Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (11) TMI 1476 - AT - Income TaxReopening of assessment - Disallowance u/s. 40A(3) - whether the site was not purchased by the assessee and that no cash payment made to a single party has exceeded ₹ 20000/ - per day, towards purchase of materials? - Held that:- It is a fact that survey operations were conducted during the financial year itself and the AO came to know that the AOP was doing business from 01-01-2005 and returns were yet to be filed. It is on record that the members purchased the site from their own sources in their individual capacity and formed the AOP to do business. How the payments are to be considered in the hands of the AOP is not explained by the AO, while considering the same for violation of Section 40A(3). Moreover, regarding the so called cash payments under the head construction etc., the same were verified by the AO in the earlier scrutiny assessment and disallowed the entire amount of vouchers which were defective. How the same also can be considered for disallowance u/s. 40A(3) is also not explainable. The earlier assessment order of AO indicates that he has considered the facts and made assessment disallowing certain defective vouchers. Thus, the contentions of present AO while reopening assessment is devoid of merit. The basis of reopening is the record only and there is no failure on the part of assessee. Moreover, not only during survey but also in the course of assessment, the books of account were examined by the AO. So, the argument of AO is that 3CD report is misleading cannot be accepted. In fact, when entries are passed in AOP Books about the capital contribution, the same cannot be considered as payment by AOP for purchase of property, which happened in individual hands of members. Thus, the reopening per se is on wrong appreciation of facts and comes within the purview of change of opinion - Decided in favour of assessee.
|