9911796707
TMI Blog2016 (5) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... a Cellular Company and is stated to have maintained regular books of account consisting of cash books, ledgers, vouchers and accounts are audited under section 44AB of the Act. 3. During the course of assessment proceedings, on having perused the books of accounts, the Assessing Officer (for "AO") noticed that the assessee has debited huge expenses of Rs. 3,32,22,178 on account of purchase of diesel and on a further enquiry about the details of purchases of the aforesaid diesel, it was noticed by the Assessing Officer that the assessee had made payment in cash exceeding Rs. 20,000 to various suppliers throughout the State and the cash purchase through the said suppliers was Rs. 2,40,85,381. The assessee also claimed cash payment of Rs. 29, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment was made in utter violation of the provisions of section 40A(3)(a) and thus the Assessing Officer was well justified in disallowing the said amount. The assessee was well aware that violation of section 40(A)(3)(a) entails total disallowance and despite the same, it made cash payments and therefore, the addition was well justified by the Assessing Officer and has wrongly been deleted by the Tribunal. He relied upon the judgment rendered by the Kerala High Court in the case of MRS Roadways v. CIT [2014] 367 ITR 62 (Ker) and contended that the Kerala High Court in identical circumstances in a case of a transporter has held that provisions of section 40A(3) are applicable and contended that substantial question of law arise out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew, the Tribunal has come to a correct finding that transaction, if any, was not by cash so as to come within the purview of provisions of section 40A(3)(a). The Tribunal alternatively has also held that the case of the assessee falls under the exception clause of rule 6DD(k) as the assessee has made the payment to the bank account of the agents who were required to make payment in cash for buying petrol and diesel at different locations. 7. For ready reference, it would be appropriate to quote section 40A(3)(a) and rule 6DD which reads ad-infra : "S. 40A.(3)(a) Where the assessee incurs any expenditure in respect of which payment is made in a sum exceeding twenty thou sand rupees otherwise than by an account payee cheque drawn on a bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y learned counsel for the appellant, the facts are distinguishable as the Kerala High Court found that even the appellate authority found that the said assessee was engaging lorries on hire from the market through brokers ; the assessee was not paying any amount to the concerned lorry owners and even according to the assessee lorry freights are finalised with the lorry owners and such lorry owners cannot be considered as the agents of the assessee and since the assessee is neither the owner of the goods nor the owner of the vehicle carrying the goods, therefore, the assessee did not fall within the exemptions covered in rule 6DD and found that no substantial question of law emerge and accordingly dismissed the appeal. The facts, as noticed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to regulate business transactions and to prevent the use of unaccounted money or reduce the chances to use black money for business trans actions." 11. The aforesaid observation does apply in the instant case. The Assessing Officer on the facts noticed has been unable to make out a case of involvement of unaccounted money. 12. It is also a finding of fact recorded by the Commissioner of Income-tax (Appeals) that copies of the ledger accounts were produced before the Assessing Officer who has not found any discrepancy in such books of account and no unaccounted transaction has been reported/noticed by the Assessing Officer. 13. Taking into consideration the above factors, in our view, the finding arrived at by the Tribunal is essentially ..... X X X X Extracts X X X X X X X X Extracts X X X X
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