9911796707
TMI Blog2022 (8) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... o.86/CIT(A)-PDY/2017- 18 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT (Appeals) erred in confirming the disallowance of Rs.2,58,98,591/- on the presumption of cash purchases while applying the provisions of section 40A(3) of the Act and consequently erred in adding back such sum in the computation of taxable total income without assigning proper reasons and justification. 3. The CIT (Appeals) failed to appreciate that the provisions of section 40A(3) of the Act had no application to the facts of the case and ought to have appreciated that the franchise agreement was completely misinterpreted, thereby vitiating the decision rendered from para 5.4 to para 5.9.2. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further ought to have appreciated that in any event the provisions of section 57(iii) of the Act were wrongly understood while restricting the expenses for earning the said income, thereby vitiating the related findings. 10. The CIT (Appeals) failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law." 3. Brief facts of the case are that the assessee is proprietor of Honey Dew Foods, which is engaged in the business of trading in hot breads. The assessee is a franchise holder for M/s. B & M Hot Breads Pvt.Ltd., which is manufacturing and selling hot breads. The assessee has entered into agreement with M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 40A(3) cannot be applied in the given facts & circumstances of the case. The learned A.R. further submitted that the assessee could not explain its case before the Assessing Officer with necessary evidence and therefore, issue may be set aside to file of the Assessing Officer to give one more opportunity of hearing to the assessee to explain his case. 5. The learned D.R, on the other hand, supporting order of the learned CIT(A) submitted that there is no dispute with regard to cash payments in excess of prescribed limit. It is also not in dispute that the assessee has accounted transactions with supplier as his own purchases. Therefore, question of applicability of provisions of section 40A(3) cannot be doubted and hence, other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y case provisions of section 40A(3) cannot be applied, because, real nature of transactions need to be ascertained. In case, the assessee acts as commission agent and earns commission on total sales, then even if, for practical purposes, transactions are treated as purchase & sales, then for the purpose of provisions of section 40A(3) of the Act, real nature of transaction needs to be ascertained. In this case, the assessee claims that though he has reported purchases as his own purchases, but said purchases is made on behalf of principal, and his income is only commission on net sales. In this regard, the assessee has placed agreement between the M/s. B & M Hot Breads Pvt.Ltd. and the assessee. These fact needs to be verified by the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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