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2015 (10) TMI 1893 - ITAT BANGALORE

2015 (10) TMI 1893 - ITAT BANGALORE - TMI - Disallowance u/s 40A(3) - assessee has filed the ledger extract of M/s Someshwara Fertilizers & Chemicals Ltd., and further argued that the AO and the CIT(A) were not justified in rejecting the books of assessee u/s 143(3) on the presumption that the entries in the books of assessee are not matching with the ledger extract of the said company i. E M/s Someshwara Fertilizers & Chemicals Ltd.- Held that:- Under these circumstances, when there is lack of .....

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3(B)/2015 - Dated:- 26-8-2015 - SMT. ASHA VIJAYARAGHAVAN, JM (SMC) For The Assessee : Shri Narendra Sharma, Advocate For The Revenue : Dr. P.K.Srihari, Addl.CIT ORDER PER SMT ASHA VIJAYARAGHAVAN, JM: This appeal by the assessee is directed against the order of CIT(A), Mysore, dated 17-10-2014 for the assessment year 2008-09. 2. The issue in this appeal is regarding disallowance u/s 40A(3) of the IT Act, 1961. The AO in his assessment order, held as follows; 2. On perusal of ledger accounts, asse .....

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ing in books of assessee, which is duly certified by Sri Someshwara Fertilizers & Chemicals. In order to verify the genuineness of the ledger account produced summons was issued to Sri Someshwara Fertilizers & Chemicals on 26-07-20010 to produce their cash book and ledger. Since there was no response to summons, a letter was also issued to said company on 23.09.2010 to comply by 01.10.2010. There was no compliance to this letter also. 2.1 Survey action u/s 133A was conducted by ACIT, CIr .....

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as received from assessee on 31-03-2008 but not cleared. Thus, the ledger extract of said company as per books of accounts maintained by assessee was totally different from ledger maintained by Sri Someshwara Fertilizers & Chemicals found during the course of survey. As per ledger extract produced by assessee on each occasion cash payment made is less than ₹ 20,000/- and there is no entry regarding payment of cheque but, as per ledger obtained from company during the survey, cash paym .....

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ara Fertilizers & Chemicals as appearing in the assessee s books and certified by Sri Someshwara Fertilizers & Chemicals Ltd., on 05-07-2010 which is before the date of survey on 08-10- 2010. The AO did not accept the contention of the assessee for the following reasons; - Any business man would obtain receipts for any payments in cash from the supplier as and when it is paid. - As per the books of Sri Someshwara Fertilizers & Chemicals found at the time of survey it was evident that .....

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6DD since the rule 6DD(j) which provided for exclusion of payments made in exceptional circumstances when genuineness is proved, has been deleted w. E. F.1996. The CBDT s Circular cited supra, explains the reasoning for deletion of Rule 6DD(j). With these observations the AO made the addition of ₹ 3,04,100/- by disallowing this amount u/s 40A(3) . 3. Aggrieved assessee preferred appeal before the CIT(A). 4. On appeal before the CIT(A), it was argued by the learned counsel for the assessee .....

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0A(3) by splitting the payments because on each day of the payments the assessee did have sufficient cash balance and this is admitted by the assessee also and the evidences clearly show that the recipient has received more than ₹ 20,000/- on each occasion and issued cash receipts as such. According to CIT(A), this has surfaced on account of survey in the case of the recipient, but for which the assessee could have sailed through with the entries. The CIT(A) further noted that the assessee .....

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rdingly, the addition was confirmed. 5. Aggrieved, the assessee is in appeal before the Tribunal. 6. The assessee has filed at page-6 & 7 of the paper book, the opening cash balance, as per cash book and the payments made to M/s Someshwara Fertilizers & Chemicals which are tabulated as under; Date Opening Cash balance Rs. Amount paid Rs. 21/08/2007 478600 19500 23/08/2007 414405 19500 30/08/2007 495555 13050 05/02/2007 254922 19500 06/02/2008 235422 19000 07/02/2008 222047 19000 09/08/20 .....

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