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TMI Blog2018 (8) TMI 1962X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue of violation of provisions of section 40A(3) and the same was decided against the assessee. CIT(A) has decided the said issue in favour of assessee but the order of CIT(A) in making disallowance u/s 69C is not warranted. In the present case, since the issue was limited to violation of provisions of section 40A(3) of the Act and hence, we find no merit in the order of CIT(A). Reversing the second part of finding of the CIT(A), we allow the grounds of appeal raised by the assessee. - ITA No. 127/PUN/2017 - - - Dated:- 23-8-2018 - MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM For the Appellant : Shri Harikrishan For the Respondent : Shri Yogesh Kamat ORDER PER SUSHMA CHOWLA, JM: The appeal filed by asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar, Shri Shriram N. Pokalwar and Shri Digamber R. Fedewad, recorded u/s 131 of the Income Tax Act without confronting the said statements to the assessee and without granting an opportunity to the assessee to cross examine these truck operators. The Assessment order therefore is a nullity. 3. The present appeal has been filed after delay of three days. The assessee has filed an application for condonation of delay. In view of the reasons mentioned therein, we condone the delay of three days and proceed to decide the present appeal after hearing the learned Departmental Representative for the Revenue. 4. The issue raised in the present appeal is against the order of CIT(A) in making disallowance under section 69C of the Act, wherein th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal against aforesaid finding of the CIT(A). 9. On perusal of record and after going through the order passed under section 263 of the Act, we find that the proceedings in the case were initiated by the Commissioner with specific directions to the Assessing Officer to consider the payments to truck owners and disallow the same under section 40A(3) of the Act. The findings of the Commissioner were as under:- 3.1.2 In the instant case, the assessee has not deducted tax at source from the payments made to truck owners i.e. sub-contractors, the AO has disallowed the said expenses u/s. 194-C r.w.s.40(a)(ia) of the Act, which is subject matter of appeal before the CIT(A), Aurangabad. The said disallowance u/s. 40a(ia) is technical as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), this issue will be non-operative. In the interest of revenue, it is essential to keep this issue alive to verify the violation by the assessee provisions of section 40A (3) and make additions on protective basis, if necessary. Therefore, the submission of the assessee that disallowance u/s. 40A(3) will tantamount to double taxation is acceptable to the extent detailed above. Now, the assessee has produced books of account before the undersigned by stating that none of the expenses incurred by him in cash is hit by the provisions of section 40A (3) the I. T. Act, 1961. The AO is directed to verify the cash book to ascertain the cash payments for transportation expenses made by the assessee in violation of provisions of Sec. 40A (3) along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut he further goes on to add that since the assessee has failed to explain the sources of said expenditure, addition of ₹ 31,57,523/- was confirmed under section 69C of the Act. The present proceedings were initiated against the assessee consequent to exercise of jurisdiction by the Commissioner under section 263 of the Act. It may be put on record that earlier issue whether there is any violation of section 40(a)(ia) of the Act has been decided in favour of assessee; hence the Assessing Officer took up proceedings for deciding the issue of violation of provisions of section 40A(3) of the Act and the same was decided against the assessee. The CIT(A) has decided the said issue in favour of assessee but the order of CIT(A) in making dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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