9911796707
TMI Blog2024 (7) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... out by the assessee. If we accept the contention of assessee that genuineness of expenditure is not in doubt hence, provision of section 40A(3) will have no application. In that event, it will render the provision of section 40A(3) of the Act as redundant. Decided against assessee. Addition in respect of cash deposited in the bank account - addition and treating the amount deposited as unexplained - HELD THAT:- Law is well-settled that if any amount is found credited in the bank account of the assessee, it is incumbent upon him to prove the source of such credit. If he fails to do so, the authorities would be justified in drawing adverse inference against such credits. In the case in hand, the assessee could not prove the source of cash deposits neither before authorities below nor before this Tribunal. Therefore, assessee grossly failed to prove the source of the impugned cash deposit in bank account, we do not see any reason to disturb the findings of authorities below. Ground No.3 raised by the assessee is, therefore, rejected. Addition on account of license fee paid to Excise Department - AO was of the view that the assessee had claimed excessive sum - as argued assessee is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 013. The case was selected for scrutiny assessment and a notice u/s 143(2) of the Income Tax Act, 1961 ( the Act ) was issued on 03.09.2014. Thereafter, other statutory notices were issued u/s 142(1) of the Act to the assessee. In response thereto, Ld. Authorized Representative ( AR ) of the assessee, Shri Mahesh Jain, CA attended the proceedings and furnished the details as called for from time to time. The Assessing Officer ( AO ) after examining the books of account on test check basis, proceeded to frame assessment vide order dated 04.03.2016. Thereby, the AO made addition of INR 2,00,38,777/- in respect of purchases exceeding INR 20,000/- made in cash by invoking the provision of section 40A(3) of the Act, addition on account of unexplained cash deposit in the bank account of the assessee amounting to INR 16,00,000/- and unexplained expenditure regarding excess claim of license fee of INR 5,70,000/-. Thus, the AO assessed the income of the assessee at INR 2,26,82,577/- against the income declared at INR 4,73,800/-. 3. Aggrieved against this, the assessee carried matter in appeal before Ld.CIT(A), who after considering the submissions of the assessee, sustained these additions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and various judicial decisions relied on by the assessee did not support the case of the assessee. The findings of the Ld. CIT(A) are at Pg. 18, Para 5.2.5 of his order. The assessee is an individual dealing in trading of liquor and beer. In the year under consideration he has undisputedly made purchases in cash from three parties amounting to Rs. 2,00,38,777/-. This is a fact on record that the TCS was deducted by these parties on the purchases. The Ld. AO himself has stated this fact in the show cause notice issued by him, as quoted in his order at Pg. 2. The parties concerned were as follows:- 1) Aravali Wines 2) Poonia Wines 3) Karan Singh From the copy of Form 26AS it can be seen that all these three parties have duly deducted TCS on the amount of purchases made by the assessee in cash. The assessee has also claimed this amount of TCS in his return of income. Copy of the acknowledgement is placed at PB Pg. 1. The Ld. AO himself had issued notice under section 133(6) of the Act to all these three parties whereby they were asked to confirm the transactions. All three parties have duly replied to the Ld. AO by providing necessary documents relating to the cash transactions, Thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A). He contended that the assessee failed to demonstrate business expediency for such cash payments. He contended that it was incumbent upon the assessee to prove that his case falls in one of the exceptions as embodied in Rule 6DD of the Income Tax Rules, 1962 ( the Rules ). A bald assertion would not be sufficient for coming to the conclusion that the impugned expenditure was made out of business expediency and/or falls under any of the exception provided by law. In the absence of such material, the findings of Ld.CIT(A) should not be disturbed. Therefore, the authorities were justified in making the addition. He submitted that even if the purchases are found to be genuine, the assessee was required to give reason why payment in cash was necessitated. 10. We have heard the contentions of both the parties and perused the material available on record. There is no dispute with regard to the fact that the assessee has made payment in cash in respect of the purchases. The law mandates that the business expenditure if any needs to be incurred through banking channels if the payment exceeds to INR 20,000/-. Of course, certain exceptions are also provided under the Act. The assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash under the compelling, commercial expediency. In the present case, no such case is made out by the assessee. If we accept the contention of the Ld. Counsel for the assessee that genuineness of expenditure is not in doubt hence, provision of section 40A(3) will have no application. In that event, it will render the provision of section 40A(3) of the Act as redundant. Under the facts and circumstances of the present case, the case laws relied by Ld. Counsel for the assessee would not come to rescue of the assessee. We therefore, do not see any good reason to disturb the finding of Ld.CIT(A). The Ground Nos. 2(i) 2 (ii) raised by the assessee are rejected. 11. Ground No.3 raised by the assessee is against sustaining of addition of INR 16,00,000/- in respect of cash deposited in the bank account. 12. Ld. Counsel for the assessee submitted that authorities below were not justified in making the impugned addition and treating the amount deposited as unexplained. 13. Ld. Sr. DR for the Revenue opposed these submissions and supported the orders of the authorities below. He contended that the assessee miserable failed to prove the source of cash deposits. 14. We have heard the contention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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