TMI Blog2014 (4) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... payment exceeds the per day limit – Held that:- CIT(A) was of the view that the provisions u/s 40A(3) of the Act provides for certain exception for the application of the provisions - the project undertaken by the appellant was in a remote area and no banking facility was available - If the payment is made in a village or town, which on the date of such payment is not served by any bank, to any person who ordinarily resides, or is carrying on any business, profession or vocation, in any such village or town – the site where the work is being carried out is not served by any bank - Revenue has not placed anything on record suggesting that there was any branch of bank near the place where the payment has been made – thus, there was no infirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f redial Gates for various State Govt. Department and S.S.N.L, as also working on sub-contracts from private parties. The assessee filed its return of income declaring total income at Rs.13,46,814/- and value of fringe benefits of Rs.1,98,159/-. The return was processed u/s.143(1) of the Income Tax Act,1961 (hereinafter referred to as the Act ). Thereafter, the case was picked up for scrutiny assessment and the assessment u/s.143(3) of the Act was framed vide order dated 30/11/2009, thereby the Assessing Officer(AO) made disallowance of Rs.9,12,549/- on account of material purchase and made addition of Rs.1,00,341/- by invoking section 40A(3) of the Act in respect of cash payment exceeding Rs.20,000/- in a single day at one time. Against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant had earned Rs.2,47,14,317/- from contract work and the spent on materials was only Rs.9,12,549/- which is very negligible. Further, the terms of agreement also provides for use/supply of some materials. Again on this learned AO has not given any finding in the Assessment Order. Considering the above, it is clear that the AO had not made a case for justifying such additions. This finding of the ld.CIT(A) has not been controverted by the ld.Sr.DR by bringing any contrary material on record. Therefore, we do not find any infirmity in the order of the ld.CIT(A), the same is hereby upheld. Thus, this ground of Revenue s appeal is rejected. 5. Second ground is against the deletion of addition of Rs.1,00,341/- made by invoking section 40 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he project undertaken by the appellant was in a remote area and no banking facility was available. The nearest petrol/diesel station was about 20 KMs. From the side. The petrol/diesel station does not provide credit facility. In this circumstances, the appellant had no other alternative but to pay I cash for purchase of petrol/diesel. The ld.AR had also supported his contention with relevant case laws. Consdiering the above facts, I am convinced with the submission of the appellant. The AO had missed the point of exception provided in the sec.40A(3) of the Act. The AO is directed to delete the additions made in this ground of appeal. Thus, the appellant gets relief in the ground of appeal. 6.1. Rule 6DD(g) of the Income Tax Rules, 1962, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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