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2016 (6) TMI 1371 - AT - Income TaxDisallowance u/s 40A(3) - cash payment exceeding or ₹ 20,000/- - whether payment made to the labourers in the instant case is in violation of provision of Sec.40A(3) ? - HELD THAT:- In the instant case, the genuineness of the payments has not been doubted. Besides the above we also find that from the submission made by AR that none of the case, the payment has exceeded more than ₹20,000/- and where the payment was exceeding more than ₹20,000/- it was paid to the sardars who further paid to individual labourers. DR has also failed to bring anything contrary to the argument placed by Ld. AR before us. Therefore in our considered view in none of case the payment in the instant case is inconsistent to the provision of section 40A(3) of the Act and taking a consistent view of the Co-ordinate Bench of this Tribunal in the case of Sri Manoranjan Raha [2016 (1) TMI 359 - ITAT KOLKATA] we are inclined to reverse the orders of Authorities Below. This ground of assessee’s appeal is allowed. Bogus purchases - HELD THAT:- AO disallowed the purchases from Mr Samiran Dutta on the ground that notice for verification was not served u/s. 133(6) of the Act but Ld. AR has produced the same before appellate stage for AY 2010-11. So the identity of the party (Mr. Samairan Dutta) cannot be doubted for instant case and for the year under consideration. The copy of the order of Ld. CIT(A) is placed at page 68 of the paper book. In this view of the matter and after considering assessment order for AY 2010-11, we are of the considered view that the party is not identifiable and so the purchase cannot be held bogus. Therefore we are inclined to reverse the orders of Authorities Below. This ground of assessee’s appeal is allowed. Remission and/or cessation of several accounts comprised u/s 41(1) - HELD THAT:- Certain old creditors are reflecting in the balance sheet of assessee and none of the sundry creditors was written off in the books of account of assessee. In our considered view the income cannot be brought to tax us/ 41(1) of the Act until and unless the trading liability ceased to exist in the books of account. In the instant case the liability of the sundry creditors is very much appearing. Therefore, the question of treating the same as income u/s 41(1) of the Act does not arise. - Decided in favour of assessee.
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