TMI Blog2015 (9) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... some times was done in the late evenings and since the payments on account of Hamali Charges were required to be made by the concerned contractor to Hammals immediately after the completion of the work, he demanded payments in cash which the assessee was compelled to make. - In our opinion, this stand taken by the assessee before the Ld. CIT(A), which was duly supported by cogent evidence in the form of confirmation certificate issued by the concerned contractor, is sufficient to show that the impugned payments in cash were made by the assessee in the exceptional circumstances as specified in Rule 6DD of the I.T. Rules, 1962 and therefore, no disallowance under section 40A(3) is called for such cash payments.- Decided in favour of assessee. - ITA. No. 900/Hyd/2014 - - - Dated:- 5-6-2015 - P. M. Jagtap, AM And Saktijit Dey, JM, JJ. For the Appellant : Mr P Raviseshagiri Rao For the Respondent : Mr R Clement Ramesh Kumar ORDER Per P. M. Jagtap, AM. This appeal filed by the assessee is directed against the order of the Ld. CIT(A)-18, Mumbai dated 04.02.2014. 2. Ground Nos. 1 and 4 raised by the assessee in this appeal are general in nature which do not cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the explanation offered by the assessee as above. According to him, the entire short fall of 1122.45 quintals was in respect of a single supply made by the assessee to M/s. BEL Limited under Bill No.20 dated 02.05.2004 and the percentage of the said short fall thus was substantially higher at 4.8% and not 0.57% as claimed by the assessee. He held that the said short fall claimed by the assessee in respect of sales effected to PEC Limited in addition to the shortage of 1117.74 quintals claimed in respect of purchase was quite unreasonable and accordingly, the deduction claimed by the assessee on account of such shortage to the extent of ₹ 7,01,536 was disallowed by him in the assessment completed under section 143(3) vide order dated 27.12.2007. 4. Against the order passed by the A.O. under section 143(3), an appeal was preferred by the assessee before the Ld. CIT(A) and the following submission was made on its behalf before the Ld. CIT(A) in support of the claim for shortage in the supply of goods made to M/s. PEC Limited. During the financial year relevant to the A. Y. 2005-06 the appellant sold maize in his regular course of business to the tune of ₹ 25, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., Visakhapatnam which was claimed at a substantially higher rate of 4.8%. On the other hand, the AR of the appellant has submitted that the AO. has disallowed the shortfall of 1,122.45 quintals on account of moisture content by holding it at a very higher side and made addition of ₹ 7,01,536/- is not as per the facts of the case. From the perusal of the submissions and facts, it is clear that the assessee has claimed moisture loss on purchase @ 0.57% which was allowed by the AO., but again the assessee has claimed the shortage on account of moisture content at a very higher rate of 4.8% sold to M/s. PEC Ltd. No reason for claiming the moisture content @ 4.8% was given nor any evidence was submitted before the AO. to prove that how the entire shortfall of 1,122.45 quintals was claimed in a single bill No. 20 dated 0205.2004 sold to M/s. PEC Ltd. Since onus is on 'the assesses to submit complete details and evidence before claiming any deduction, but in the present case, no evidence was submitted for claiming moisture content deduction @ 4.8% in place of 0.57% shortfall claimed on the purchases. Thus, the assessee has failed to discharge its onus, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be said by any stretch of imagination that once the assessee has claimed shortage at the time of purchase, he cannot claim shortage at the time of sales. In the present case, the claim of the assessee for shortage at the time of sale was duly supported by the certificate issued by the concerned customer confirming the shortage and the Ld. CIT(A) in our opinion was not justified in confirming the disallowance made by the A.O. on account of such shortage. We, therefore, set aside his impugned order on this issue and direct the A.O. to delete the addition made on account of shortage. 6. The issue raised in ground No.3 relates to the disallowance of ₹ 1,49,242 made by the A.O. under section 40A(3) of the Act which is confirmed by the Ld. CIT(A). 6.1. During the course of assessment proceedings, it was noticed by the A.O. that payments in cash exceeding ₹ 20,000 were made by the assessee to one Mr. K. Narendra Babu on account of Coolie charges aggregating to ₹ 7,47,120. Since the said payments were made on regular basis and some other payments were made by the assessee to the concerned party through cheques, the A.O. was of the view that the impugned paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,120/- to one Shri Narendra Babu. Accordingly, show cause notice was issued, to the assessee to explain why the provisions of Sec.40A(3) may not be invoked. In response to this, the AR of the appellant has submitted that the cash payments were made because of business contingency. The A.O. has not accepted the contention of the appellant and applied provisions of Sec. 40A(3) and made addition of ₹ 1,49,424/- being 20% of the cash payments. On the other hand, the AR of the appellant has submitted that the assessee has debited a sum of ₹ 19,53,528/- to the profit loss account under the head Kanta Cooli Account. The A.O. has disallowed ₹ 1,49,242/- under section 40A(3) being 20% of cash payments of the loading and unloading charges were paid to Railway License Hamalis for unloading maize from lorries and loading the same into wagons. Since this payment was not made in cash to each and every person, therefore, the collective payment was made to Shri K. Narendra Babu, authorized agent of the assessee. It was argued that the cash payment was made for business purposes, therefore, it should not have disallowed u/s 40A(3) of the I.T. Act. From the perusal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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