TMI Blog2022 (7) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... hereinabove and the order of CIT(A) in this regard is justified. Thus, the ground No. 1 raised by the Revenue is dismissed. Addition of cash payment to various persons u/s. 40A(3) - HELD THAT:- We find that the transaction in respect of purchase of plot at Adgaon Shivar, Gat No. 598/1, did not materialize and the payment made in cash of Rs.15,00,000/- was refunded to the assessee by way of bank cheques by Mr. Virendra Vijaysingh Pardeshi. Therefore, no addition is justified in this regard and we find no infirmity in the order of CIT(A). Further, payment in cash was made on bank holidays and claim of exception provided in Rule 6DD(j) of the Rules. We note that no expenditure claimed as the said payment was made on cancellation of shathekhat (agreement to purchase). On perusal of impugned order at Page No. 24, we note that the assessee filed calendar for relevant period showing bank holiday, Office Circular No.07/2010 dated 24-11-2010 issued by Chief General Manager (HRD). The CIT(A) considering the bank holidays and circular relied there upon deleted the addition made by the AO. The ld. DR did not bring on record any evidence rebutting the finding rendered by the CIT(A) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard and it justified. Thus, the ground No. 3 raised by the Revenue is dismissed. - ITA No.1126/PUN/2017 - - - Dated:- 9-6-2022 - SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER Assessee by : Shri Sanket Joshi Revenue by : Shri M.G. Jasnani ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the Revenue against the order dated 03-02-2017 passed by the Commissioner of Income Tax (Appeals)-2, Nashik [ CIT(A) ] for assessment year 2013-14. 2. Brief facts relating to the issue on hand are that the assessee is an individual and engaged in the business of purchase and sale of plots, flats and construction activity. The assessee declared a total income of Rs.46,22,033/- against which the AO determined the same at Rs.3,00,63,945/- vide its order dated 28-03-2016 u/s. 143(3) of the Act inter alia making addition on account of unexplained expenditure and disallowance u/s. 40A(3) of the Act. The CIT(A) deleted additions partly made by the AO. Having aggrieved, the Revenue is before us. 3. Ground No. 1 raised by the Revenue challenging the action of CIT(A) in deleting the addition of Rs.1,56,37,412/- made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the paper book from Page Nos. 30 to 137 of the paper book. He referred to order of this Tribunal in the case of M/s. Dhananjay Marketing Pvt. Ltd. in IT(SS)A Nos. 65, 67 69/PUN/2017 and argued that it is a settled position of law that no addition can be made merely based on statement of a third party u/s. 132(4) of the Act in the absence of incriminating material. He argued whether the statement of Zaheeruddin S. Kokani is a basis to form an opinion that the assessee made undisclosed investments in the purchase of property. He argued that the statement of a search person is not conclusive in the assessment of another person and material gathered in the search of one person is not an evidence in the assessment of another person. The AO misdirected by applying presumption u/s. 132(4A) of the Act to the assessee. The said presumption cannot be extended to a third person. The statement of Zaheeruddin S. Kokani cannot form a basis for addition in the hands of assessee in the absence of any independent corroborative evidence. The appellant-revenue completely failed to establish that the assessee paid cash to the said Zaheeruddin S. Kokani and the notings of the said seized loos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ADIT proceeded to add the same on unexplained expenditure in the hands of assessee. We note that the base for the AO to proceed to add an amount of Rs.2 crores said to have been paid by the assessee is the statement of six sellers that they have received Rs.2 crores in cash over and above Rs.7.11 crores. During the course of cross-examination of the said Mr. Zaheeruddin Sallauddin Kokani admitted to have unable to confirm who paid a sum of Rs.2 crores to him. He also unable to re-collect the transaction and the total consideration therein. He also confirmed that the said agreement consideration was less than the Government valuation as the said land was involved in some litigation. Therefore, it is clear that the said Mr. Zaheeruddin Sallauddin Kokani did not disclose specifically from whom the cash payment was received as admittedly there were three purchasers. Further, the AO also reproduced the Q. No. 12 and its answer at Page No. 4 of his order. On perusal of the same, we note that the said Mr. Zaheeruddin Sallauddin Kokani confirmed receipts of cash of Rs.2 crores but however no mention of assessee was made by the said Mr. Zaheeruddin Sallauddin Kokani. In view of the same if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d No. 2 raised by the Revenue challenging the action of CIT(A) in deleting the addition of Rs.50,62,800/- made by the AO on account of cash payment to various persons u/s. 40A(3) of the Act in the facts and circumstances of the case. 9. Heard both the parties and perused the material available on record. We note that the AO made disallowance of Rs.53,04,500/- u/s. 40A(3) of the Act regarding 23 cash payments made in excess of Rs.20,000/-. Admittedly, there was no dispute the said cash payments were made for purchase of plots of land which constitutes opening stock. We note that the AO discussed the issue of cash payment in respect of payments made in cash in Para No. 6 of his order and CIT(A) at Page No. 22 of impugned order. We find that the transaction in respect of purchase of plot at Adgaon Shivar, Gat No. 598/1, did not materialize and the payment made in cash of Rs.15,00,000/- was refunded to the assessee by way of bank cheques by Mr. Virendra Vijaysingh Pardeshi. Therefore, no addition is justified in this regard and we find no infirmity in the order of CIT(A). 10. Further, payment of Rs.20,81,300/- in cash was made on bank holidays and claim of exception provided in Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were incurred on Independence day and Sunday which were bank holidays and hence the disallowance is not justified in view of exception provided in Rule 6DD(j) of the I.T. Rules. The disallowance of Rs.4,83,500/- is therefore deleted to the extent of Rs.2,41,800/-. The balance disallowance of Rs.2,41,700/- is confirmed. 13. We find no evidence brought on record by the ld. DR challenging the finding of CIT(A). In the absence of which, we find no infirmity in the order of CIT(A). Thus, ground No. 2 raised by the Revenue is dismissed. 14. Ground No. 3 raised by the Revenue challenging the action of CIT(A) in deleting the addition of Rs.45,00,000/- made by the AO on account of payment made to Kokani family u/s. 40A(3) of the Act in the facts and circumstances of the case. 15. Heard both the parties and perused the material available on record. We note that the payment in cash to an extent of Rs.45,00,000/- were confirmed by the Kokani family before the Sub-Registrar and the said cash payment for forming part of total consideration of Rs.7,11,00,000/- vide registered sale deed. A contention was raised by the assessee that the said payments were added to the value of closin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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