2011 07.05.2011 are cash payments of ₹ 50.000/-. In the revised account statement entry corresponding to 27.04.2011 has been split into 15 entries of denominations smaller than ₹ 20,000/- from 27.04.2011 to 13.05.2011 i.e. over a span of 17 days. But in between these were two more so called consolidated entries of ₹ 50,000/- each on 02.05.2011 and 07.05.2011 which have been split and moved to 14.05.2011 to17.05.2011 and 18.05.2011 to 20.05.2011 respectively. This argument of the appellant that the accountant consolidated these entries cannot be believed. If any prudent man would add up smaller figures to make a consolidated figure of ₹ 2,70,QOO/- then the next consolidated entry should appeared after the last unconsolidated entry which was part of the first consolidated entry. For example, if unconsolidated entries are i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Rs. 19,500 12 Rs. 2,15,000 11.05.2011 - Rs. 16,500 13 Rs, 2,31,500 12.05,2011 - Rs. 19,500 14 Rs. 2,51,000 13.05.2011 - Rs. 19,000 15 Rs. 2,70,000 14.05.2011 - Rs. 14,500 16 Rs. 14,500 16.05,2011 - Rs. 19,500 17 Rs. 34,000 17.05,2011 - Rs. 16,000 18 Rs. 50,000 18.05,201 1 - Rs. 18,000 19 Rs. 18,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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