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TMI Blog2023 (7) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... uch expenditure. From the assessment order, it is very clear that in the present case no payment in cash exceeding Rs. 20,000/- had been made. Therefore, the Assessing Officer has wrongly invoked the provisions of Section 40A(3) of the Act and accordingly, the same cannot be sustained. We set aside the order of the NFAC and direct the Assessing Officer to delete the addition. Decided in favour of assessee - ITA No. 52/Jab/2023 - - - Dated:- 21-7-2023 - Shri Sudhanshu Srivastava, Judicial Member And Shri Anadee Nath Misshra, Accountant Member For the Appellant : Shri H.S. Modh, Advocate For the Respondent : Shri Ravi Mehrotra, Sr. DR ORDER PER SUDHANSHU SRIVASTAVA, J.M.: This appeal is preferred by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in the name of the deceased whereas the name of Legal Heir was requested to substitute. 2. That the addition made at Rs. 3,46,050/- on the ground that the payment made to avoid the TDS which is not applicable on the material purchase. 3. That the addition made at Rs. 3,46,050/- is arbitrary and bad in law. 4. That the Assessee crave leaves to raise any other ground/s on or before the date of hearing to prove that the order passed is bad. 5. The ld. Authorized Representative submitted that the assessment order passed subsequent to the order passed u/s. 263 of the Act was bad in law as well on facts for the simple reason that all the payments which have been disallowed u/s. 40A(3) of the Act were below Rs. 20,000/- and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and also the fact that the amount was due to those parties. On this, it has been stated by the assessee that the payments have been made as per the vouchers produced for examination. Since the vouchers being self made and can be made of any amount and in any manner according to convenience, this plea of the assessee is not accepted. The assessee could not explain the reasons why payments below Rs. 20,000/- have been made to various parties when there was sufficient fund available with the assessee and also the fact that the amount was due to parties. In the circumstances it is obvious that the sole strategy of making payments below Rs. 20,000/- was to avoid TDS liability to-wards purchasers. From the counter-foil of Cheque Book only one p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inance Act, 2017, which came into effect from 01.04.2018, specifies that where the assessee had incurred any expenditure in respect of which a payment or aggregate of payments made to a person in a day otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds Rs. 20,000/-, no deduction shall be allowed in respect of such expenditure. From the assessment order, it is very clear that in the present case no payment in cash exceeding Rs. 20,000/- had been made. Therefore, the Assessing Officer has wrongly invoked the provisions of Section 40A(3) of the Act and accordingly, the same cannot be sustained. We set aside the order of the NFAC and direct the Assessing Officer to delete the addition. 8. In the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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