TMI Blog2016 (7) TMI 952X X X X Extracts X X X X X X X X Extracts X X X X ..... d back to the file of the A.O. for fresh adjudication on merits based upon the evidences and explanations filed by the assessee-firm to substantiate and corroborate its pleas which need examination and verification by the authorities below. Accordingly we set aside this matter to the file of the A.O. and direct the A.O. to scrutinize the evidences and explanations filed by the assessee firm and evaluate the attraction of provisions of section 40A(3) of the Act read with exceptions as provided under Rule 6DD of Income Tax Rules, 1962 and de novo redetermine the matter in accordance with law and judicial precedents - Decided in favour of assessee for statistical purpose - I .T.A. No.7515/Mum/2011 - - - Dated:- 13-6-2016 - SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee by Shri Reepal Tralshawala For The Revenue by : Shri Vishwas Jadhav(D.R.) ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee-firm, being ITA No. 7515/Mum/2011, is directed against the order dated 15-06-2011 passed by learned Commissioner of Income Tax (Appeals)- 1, Mumbai (hereinafter called the CIT(A) ), for the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of transportation. During the course of assessment proceedings u/s 143(3) read with Section 143(2) of the Act, the A.O. observed from the cash book that the assessee-firm had made the payment of transportation charges mostly in cash basis to the following parties:- Sr No. Name of the party Amount 1 Shri K.T. More ₹ 8,63,476/- 2 Shri Prashant Shinde ₹ 7,69,183/- 3 Shri Abdul Gharatkar ₹ 3,03,627/- 4 Shri Aman Ghana ₹ 7,14,095/- 5 Shri Dayanhi Khamkar ₹ 7,19,374/- 6 Shri Farooq Arai ₹ 7,38,038/- Total ₹ 41,07,793/- The assessee-firm was asked by the AO to explain the reason for payment made in cash and why disallowance of 20% of such expenses amounting to ₹ 8,21,559/- should not be made u/s 40A(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the assessee-firm, the assessee-firm had paid transportation charges in cash of ₹ 41,07,793/- out of which ₹ 32,91,218/- was made on Sunday under unavoidable circumstances within exceptions provided under Rule 6DD of Income Tax Rules,1962. The assessee-firm submitted that Sunday being the market day, the truck drivers and cleaners insisted cash payments from the truck owners who in turn demand from the assessee-firm and to maintain truck owners to operate regularly for the assessee-firm, cash payments were made to accommodate truck owners in such emergencies and TDS was deducted and paid to Government account on time . The assessee-firm submitted that since the claim of the assessee-firm is covered under exceptions provided under Rule 6DD of Income Tax Rule, 1962, no disallowance u/s 40A(3) of the Act is warranted. In support, the assessee-firm relied upon the following decisions:- 1. Amar Ginning Oil Mills v. ITO, (1989) Taxation 93(4)-76(Chd Trib.) 2. ITAT Madras Bench in the case of Taj Trading Co. v. ITO (1989) 35TTJ (Mad-Trib) 296. 3. Girdharila Goenka v. CIT (1989) 179 ITR 122(Cal.) 4. CIT v. Aloo Supply Co. (1980) 121 ITR 680 (Ori) 5. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel submitted that due TDS was deducted by the assessee-firm and paid into the Government account in time. Confirmations from the parties were filed and the books of account were audited. All the payments are subjected to TDS. The drivers and cleaners asked payments for purchase of petrol/diesel on Sundays , and Sunday being closed holiday for bank, cash payments were made to the transporters. The ld. Counsel relied on the decision of the Ahmedabad Bench of the Tribunal in the case of ACIT v. Shri Nilesh G. Gadhiya in ITA No. 2030/Ahd/2012 for the assessment year 2009-10, orders dated 23rd November, 2012 and also decision of the Delhi Bench of the Tribunal in the case of DCIT v. M/s Continental Carriers of India in ITA No. 3248 3249/Del/2010 for assessment years 2004-05 2005-06 dated 19th August, 2011. The ld. Counsel submitted that genuineness of the transaction is not doubted and requested that the disallowance u/s 40A(3) of the Act should not be made and appeal be allowed. 8. The ld. D.R. submitted that the assessee-firm has not submitted any supporting documents to prove the circumstances under which the payments have been made on Sundays. He relied on the order of lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee on transportation charges paid is shown to be paid in the month of March 2005 for the entire year and it could not be claimed that the tax deducted at source was paid in time within the time limit provided under Chapter XVIIB of the Act, More-over, proof of filing of TDS returns with the Revenue whereby there is complete disclosures with PAN etc of payee s has not been brought on record. The assessee-firm has taken a plea and contended that each payment in a day to the payee s is less than ₹ 20000/- and the case is covered under exception as provided u/r 6DD of Income Tax Rules, 1962 as the individual payment in a day is to be reckoned separately for considering exception u/r 6DD of Income Tax Rules, 1962 and not aggregate payments in a day which is supported by the decisions relied upon by the assessee-firm as set-out above, but the assessee-firm has to bring on record cogent evidences to substantiate the same plea which need examination and verification by the authorities below. It is incumbent for the assessee-firm to bring on record the evidences and circumstances to prove its case that it falls under the exception to Section 40A(3) of the Act provided u/r 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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