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TMI Blog2025 (1) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... not been considered by the ld. lower authorities, therefore, we restore the whole issue back to the file of ld. AO with a direction to the assessee to substantiate that the payment made to 61 parties on bank holiday, the payment was made by the agent and further the business exigency also demanded payment of cash - Appeal of the assessee is allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Commissioner of Income Tax (Appeals) for the above Assessment Year 2015-16. For these and any other such grounds which may be urged at the time of hearing.it is prayed that the relief as prayed before the Honourable Bench may please be allowed in the interest of law and natural justice." 3. The brief facts of the case show that assessee is an individual, deriving income from business, house property and other sources. Assessee is also carrying on wholesale dealing in gold and silver bullion. She filed her return of income on 30.9.2015 declaring income of Rs. 8,82,840. This return was selected for scrutiny under CASS and notices u/s. 143(2) & 142(1) were issued. 4. The assessee was issued a show cause notice during the assessment proceedings proposing for addition of Rs. 1,09,13,444 being purchases through cash payment u/s. 40A(3) of the Act and also to substantiate the proof of acceptance of loan and repayment of loan respectively. Assessee appeared through her son and furnished the details of purchase ledger where cash payments along with bills and proof of repayment of loan and acceptance of loan was submitted. Assessee was asked to furnish total purchase and sales ledg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (f) of Rule 6DD of the I.T. Rules could not have been made. 6. The ld. CIT(A) reproduced the provisions of section 40A(3) along with Rule 6DD and stated that assessee has violated the same and therefore disallowance is required to be confirmed. The ld. CIT(A) noted that in the instant case Auditor has identified 61 transactions attracting mischief of section 40A(3) of the Act. These payments are spread throughout the previous year and all these payments could not have ben made on days where banks were closed on account of holiday/strike. Therefore the statement of the Auditor in Form 3CD that 61 transactions happened on the day when the banks are closed/holiday cannot be accepted. He held that it is a stringent condition and assessee has not furnished any proof to this effect. He further stated that several judicial precedents relied by the assessee are also on different facts. He held that the case of cash payment in violation of section 40A(3) is not one of events, but series of events and assessee's case is not covered by any of the exceptions covered under Rule 6DD and therefore disallowance was upheld. Accordingly appeal was dismissed. 7. The assessee is in appeal before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices on behalf of such person, then no disallowance could have been made. Accordingly it was submitted that disallowance made by the AO of Rs. 1,09,13,144 u/s. 40A(3) of the Act is incorrect. 8. The ld. DR vehemently supported the orders of ld. lower authorities and submitted that assessee has made cash payment for purchase of goods and therefore provisions of section 40A(3) of the Act clearly apply. The assessee has failed to show any reasonable cause or any exception under which the above transaction falls as per provisions of Rule 6DD of the I.T. Rules. Hence there is no infirmity in the disallowance made by the ld. AO and confirmed by the ld. CIT(A). It was stated that decision relied up on by assessee are distinguishable and on different facts. It was stated that discount, new customers are not exception provided u/r 6DD of the IT Rules, 1962. 9. Having carefully considered the rival contentions and perused the orders of ld. lower authorities, the facts clearly show that assessee is an individual who started her business in gold & bullion. She was found to have purchased the gold & bullion in cash. There were 61 transactions entered into by assessee for purchase of gold & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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