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2022 (9) TMI 1079 - AT - Income TaxRevision u/s 263 - Disallowance u/s 40A(3) - Payments in cash exceeding the permisiable limit - HELD THAT:- AO observed that the payments have been made exceeding Rs. 20000/- in cash on single day, and no explanation has been offered by the assessee, which led AO to invoke provisions of Section 40A(3) and cash payments towards labour payments, stood added to the income of the assessee passed by AO u/s 143(3) read with Section 263 - CIT(A) has given erroneous finding that the books of accounts were produced by the assessee before the AO. Infact no vouchers, invoices, cash book, books of accounts were produced, and merely ledger accounts were produced and that too were changed by assessee in assessment proceedings conducted in consequences to revisionary order passed by ld. Pr. CIT u/s 263. The assessee is claiming deduction towards material purchases and labour payments from its income chargeable to tax, and thus the onus is on the assessee to bring on record cogent material to substantiate the same as well that compliances of statutory provisions such as Section 40A(3) were made, before being allowed deduction by Revenue. No infirmity in the order of the Assessing Officer , the ld. CIT(A) has misdirected itself by applying net profit rate , despite the assessee having admitted to have cash payment in violation of Section 40A(3) and the case also does not fall under exceptions as are provided in Rule 6DD of the 1962 Rules. The appellate order passed by ld. CIT(A) cannot be sustained and is reversed and the assessment order passed by the AO is confirmed so far as additions disallowance u/s. 40A(3) with respect to material consumed and labour payments are concerned. This disposes of ground number 2 and 3 raised by Revenue in its memo of appeal filed with tribunal , which stood allowed. Ground concerning disallowance of depreciation is not adjudicated by ld. CIT(A) - rectification of mistake - HELD THAT:- The assessee filed its first appeal with CIT(A), and in case if the ground no. 6 raised by assessee concerning disallowance of depreciation is not adjudicated by CIT(A), the assessee stood prejudiced and it is not shown that the assessee has come in an appeal before tribunal to seek redressal of its grievance, nor it could be shown that C.O. is filed by the assessee being aggrieved by the decision of CIT(A) in not adjudicating ground number 6 concerning disallowance of depreciation - But, however, it is observed that while reproducing grounds of appeal number 6 raised by the assessee bfore ld. CIT(A) , it was erroneously typed as Rs. 33,75,200/- instead of Rs. 3,37,520/-in the appellate order passed by ld. CIT(A), which is a mistake apparent from record , which we direct to correct the same at page number 2 of the appellate order passed by ld. CIT(A). To the extent of correcting aforesaid mistake apparent from record, we modify the order of ld. CIT(A) concerning this ground number 4 raised by Revenue before tribunal. This ground is partly allowed in favour of Revenue.
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