9911796707
TMI Blog2019 (7) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... t during the year there was no exempt income and therefore, disallowance u/s.14A of the Income Tax Act, 1961 (hereinafter referred to as "the Act‟) is not warranted. Hence, it should be deleted. The Ld. AR of the assessee invited our attention to Schedule-11 which is part of Balance Sheet of the assessee‟s books of accounts placed before us in the paper book and demonstrated that there is no exempt income during the year in respect of the assessee. 5. We have perused the case records. We observe that in the submissions made before the Ld. CIT(Appeals), the assessee has categorically stated that as there is no exempt income earned by the assessee during the year, question of disallowance u/s.14A of the Act does not arise. For this proposition, the assessee has relied on the decision of the Hon‟ble Apex Court in the case of CIT Vs. Walfort Share & Stock Brokers (P) Ltd. reported in (2010) 41 DTR 233 wherein it was held that " for attracting section 14A, there has to be a proximate cause for disallowance which is its relationship with the tax exempted income. In absence of proximate cause for disallowance u/s.14A cannot be invoked. Further, We observe, the Hon‟ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Assessing Officer and now the assessee cannot go back on it/ retract it. (ii) The assessee did not prove the genuineness of the said purchase of machinery before the Assessing Officer nor adduce any other evidence during the Appellate proceedings in support of the purchases. During First Appellate proceedings, clear facts were not brought on record by the assessee nor he has adduced any direct or corroborative evidences in support of his contention. 9. At the time of hearing, the Ld. AR of the assessee on the issue of admission of addition with regard to the bogus purchases claimed it to be an ad-hoc acceptance and therefore, the assessee is not bound by it. For this proposition, the Ld. AR relied on the judgment of the Hon‟ble Bombay High Court in the case of The Commissioner of Income Tax, Mumbai Vs. M/s. Everest Kento Cylinders Ltd., Income Tax Appeal No.1165 of 2013 dated 8th May, 2015. The Ld. AR further submitted that the purchase of machinery so far as the assessee was concerned, is genuine one and from the seller from whom they had purchased, perhaps he may be a person on the wrong side of law but the assessee had always been a bona fide assessee. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncements placed before us on record. It is an undisputed fact that no evidence is there on record to demonstrate that the machinery reached at the site of the assessee‟s premises. In both rounds of proceedings before the Assessing Officer and as well as before the Ld. CIT(Appeals), the assessee was provided sufficient opportunity to provide supporting and corroborative documents regarding purchase of machinery but the assessee has not brought in any evidences on record regarding this purchase. Even, before us, the assessee could have furnished additional evidences which could have demonstrated in a way that the assessee‟s transactions were genuine and therefore, the acceptance of the addition made before the Assessing Officer was an ad-hoc one. However, no such evidences were brought on record by the assessee. The entire scenario clearly reflects that the assessee knew that the transactions were not genuine and therefore, in order to buy peace of mind it accepted the addition before the Assessing Officer and therefore, it in no circumstances, can be termed as ad-doc acceptance of the addition. It is rather well planed action on the part of the assessee. That further, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer made addition of Rs. 1,50,000/- invoking provisions of Section 40A(3) of the Act in respect of cash payments made each of Rs. 75,000/- on 15.07.2009 and 18.07.2009 to Shri Vasant Waman Sinkar. The assessee has explained that this amount was paid as per Consumer Dispute Redressal Forum of Jalgaon‟s order dated 11.11.2005 and also filed supporting evidences and copy of order of Consumer Dispute Redressal Forum. The Ld. CIT(Appeals) allowed the payments though made in contravention to Section 40A(3) of the Act only because of the fact that the payments were made as per directions given by the Consumer Dispute Redressal Forum of Jalgaon. 19. We observe that on perusal of the relevant documents and facts on records that the exceptions available in respect to section 40A(3) of the Act are provided in Rule 6DD of the Income Tax Rules, 1962. We have perused the exceptions as contained therein and we find that the criteria for which the Ld. CIT(Appeals) has allowed the amount though it is in contravention to Section 40A(3) of the Act, is not supported by any exceptions covered under Rule 6DD of the Income Tax Rules, 1962. The legislature in its own wisdom has created ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
