TMI Blog2014 (11) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... aggregate of the payment made to these parties are mentioned - The individual payment to a large extend are within the limit prescribed u/s 40A(3) – FAA has gone through the statement of facts and recorded a finding that the assessee failed to substantiate the claim – Decided in favour of assessee. - ITA No. 1392/Bang/2012, ITA No.1462/Bang/2013, ITA No.1409/Bang/2013 - - - Dated:- 31-10-2014 - Shri Rajpal Yadav And Shri Abraham P. George,JJ. For the Petitioner : Ms. Priscilla Singsit, (DR) For the Respondent : None ORDER Per Rajpal Yadav, J.M. ITA No.1392/Bang/2012 has been directed at the instance of the Revenue against the order of the learned CIT (A), dated 17/08/2012 passed in assessment year 2009-10. Against the order of the learned CIT (A) dated 16.07.2013, passed on the appeal of M/s Mohitsham Complexes (P) Ltd, in assessment year 2009-10, the assessee and Revenue are in cross appeals. 2. ITA No.1392/Bang/2012 is on Board since 10.06.2013. It has been listed almost on 15 occassions, out of that on 4 occassions, the Bench did not function. The learned Counsel for the assessee has filed an application for adjournment on the ground that h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied out in the group of M/s Mohitsham Complexes (P) Ltd u/s 132 of the Income Tax Act on 13.02.2009. The assessee has filed its return of income for assessment year 2009-10 on 30.09.2009 declaring total loss of ₹ 16,57,302/-. The case of the assessee M/s Mohitsham Estates (P) Ltd was taken up for scrutiny assessment and a notice u/s 143(2) was issued on 17.05.2010. The learned Assessing Officer on an analysis of page No.85 of the seized document No.A/MCPL/88 dated 13.02.2009 observed that this page contains the details of expenses incurred in cash by the assessee as on 31.01.2009. Assessing Officer thereafter considered pages No.80 84 of this seized file and confronted the assessee that it had made payment of ₹ 1,09,09,277/- in cash, in violation of provisions of section 40A(3). According to the Assessing Officer, section 40A(3) contemplates that where the assessee incurs any expenditure in respect of which a payment or aggregate of payment made to a person in a day, otherwise than by an account payee cheque, drawn on a Bank, or account pay bank draft exceeds ₹ 20,000/-, no deduction shall be allowed in respect of such expenditure. Therefore, these expenses are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt Ltd has agreed to invest a particular amount. In consideration for their investment by M/s Mohitsham Estate Pvt Ltd, M/s. Mohitsham Complexes Pvt Ltd (MCPL) shall take up the entire project develop it and promote it. They shall be responsible for the contracts, construction and shall bear the investment cost of the project and they shall make all miscellaneous expenses of the project. Therefore, it is very clear that M/s Mohitsham Estate is a company which has just made investments and all the expenses regarding projects undertaken in regard to the Memorandum of understanding has been done by M/s Mohitsham Complexes. Therefore, as far as M/s Mohitsham Estates are concerned, there are no investments, no P L a/c has been drawn, no expenditure have been claimed and therefore, disallowance of expenses u/s 40A(3) in the hands of M/s Mohitsham Estate to the tune of ₹ 1,09,09,277/- is not correct and is accordingly deleted . 8. The learned CIT (DR) contended that this memorandum between the assessee and M/s. Mohitsham Complexes (P) Ltd was not produced before the Assessing Officer. It was produced before the CIT (A). Learned CIT (A) failed to provide opportunity of hearing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the assessment or penalty (whether on his own motion or on the request of the [Assessing Officer]) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271.] 10. On a bare perusal of this Rule would suggest that Sub Rule-1 puts an embargo upon the assessee to seek permission for producing additional evidence either oral or documentary. Such evidence can only be permitted to be produced, if conditions enumerated in sub clause a to d are available. The learned Commissioner has to record in writing as to why she had admitted the additional evidence. Sub Rule-3 contemplates that if additional evidence is taken on record, then it cannot be considered on merit, unless an opportunity to the Assessing Officer is being given to comment the evidence or documents or to cross examine the witness produced by the assessee. Apart from that the learned Assessing Officer would be given an opportunity to produce any evidence or documents or any evidence in rebuttal of the additional evidence produced by the assessee. Sub Rule-4 is an exception to all other sub rules. This rule authorizes the CIT (A) to direct any part for production of any documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2013 14. The grievance of the assessee is that the learned CIT (A) has erred in confirming the addition of ₹ 4,36,180/- which was added by the Assessing Officer with the aid of section 40A(3) of the Income Tax Act. The brief findings of the learned CIT (A) on this issue read as under: 3. The grounds Nos. 1 2 relate to the disallowances u/s 40A(3) made of ₹ 4,36,180/- as detailed at Para 3 of the assessment order. The expenses so claimed have been debited to the P L a/c and payments are in cash in excess of the amounts allowed under the Income Tax Act as detailed in the assessment order. However, the appellant has claimed that certain expenses totaling ₹ 2,78,030/- are below ₹ 20,000/- and therefore, should not be disallowed u/s 40A(3) and that the disallowance should be restricted to ₹ 1,58,150/- only. The appellant has however been unable to show that the payments referred to are below ₹ 20,000/- per day as claimed by it. Therefore, I am unable to allow any relief on this account . 15. The assessee has not filed any statement of facts before the Tribunal, nor filed any paper book. We have perused the statement of facts filed before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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