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TMI Blog2023 (6) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... mes of Shri Bharat Agarwal, Dinesh Chandra Agrawal, however, the assessee has not been able to show the relation of these person with assessee company. We are hereby restoring the file to the Ld. CIT(Appeals) to verify whether the firstly, assets (vehicles) have been acquired out of funds of the assessee company, secondly, whether Shri Bharat Agarwal, Dinesh Chandra Agrawal i.e. person in whose names the vehicles have been registered are the Directors of the assessee company. In case, the assessee is able substantiate the above two aspects, Ld. CIT(Appeals) may allow the appeal of the assessee. Addition u/s 40A(3) - payment by bearer cheque - HELD THAT:- Out of the total payment of Rs. 3.09 crores made to the same party i.e. Shri Dharmendra Rajput, proprietor, Sunrise Construction, a sum of Rs. 6,35,000/- was paid by way of bearer cheque, on account of an inadvertent mistake, wherein account payee cheque was omitted to be mentioned on the face of the cheque. It is not the case of the Department that any cash withdrawal was made in the instant facts. Payee also treated the aforesaid bearer cheque as account payee cheque and deposited the money in the bank along with othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation and submission of the appellant. 3) The ld. Commissioner of Income Tax (Appeals) - XX, Ahmedabad has erred in law and on facts in confirming the addition of Rs. 2,83,505.00 for non deduction of TDS from payment made to transporters and erred in not properly appreciating the explanation and submission of the appellant. 4) The learned CIT (A) has erred in law and on facts of the case in confirming action of the Id. AO in levying interest u/s. 234B / C of the Act. 5) The learned CIT (A) has erred in law and on facts of the case in initiating penalty proceedings u/s. 271 (1)(c) of the Act. 6) It is therefore, prayed that the order of the id. Commissioner of Income-Tax (Appeals)-XX, Ahmedabad may be set-aside and the return of income of the appellant be accepted. 7) The Appellant Crave leave to add, amend, alter, vary or withdraw any or all the grounds of appeal before or at the time of hearing of appeal. 3. The assessee has taken primarily three grounds of appeal, which shall be taken up individually in the succeeding paragraphs. Ground number 1: Disallowance of depreciation of ₹ 12,32,064/- 4. The brief facts in relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the appellant company. Merely purchasing the vehicle in the name of the outsiders and claiming to have dominion control thereupon by the appellant is not accepted. Whether the running expenditures relating to these vehicles have been debited in the books of accounts of the appellant company has also not been demonstrated. No bill copies of the vehicle purchases, their repairing and maintenance expenses and diesel, petrol expenses have been submitted along with the respective ledger account copies to verify the contention of the appellant. Whether those vehicles have been utilized for the purpose of business of the appellant company has also not been proved. Further, verification about the possession of those vehicles under the appellant in absence of any details and supporting evidences remained unverifiable. Therefore, the case laws relied upon by the appellant are also not applicable over the facts of the case as those were specific to the vehicle in the name of the directors but in our case it is not so. Therefore the AO's action for making the disallowance of depreciation is correct and justified and the ground of the appellant is dismissed. 6. Before us, the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, in the instant facts, Ld. CIT(Appeals) has made a specific observation that firstly, the assets (vehicles) have not been acquired out of funds of the assessee company, secondly, the assets have been purchased in the names of Shri Bharat Agarwal, Dinesh Chandra Agrawal, however, the assessee has not been able to show the relation of these person with assessee company. In view of the above facts, we are hereby restoring the file to the Ld. CIT(Appeals) to verify whether the firstly, assets (vehicles) have been acquired out of funds of the assessee company, secondly, whether Shri Bharat Agarwal, Dinesh Chandra Agrawal i.e. person in whose names the vehicles have been registered are the Directors of the assessee company. In case, the assessee is able substantiate the above two aspects, Ld. CIT(Appeals) may allow the appeal of the assessee in light of several Rulings highlighted above. 8. In the result, Grounds No.1 of the assessee s Appeal is allowed for statistical purposes. Grounds of Appeal No. 2: Addition of ₹ 6,35,000/- u/s 40A(3) of the Act: 9. The brief facts in relation to this ground of appeal are that during the course of assessment of Shri Dha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to mention A/c Payee cheques on the face of the cheque, which is the cause of the present disallowance. It is nobody s case that any amount was withdrawn in cash. Further the payee also treated the aforesaid bearer cheques as account payee cheques and deposited the money in the bank account. Therefore, in the instant facts, the disallowance was made clearly on account of bonafide a mistake on part of the assessee. All the payments relating to ₹ 3.09 crores were made by way of account payee cheques and in this instant of set of facts, it may be seen that this was an inadvertent mistake on part of the assessee. The counsel for the assessee drew our attention to page 23 and 25 of the paper book and submitted that though the cheques were bearer cheques, however the same are credited to the bank account of the assessee. In response, the DR relied upon the observations made by the AO and Ld. CIT(Appeals) in their respective orders. 12. We have heard the rival contentions and perused the material on record. We are in agreement with the arguments put forward by the learned counsel for the assessee that in the instant set of facts, out of the total payment of Rs. 3.09 crores made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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