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TMI Blog2019 (7) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... . Departmental Representative also did not oppose to the statement given by the assessee. In view of the undertaking which shall be given by the assessee before the Ld. Assessing Officer of not claiming the alleged amount as expenditure in subsequent years, set aside the finding of Ld. CIT(A) and allow the sole ground raised by the assessee and delete the disallowance made u/s 40A(3) -. Appeal of the assessee allowed. - ITA No.658 And 659/Ind/2017 - - - Dated:- 9-7-2019 - Hon'ble Kul Bharat, Judicial Member And Hon'ble Manish Borad, Accountant Member For the Assessee : Shri Ajay Tulsiyan And Ms. Shalini Mehta, CA s For the Revenue : Smt. Ashima Gupta, CIT ORDER PER MANISH BORAD, AM. The above captioned two appeals are filed at the instance of the assessee. Appeals No. 658 659/Ind/2017 for Assessment Years 2012-13 2013-14 are directed against the order of Ld. CIT(Appeals)-III (in short CIT(A) ), Indore dated 27.07.2017 which are arising out of the order u/s 143(3) of the Income Tax Act 1961 (In short the Act ) dated 30.12.2013 and 22.02.2016 framed by DCIT (Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made for the purchase of land in violation of the limits prescribed u/s 40A(3) of the Act which for the relevant assessment year was ₹ 20,000/-. Genuineness of the transaction of purchase of land was not in dispute. Ld. A.O accordingly made disallowance u/s 40A(3) of the Act at ₹ 4,26,060/- and assessed the income u/s 153A r.w.s. 143(3) of the Act at ₹ 4,26,060/- . The assessee preferred appeal before Ld. CIT(A) but could not succeed. 5. Now the assessee is in appeal before the Tribunal. 6. Ld. Counsel for the assessee submitted that the appellant company acquired certain lands during the year under consideration. Out of the total purchases made during the year a piece of land situated at Gram -Bada Bangda Tehsil -Indore (New Tehsil -Hatoad) Zila -Indore M.P. was purchased and got registered on 31.03.2012 for a total consideration of ₹ 17,04,240/- out of which only a nominal amount of ₹ 4,26,060/- was paid in cash whereas the balance amount was paid through banking channel. Complete details and copies of registered sale deeds evidencing the purchase, substantiating the identity of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of ITAT, Jaipur ITA No.625/JP)/14 in case of M/s. Ajmer Food Products Pvt. Ltd, Ajmer vs. JCIT Range-2, Ajmer. 4. Hon ble Punjab Haryana High Court in case of Gurdas Garg Vs. CIT(A) Bathinda (2015) 63 taxmann.com 289. 5. Hon ble Amritsar ITAT in case of Rakesh Kumar vs. ACIT ITA No.102(Asr)/2014. 6. Hon ble Co-ordinate Bench, Chandigarh ITA No. 115/chd/2013 others in case of M/s. Dhuri Wine Vs. DCIT. 7. Hon ble Rajaqsthan High Court in case of M/s ACE India Abodes Limited (DB Appeal No.45/2012 dated 11.09.2017). 8. Hon ble ITAT Jaipur Bench in case of M/s. A.K. Daga Royal Arts Vs. ITO ITA No.1065/Jp/2016 dated 15.05.2018. 9. Hon ble Chandigarh ITAT Division Bench A in the case of Shri Jai Tej Singh vs ITO Ward 6(2) Mohali ITA No.750/Chd/2017 dated 17.07.2018. 8. Per contra Ld. Departmental Representative vehemently argued and supported the orders of lower authorities. 9. We have heard rival contentions and perused the records placed before us and carefully gone through the judgment referred by Ld. Counsel for the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (3A) of section 40A where a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft*, exceeds twenty thousand rupees in the cases and circumstances specified hereunder, namely:- (a) Where the payment is made to- i. The Reserve Bank of India or any banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949); ii. The State Bank of India or any subsidiary bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959); iii. Any co-operative bank or land mortgage bank; iv. Any primary agricultural credit society or any primary credit society as defined under section 56 of the Banking Regulation Act, 1949 (10 of 1949); v. The Life Insurance Corporation of India established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956); (b) Where the payment is made to the Government and, under the rules framed by it, such payment is required to be made in legal tender; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r does not exceed fifty thousand rupees; (i) Where the payment is made by an assessee by way of salary to his employee after deducting the income-tax from salary in accordance with the provisions of section 192 of the At, and when such employee- i. Is temporarily posted for a continuous period of fifteen days or more in a place other than his normal place of duty or on a ship; and ii. Does not maintain any account in any bank at such place or ship; (j) Where the payment was required to be made on a day on which the banks were closed either on account of holiday or strike; (k) Where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person; (l) Where the payment is made by an authorised dealer or a money changer against purchase of foreign currency or travellers cheques in the normal course of his business. Explanation-For the purposes of this clause, the expressions authorised dealer or money changer means a person authorised as an authorised dealer or a money changer to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We may note that we are not of the view that obtaining a cheque or a bank draft is hazardous and cumbersome procedure. Suffice it to say that in the present case, the Tribunal was of the opinion that the payee insisted for cash payment as observed by the learned CIT(A) and further that the transactions were found to be genuine. We may also note that in Attar Singh Gurmukh Singh Vs. ITO (1991) 97 CTR (SC) 251 : (1991) 191 ITR 667 (SC), it is pointed out that terms of s. 40A(3) are not absolute. Consideration of business expediency and other relevant factors are not excluded. Genuine and bona fide transactions are not taken out of the sweep of the section. It is up to the assessee to furnish to the satisfaction of the A.O. the circumstances under which payment, in the manner prescribed in s. 40A(3), was not practicable or would have caused genuine difficulty to the payee. It is also open to the assessee to identify the person who has received cash payment. 15. Ld. Counsel for the assessee has also relied upon judgment of Hon'ble Allahabad High Court in the case of CIT Vs. Choudhary Company (supra). It is stated by the Ld. Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Representative also did not oppose to the statement given by Ld. Counsel for the assessee. 12. We therefore in the given facts and circumstances of the case and respectfully following the decision of the Coordinate Bench and other judgments referred and relied by Ld. Counsel for the assessee and also in view of the undertaking which shall be given by the assessee before the Ld. Assessing Officer of not claiming the alleged amount as expenditure in subsequent years, set aside the finding of Ld. CIT(A) and allow the sole ground raised by the assessee and delete the disallowance made u/s 40A(3) of the Act at ₹ 4,26,060/-. Appeal of the assessee for Assessment Year 2012-13 vide Appeal No.658/Ind/2017 stands allowed. 13. Apropos Appeal No.659/Ind/2017 for Assessment Year 2013-14 of the assessee, the facts and issue remains the same except for the amount of disallowance u/s 40A(3) of the Act at ₹ 18,50,000/- Since we have already adjudicated the issue in the preceding paras our decision shall apply mutandis mutandis on the grounds raised for the Assessment Year 2013-14. We accordingly set aside the finding of Ld. CIT(A) and allow the sole g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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