TMI Blog2015 (10) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised representatives of the supplier of material cannot be equated with the ‘agents’ referred to in Rule 6DD(k) of Income Tax Rules. The Assessing Officer had not made any addition by applying GP rate by rejecting the books of account of the assessee. It is the case of the assessee that no books of account are maintained. Further, except for the disallowance u/s. 40A(3) no addition has been made by the Assessing Officer in scrutiny assessment. The case of the assessee is entirely on a different footing and no benefit of the case laws relied upon by the ld. Counsel for the assessee can be given. We concur with the findings of the Commissioner of Income Tax (Appeals) confirming the addition made invoking provisions of S. 40A(3). The impugned order is well reasoned and justified, no interference is warranted in the impugned order. - Decided against assessee. Charging of interest u/s. 234A, 234B and 234C is mandatory and consequential (CIT Vs. Anjum M.H. Ghaswala -2001 (10) TMI 4 - SUPREME Court ). - Decided against assessee. - ITA No. 193/PN/2015 - - - Dated:- 4-9-2015 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri M.K. Kulkarni For T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 19-11-2012 informed the Assessing Officer that no books of account are maintained for the period relevant to the assessment year 2010-11. However, the Assessing Officer discovered that the assessee in his profit and loss account has shown sales of ₹ 3,46,11,731/-. In view of sales turnover exceeding ₹ 40,00,000/- per annum, the assessee was required to maintain regular books of account in accordance with the provisions of section 44AA(2) and also should have got the accounts audited in accordance with the provisions of section 44AB. On verification of the documents impounded during survey, it was found that the assessee had made cash payments exceeding ₹ 20,000/- for the purchases from a single party in a day during the relevant period. Majority of the payments were made in cash exceeding ₹ 20,000/- to M/s. Lunkad Brothers, Pune. Apart from M/s. Lunkad Brothers, the assessee had also made cash payments to various other parties exceeding ₹ 20,000/- for purchases in a single day. The Assessing Officer held that the payments have been made in violation of section 40A(3) and the payments made does not fall under any of the exceptions given in Rule 6D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the assessee had filed his return of income on estimate basis. The Assessing Officer accepted the sales figure of ₹ 3,46,11,731/- and the net income returned i.e. ₹ 33,31,410/-. No other addition except u/s. 40A(3) was made. Thus, the estimated income computed by the assessee was accepted. In earlier assessment years i.e. assessment years 2007-08, 2008-09 and 2009-10 ad-hoc additions were made during the assessment proceedings u/s. 143(3) r.w.s. 147 but no disallowance u/s. 40A(3) was ever made. Therefore, disallowance u/s. 40A(3) is uncalled for in the impugned assessment year. To support his submissions, the ld. Counsel for the assessee placed reliance on the following decisions: i. CIT Vs. Banwari Lal Banshidhar; 229 ITR 229 (All.). ii. CIT Vs. Smt. Santosh Jain; 296 ITR 324 (P H). 5. Au contraire Shri B. C. Malakar representing the Department vehemently defended the findings of Commissioner of Income Tax (Appeals) and prayed for dismissing the appeal of the assessee. The ld. DR submitted that the assessee was mainly dealing with M/s. Lunkad Brothers from Pune. The place of business of the assessee is only 90 kms from Pune. It is not the case of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances specified hereunder, namely: xxxxxxxxxx xxxxxxxxxx (k) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person; 8. We are of the considered view that the assessee does not fall within the exception given in Clause (k) of Rule 6DD. It is not the case of the assessee that the assessee or the suppliers of the materials are not having bank account. The exceptions in Rule 6DD are provided to mitigate the situations where, either of the parties to the transaction does not have the benefit of banking facilities or are strained by some exceptional or unavoidable circumstances to deal in cash. Submissions of the ld. Counsel for the assessee that the cash payments were made to the authorised representative who would travel 90 kms for weekly bazzar to the place of assessee to collect orders and the payments of the material supplied is unsustainable. Travelling 90 kms to collect payment certainly cannot be an excuse to make payment in violation of the provisions of the Income Tax Act. As far as agents referred in Rule 6DD(k) are concerned, the authorised representatives of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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