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2018 (9) TMI 865 - ITAT KOLKATAAddition made u/s. 40A(3) - Payment in cash against purchase of liquor by the partner on behalf of the Firm - Held that:- On perusal of order in Ramnagar Pachwai & C.S [2016 (11) TMI 1034 - ITAT KOLKATA] we find that this Tribunal discussed the issue in detail analyzing with various case laws available in the said order and held that cash payments made by the assessee, who is retail vendor to the Principal, Govt. of West Bengal through its wholesale agent. The assessee i.e retail vendor had made payment to the said agent (wholesale licensee) would fall under the exception provided in Rule 6DD(k) of the IT Rules. The assessee’s case falls under the exceptions provided in Rule 6DD(b) and Rule 6DD(k) of the Rules. No hesitation in deleting the disallowance made u/s 40A(3) of the Act in all the years under appeal. Accordingly, the grounds raised by the assessee for all the years under appeal are allowed. Addition on account of alleged purchase out of books of assessee - Held that:- All payments made on behalf of assesse by cheques and TCS amount deducted thereon. It is also observed which is the details of payment made by assesse to said M/s. Bhattacharya Bottling plant Pvt. Ltd. It clearly shows that all the payments were made by cheque from the account of one partner, Shri Sudip Kr. Chatterjee. An amount of ₹ 2,09,070/- was transferred to M/s. Bhattacharya Bottling Plant Pvt. Ltd vide cheque no. 927174. Likewise vide cheque nos. 927175, 927176 & 927177, which are matching with cheque nos. as discussed above in respect of page-32 of the paper book. Therefore, we find force in the submissions of the ld. AR that one of his partner, Shri Sudip Kr. Chatterjee made the payments through his individual account. In our opinion, it cannot be doubted as out of books as viewed by the AO, which confirmed by the CIT-A. Thus, the CIT-A was not justified in confirming the addition made by the AO on this issue. The order of CIT-A is set aside and deleted the addition made by AO. Ground no. 5 raised by the assessee is allowed. Addition on account of undisclosed purchase - Held that:- As contended that Sh. Sudip kr. Chatterjee is an authorized licencee to purchase liquor from IFB Agro Industries, which was not disputed by the AO. In view of above discussion, taking into consideration the submissions of assessee along with documentary evidences placed before us in the paper book from pages 19-27 relating to this issue the addition made by the AO in the hands of assessee does not stand and it is liable to be deleted. Therefore, the order of the CIT-A on this issue in confirming the same is not justified. Thus, the order of CIT-A on this issue is set aside by deleting the said addition made by the AO Disallowance of expenses @ 20% of expenditure - According to AO assessee could not produce any supporting evidence and as such disallowed the same at 20% and added the same to the total income of assessee - Held that:- Before the CIT-A also no substantial evidence was filed by assessee and as such he confirmed the same as disallowed by the AO. Before us also except making submission that bills and vouchers were destroyed during the agitation of local females and as such no evidence or whatsoever proving the same filed before us. The reasons as stated by assessee before us for non submission of any substantial evidence in support of claim of expenditure is not acceptable, as we noted that no books of account were even produced before the AO. In such circumstances, we find no infirmity in confirming the order of AO. Ground of assessee’s appeal is dismissed.
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