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TMI Blog2019 (10) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal has held that the reopening was valid. The decision taken by the Tribunal on merits of the case cannot be reversed in the proceedings under section 254(2) of the Act by re-appreciating the same facts and decisions relied upon by the ld. A/R of the assessee. Therefore, the assessee has not pointed out any apparent mistake in the order of the Tribunal qua this issue. Accordingly, we do not find any merit or substance in the mistake alleged by the assessee in the Miscellaneous application Addition u/s 40A(3) - taxi fare and dish installation charges - HELD THAT:- As regards the disallowance made under section 40A(3) of the Act in respect of taxi fare, the Tribunal has discussed the relevant fact that each payment is exceeding ₹ 20,000/- and was represented by a separate bill. Therefore, to that extent the expenditure was clearly hit by the provisions of section 40A(3) of the Act. Accordingly, we do not find any apparent error in the order of the Tribunal qua the disallowance made under section 40A(3) on account of taxi fare. Second disallowance was made in respect of the dish installation charges made in cash. To the extent of the payment made in cash exceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Miscellaneous Application is seeking modification of the findings/decision taken by the Tribunal on the issue of reopening of the assessment. The Tribunal has considered this issue in para 4 as under :- 4. We have considered the rival submissions as well as relevant material on record. There is no dispute that the original assessment was completed U/s 143(3) on 20.02.2014 thereafter there was audit objection dated 26.06.2015 wherein it was pointed out that the assessee has incurred expenditure of Dish Installation charges and taxi fare payment in cash. Thus, it was pointed out that as per ledger details the payments made in cash to various persons exceeds ₹ 20,000/- which is not allowability by virtue of Section 40A(3) of the Act. Pursuant to the said audit objection the AO reopened the assessment by issuing notice U/s 148 of the Act on 08.09.2015 by recording the reasons as under:- The assessee was engaged in wholesale and retail trading of recharge coupons and mobile sets in the proprietary concern in the name and style of M/s J K Enterprise. On perusal of record of the assessee, it is observed that assessee had incur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total ₹ 270000 As per provisions of Section 40A(3) of the Act where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day otherwise than by an A/c payee cheque drawn on a bank or account payee draft, exceeds twenty thousand Rupees no deduction shall be allowed in respect of such expenditure. In this case, the assessee has violated provisions of section 40A(3) of the Act. The assessee himself did not disallow such expenditure and added to the total income for the year under consideration. I have, therefore, reason to believe that the income to the extent of ₹ 4,02,900/- has escaped assessment within the meaning of section 147 of the IT Act, 1961 for the assessment year 2011-12. Therefore, it is a fit case to issue notice u/s 148 of the IT Act, 1961. From the reasons recorded by the AO it is a clear case that the Assessing Officer has considered the details of the expenditure incurred by the assessee in cash which exceeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder consideration then, the proviso to Section 147 is not attracted in the case of the assessee. Hence, we do not find any error or illegality in the reopening of the assessment by the AO in the assessment year 2011-12. Therefore, all the contentions of the assessee as well as the decisions relied upon by the ld. A/R of the assessee were considered by the Tribunal while passing the impugned order. The Tribunal has specifically discussed the relevant facts pertaining to the violation of section 40A(3) of the Act which were pointed out by the Audit Party. Therefore, the AO has completely ignored the mandatory provisions of section 40A(3) at the time of passing the order under section 143(3) and subsequently the audit party has pointed out the fact of violation of provisions of section 40A(3) when the assessee has made the payment in cash exceeding the minimum limit as provided under section 40A(3) of the Act. This fact of payment in cash exceeding the limit as provided under section 40A(3) is not in dispute and, therefore, in those facts, the Tribunal has held that the reopening was valid. The decision taken by the Tribunal on merits of the case cannot be reversed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has paid a total amount of ₹ 4,02,900/- in cash in violation of provisions of Section 40A(3) of the Act. The details of the said payment of the expenditure are as under:- TAXI FARE DISH INSTALLATION CHARGES S.No. Date Amount S.No. Date Amount 1 15.04.2010 ₹ 22500 1 31.05.2010 ₹ 28000 2 30.04.2010 ₹ 22500 2 31.07.2010 ₹ 28000 3 30.06.2010 ₹ 22500 3 31.08.2010 ₹ 36400 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of the assessee as there are various means of transport conveyance and therefore, it is always a question of genuineness and correctness of the claim. Once the AO has invoked the provisions of Sections 40A(3) of the Act and the expenditure incurred by the assessee and payment made in cash is of such nature that cannot be regarded as inevitable or essential to the business activity of the assessee then, the decision of this Tribunal will not help the case of the assessee. As regard dish installation charges though the assessee has claimed the said expenditure and the Assessing Officer has not made any disallowance on account of genuineness of the expenditure however, since dish installation are not the main business activity of the assessee. As the assessee is only a distributor of mobile sim card, therefore, the installation of dish may be an additional activity undertaken by the assessee however, once the said activity is not directly generating the revenue then, the expenditure incurred by the assessee in respect of such activity cannot be regarded as an essential which cannot be disputed. Hence, in the facts and circumstances of the case, we do not find any error or illegal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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