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TMI Blog2022 (9) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... vices Ltd. [ 2014 (2) TMI 30 - GUJARAT HIGH COURT] has dealt with the similar question of regular continuing relationship between payer and payee to conclude that such an overwhelming genuine instance of cash payment does not attract Section 40A(3) of the Act. We thus conclude that both the lower authorities have erred in law and on facts in disallowing assessee s impugned salary payments under Section 40A(3) of the Act. The same is directed to be deleted. Addition of Bigar Pavati Kharch expenses - As argued that the assessee could not file even basic supportive documents and expenditure vouchers in support of the impugned claim - HELD THAT:- This assessee is running a sugar factory procuring sugarcane from remote rural areas invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 26-8-2022 - SHRI S. S. GODARA , JUDICIAL MEMBER AND G. D. PADMAHSHALI , ACCOUNTANT MEMBER Appellant by : None Respondent by : Shri Sardar Singh Meena ORDER Per S. S. Godara , JM This assessee s appeal for AY 2013-14 arises against the CIT(A) 7, Pune s order dated 25.10.2017 passed in case No. PN/CIT (A)-7/Cir-1/10570/2016- 17, involving proceedings under Section 143(3) of the Income Tax Act, 1961 (in short the Act). Case called twice. None appeared at assessee s behest. It is accordingly proceeded ex-parte. 2. The assessee raises the following substantive grounds in the instant appeal: - 1. On the fact and in the circumstance of the case and in law of the learned Commissioner of Income Tax (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egra as the tribunal s coordinate bench s recent order in ITA No. 68/Pun/2016 The Malegaon Sahakari Sakhar Karkhana Ltd. vs. ITO dated 11.10.2021 has restored the same back to the Assessing Officer for his afresh appropriate adjudication. Ordered accordingly. This assessee s former twin substantive ground Nos. 1 2 are allowed for statistical purposes on the very terms. 4. Next comes the third substantive issue of Section 40(A)(3) cash payment disallowance amounting to Rs.1,06,94,050/- made by the assessee to it s employees. Learned CIT-DR could hardly dispute that both the lower authorities have rejected the assessee s impugned claim regarding regular salaries paid to employees only without even questioning the overwhelming genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per with a rider that the same will not be treated as a precedent. Ordered accordingly. The assessee partly succeeds in the instant fourth substantive ground. 6. Lastly comes cattle camps/fodder depot income of Rs.1,72,16,145/- made in the course of assessment as upheld in the CIT(A) s order as under: - 9.3 I have carefully considered the facts of the case and law apparent from the records. The AO observed that the assessee was running cattle camps and fodder depot during the drought period. The assessee purchase fodder (sugarcane) and supplied to government cattle camps/fodder depots. The AO observed that the assessee has received compensation @ Rs. 2,000/- per tone from government whereas the assessee paid Rs. 1,500/- to Rs. 1,850/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant has declared income of Rs. 3,73,36,087/- on Chara Chavni/depot in A.Y. 2016-17. The appellant is maintaining books of account and following the mercantile system of accounting. Therefore, undoubtedly, the income/profit has accrued even A.Y. 2013-14. The appellant cannot get itself absolved by declaring income in A.Y. 2016-17 by taking plea that the accounts were not clear in A.Y. 2013-14 and lots of claim were doubtful resulting into non-passing of final entry in books of account. This shows that the income has accrued to the appellant during the year under consideration and income cannot be shifted to A.Y. 2016-17 in the name of finalization of entries. The Supreme Court in case of Commissioner of tax v. Shoorji Vallabhdas and C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he action of the AO in making addition of Rs. 1,72,16,145/- on account of Income was not offered for Tax belong to Cattle camps / fodder depot is upheld and ground No. 6 of the appeal is dismissed. 9.6 The appellant is at liberty to claim relief if any on account of addition made in A.Y. 2013-14 on account of Chara Chavni/depot in A.Y. 2016-17. 7. We have given our thoughtful consideration to Revenue s vehement arguments in support of the impugned addition. It has come to record that the very income stands assessed in AY 2016-17. Mr. Meena vehemently argued that both the lower authorities have rightly invoked the assessee s mercantile system wherein it is supposed to recognise the impugned surplus involving fodder depot income in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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