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TMI Blog2019 (7) TMI 928X X X X Extracts X X X X X X X X Extracts X X X X ..... tion took place only on 07/03/2009 and not on 02/03/2009. Therefore, we are inclined to accept the findings of ld. CIT(A) and the order of CIT(A) is upheld dismissing the grounds raised by the revenue. - Decided in favour of assessee. - ITA No. 2401Hyd/2018 - - - Dated:- 12-6-2019 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER For The Revenue : Shri Nilanjan Dey For The Assessee : Shri K.A. Sai Prasad ORDER PER S. RIFAUR RAHMAN, AM: This appeal filed by the Revenue is directed against the order of CIT(A), Kurnool, dated, 05/10/2018 for AY 2009-10. 2. Brief facts of the case are, the assessee, an individual filed his return of income for the AY 2009-10 admitting a total income of ₹ 3,51,004/-. Subsequently, the case was selected for scrutiny and scrutiny assessment was completed u/s 143(3) of the Income-tax Act, 1961 ( in short the Act ) on 30/08/2011 by determining the assessee s total income at ₹ 3,91,004/-. 2.1 Subsequently, the Commissioner of Income Tax-III, Hyderabad passed an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,004/-. The assessment u/s 143(3) was completed on 30-08-2011 by determining the total income at ₹ 3,91,004. An order u/s 263 was passed on 28-02-2014 setting aside the assessment to be redone on three issues. On an appeal against this order, the Hon'ble ITAT, in their Order dt. 18-02-2015, modified the order u/s 263 by restricting the direction to the disallowance u1s 40(A3) in respect of the payment of ₹ 9 lakhs towards purchase of land. 2. During the course of consequent assessment proceedings, the assessee explained that the provisions of section 40A(3) are not applicable to this payment. The assessee's contentions and the Assessing Officer's conclusions are reproduced below, from the assessment order for the sake easy reference: 8. In essence, the assessee's contentions are that the registration of land took place in the afternoon of 07-03-2009 that the day happens to be Saturday followed by public holiday Sunday; that the vendor N. Kesava Reddy stated that he was in need of money and so insisted on payment of cash, that the deal was earlier postponed twice and if is only as a final opportunity that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was that the vendor received the consideration on 2-03-2009 itself since the document was dated/executed on 2-03-2009, though the registration of the document took place on 7-3-2009. 4.1 A copy of the document is enclosed for perusal, along with a copy of a free translation into English thereof. As can be seen from the Telugu document, it is clear that: i. Non judicial stamp papers were purchased on 25-02-2009 in the name of Bavanasi Naga Mahesh. ii. Blank unfilled document, in Telugu, computer print, was copied on the stamp papers. I.T.A. No. 2401/Hyd/18 B. Naga Mahesh, Kurnool . 5 iii. All the blanks - date, name and address of the vendee, name and address of the vendor, amount of consideration -- were filled in by hand in Telugu. iv. Schedule to the document is totally handwritten in Telugu. v. There is no date mentioned after signature of the vendor at any of the pages of the documents. vi. There is no date mentioned after the signature of the two witnesses at the end of the schedule. 4.2 The sequence of events, as submitted bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... getting the document registered simultaneously . 4.4 It is prayed that the Hon'ble Commissioner oflncometax (Appeals), in the facts and circumstances explained above, be pleased to delete the addition of ₹ 9,00,000 made U/S 40A(3). 5. After considering the submissions of the assessee, the CIT(A) directed the AO to delete the addition of ₹ 9,00,000/- made u/s 40A(3) of the Act by observing as under: 5. The assessment order, statement of facts, grounds of appeal and written submissions have been perused. The explanation of the assessee citing the sequence of events is convincing. Substantial money would not have been given without getting registration. The Hon'ble ITAT, Amritsar in the case of Rakesh Kumar, Muktsar vs ACIT, Circle-II, Batbinda in ITA No.102(Asr)12014, dated 09.03.2016 for A.Y.2010-11 held that where the genuineness of payments is not disbelieved the disallowance u/s 40A(3) cannot be made and also Hon'ble ITAT, Jaipur in the case of M/s. A Daga Royal Arts in ITA No.1065/JP/2016, dated 15.04.2018 held that the identity of the sellers was known, genuineness of the purchase transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect to all exceptions laid down under Rule 6DD of the IT Rules and confirmed the applicability of Sec 40A(3) to this issue. The assessee has not brought on any new facts and/or evidences during the course of proceedings U/s. 143(3) r.w.s 254 which were not presented before learned CIT(A) during proceedings u/s. 263 and before Hon'ble ITAT. 5. Whether the learned CIT(A) is correct in allowing the appeal of the assessee when the assessee could not prove that the cash payment was made on 07-03-2009 since the registered document itself reveals and stated that the cash was paid and received by the date 0: execution of the document i.e., 02-03-2009 and the learned C!T(A) erred in deciding against the facts mentioned in registered document which is legal and binding. 7. Ld. DR submitted that the AO has clearly observed that the transaction took place on 02/03/2009, which is not a holiday and there is no compulsion on assessee to make such cash payment on week day. It is not falling under exception as per Rule 6DD. Assessee is expected to follow the law and not to violate the same. 8. Ld. AR submitted that the assessee has prepar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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