TMI Blog2016 (3) TMI 1301X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has made payment. Accordingly, in the given facts and circumstances of the case, we delete the disallowance made by AO and confirmed by CIT(A) by invoking the provisions of section 40A(3) of the Act - Decided in favour of assessee - I.T.A No.425/Kol/2013 - - - Dated:- 16-3-2016 - Shri Mahavir Singh, JM Shri M. Balaganesh, AM For the Appellant: Shri Soumitra Choudhury, Advocate For the Respondent: Shri S. M. S. Tauheed, JCIT, Sr. DR ORDER Per Shri Mahavir Singh, JM: This appeal by assessee is arising out of order of CIT(A)-VI, Kolkata vide Appeal No. 225/CIT(A)-VI/Cir-5/2011-12/Kol dated 24.12.2012. Assessment was framed by JCIT(OSD), circle-5, Kolkata 143(3) 115WE(3) of the Income Tax Act, 1961 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t correct. 3. Briefly stated facts are that the assessee is engaged in the business of mining of iron ore. During the course of assessment proceedings for AY 2009-10, the AO noticed from the books of account i.e. ledger and bills and vouchers produced before him that the assessee has made cash payment on account of truck loading wages charges in violation of the provision of section 40A(3) of the Act i.e. the payment in cash above ₹ 20,000/- to a single person. Accordingly, the AO made disallowance of expenses incurred on account of truck loading wages charges of ₹ 1,08,24,239/-. Aggrieved, assessee preferred appeal before CIT(A), who also confirmed the action of AO. Aggrieved, assessee preferred second appeal before Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Purty, Nirakar Nayak and Chandra Shekhar Nanda to undertake Truck loading job in the mining area and paid them wages on weekly basis for the quantity loaded at a fixed rate @Rs.421/- per M T. The payment use to be made to the group leader who in turn distributes the wages earned amongst the other co-workers. While framing the assessment AO has disallowed the expenditure of ₹ 1,08,24,239/- being the payment towards wages incurred for loading of trucks on the ground that the payment is in violation of section 40A(3) of the Act as the payment has been made to a single person above ₹ 20,000/- in cash. We find that the assessee company engaged group of labourers for execution of loading of trucks at various points. The wages payabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served by any bank and payment is made to any person who ordinarily resides or is carrying on any business or profession in any such village or town. We find that the plea of the assessee is quite reasonable and assessee s business falls totally in a tribal area which can be ascertained from the address itself. The nature of the business of the assessee is such that assessee has no other alternative except to make payment to labours in cash because that area is not served by any bank and the labours do not receipt the payments by cheque or any other mode except in cash. Even otherwise the payments are also genuine as AO has verified complete books of account including bills and vouchers and could not find any defect in the same. This issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial question of law is involved in this matter. Hence the appeal being ITA NO. 202 of 2008 is dismissed. 6. From the above facts and circumstances, it is clear that the assessee s payments are genuine and not doubted by revenue. The revenue could not controvert that the assessee s mine is in tribal area of Orissa where no banking facility is available and labourers do not have any bank account to whom assessee has made payment. Accordingly, in the given facts and circumstances of the case, we delete the disallowance made by AO and confirmed by CIT(A) by invoking the provisions of section 40A(3) of the Act. The appeal of the assessee is allowed. 7. In the result, appeal of assessee is allowed. Order pronounced in the open court on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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