TMI Blog2015 (4) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... nd transporters once the assessee books the trucks for the purpose of the purchases outside Maharashtra. If all these details have been verified and examined by the AO, then it cannot be held that AO has not made any enquiry or verified the evidences. Here in this case, the Ld. CIT has not pointed out that there is any actual violation of section 40A(3) as per the law prevalent in the A.Y. 2007-08. Prior to A.Y. 2009-10, section 40A(3) provided that, where the assessee incurs any expenditure in respect of which payment is made for sum exceeding ₹ 20,000/-, then no deduction shall be allowed. The statute did not envisaged that the aggregate amount of payments made to a person on a day should exceed ₹ 20,000/-. This specific amendment has been brought in the statute w.e.f. 01.04.2009. This proposition that no disallowance u/s 40A(3) should be made if the payment at a time is less than prescribed limit, is fully supported by decision of Hon’ble Allahabad High Court in the case of Ashok Iron and Steel Rolling Mills [2009 (10) TMI 414 - ALLAHABAD HIGH COURT] and decision of Orissa High Court in the case of Aloo Supply Company [1979 (12) TMI 60 - ORISSA High Court]. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(2). During the course of the assessment proceedings, the assessing officer had noted that assessee had shown purchases of ₹ 29,80,08,189/-, as against the purchase of ₹ 12,82,17,861/- in the immediately preceding year. The said purchases also included the transport expenses. The assessing officer required the assessee to furnish the ledger account of the parties to whom transportation charges were paid. On the perusal of the same he noted that, 75% of the total transportation charges was paid in cash. He also noted down the list of the parties to whom cash amount was paid, which was illustrated in the following manner:- Link Road Carrier Cash 25450 Sohal Transport Co. Cash 2347409 Kaka Transport Co. Cash 217466 New Bombay Patiala Transport Co. Cash 26512 Chawla Transport Co. Cash 118500 Okara Roadways Cash 297192 Maharashtra Gujrat Toad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven in the tax audit report with a qualification that there is no violation of section 40A(3). It was also explained before the AO that no payment was made to the transporters at a time in excess of ₹ 20,000/- in cash. In fact some payments were also made through cheques. The entire matter of transport charges and cash payment was examined, aspect including the books of account, bills and vouchers and explanation thereof. It was also explained before CIT that, most of the purchases of the assessee company is from outside Maharashtra, therefore, the assessee company used to make payment to the truck owners or the driver at the time of taking the delivery of goods as they insisted upon cash payment for incurring the transportation expenses like diesel, food etc. It was also submitted that the legal position of section 40A(3) as it stood the A.Y. 2007-08 was that, if the payment of a cash is less than 20,000/-, then no disallowance is called for. The aggregate payment of ₹ 20,000/- in a day has been brought in the statute w.e.f. 01.04.2009, i.e. A.Y. 2009-10 and for the prior assessment years, if the payment at a time is less than 20,000/- then it was not a breach of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regarding each and every payment to show that none of the payments have exceeded sum of ₹ 20,000/- at a time. [The details in this regard are appearing at pages 41 and 42 of the paper book]. In support of his contention, he drew our attention to the copy ledger account of all the parties submitted during the course of the assessment proceedings including bills and vouchers to demonstrate that none of the payment exceeded 20,000/-. [These details are appearing from pages 43 to 106 of the paper book]. Thus, when these details have been furnished before the AO which has been specifically examined by him, then Ld. CIT under revisionary jurisdiction u/s 263 cannot hold that the assessment order is erroneous in law or prejudicial to the interest of the revenue. In support of his contention that prior to A.Y. 2008-09, the provision of section 40A(3) will not apply if the payment at a time does not exceed ₹ 20,000/- and the amendment brought in section 40A(3) will not apply retrospectively, he strongly relied upon decision of the Allahabad High Court in the case of CIT Vs. Ashok Iron Steels reported in 320 ITR page 101. He also referred to other catena of decisions on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee books the trucks for the purpose of the purchases outside Maharashtra. If all these details have been verified and examined by the AO, then it cannot be held that AO has not made any enquiry or verified the evidences. If on verification the assessing officer has taken a view, then same cannot be substituted by the CIT, that disallowance should have been made excess by applying different provision, unless there is a categorical finding by the CIT that the view taken by the assessing officer or his opinion is unsustainable in law. This has to be demonstrated from the facts and material on record by the CIT. Here in this case, the Ld. CIT has not pointed out that there is any actual violation of section 40A(3) as per the law prevalent in the A.Y. 2007-08. Prior to A.Y. 2009-10, section 40A(3) provided that, where the assessee incurs any expenditure in respect of which payment is made for sum exceeding ₹ 20,000/-, then no deduction shall be allowed. The statute did not envisaged that the aggregate amount of payments made to a person on a day should exceed ₹ 20,000/-. This specific amendment has been brought in the statute w.e.f. 01.04.2009. This proposition tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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