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2016 (10) TMI 193 - ITAT PUNE

2016 (10) TMI 193 - ITAT PUNE - TM - Addition u/s 40A - payment of expenditure in cash - Held that:- On certain facts available on record such as confirmation of the parties, identity of the payee, payment made by bearer cheques, etc. as noted above. In the present case, we do not find any evidence referred to by the CIT(A) which is formed the foundation for granting the relief. The CIT(A) has merely reiterated the findings given by his predecessors and the ITAT in the earlier year. The question .....

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0A(3) or section 40A(3A) of the Act. Thus, facts of the case, for departure from mandate of section 40A(3) or (3A) requires to be appreciated. In this view of the matter, we restore the matter back to the file of the Assessing Officer for examination of the relevant facts de novo in accordance with law in the light of the ratio laid down by the Co-ordinate Bench of the Tribunal in assessment year 2008-09. Needless to say, assessee shall be afforded proper opportunity of being heard while determi .....

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the assessee is an individual engaged in the business of supply of steel scrap to various re-rolling mills under the name and style of M/s Jafri Steel Traders, Aurangabad. The case of the assessee was re-opened by issuance of notice under section 148 of the Act. In the course of assessment, the assessee was confronted about the violation of section 40A(3) and section 40A(3A) of the Act to the tune of ₹ 1,95,73,979/- and ₹ 95,47,171/- respectively. It was noticed by the Assessing Offi .....

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eals that the entire payment pegged at ₹ 2,91,21,150/- has been made in tranches to only one party namely J. A. Trading Company on various dates during the year. The addition of ₹ 1,95,73,979/- represents purchase on account of scrap in contravention of provision of section 40A(3). Similarly, another amount of ₹ 95,47,171/- represents payment towards sundry creditors outstanding in the preceding year where the payment has been purportedly made in contravention of clause (3A) to .....

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amount to the total income returned by the assessee. 3. Aggrieved by the order of the Assessing Officer, the assessee moved an appeal before the CIT(A). The CIT(A) primarily relied upon his predecessor CIT(A) relevant to assessment year 2008-09 and the order of the Co-ordinate Bench of the Tribunal thereon dated 28.12.2012 and also the decision of the Hon ble Gujarat High Court in the case of Anupam Tele Services vs. ITO, 222 taxman 318 to come to the conclusion that the Assessing Officer was no .....

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in the assessee own case for A.Y.2008-09 and Hon'ble Gujarat High Court in the case of Anupama Tele Services Vs ITO(2014) 222 Taxman 318, when the assessee has failed to prove the business expediency and any other relevant factor which forced him to make payment otherwise by cross cheque or DD. 2. Whether on the facts and in the circumstance of the case, the learned Commissioner of Income tax (Appeals), Aurangabad was correct when the assessee has not proved the identity of the payee. 3. In .....

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stances of the case the appellant craves leave to add amend or alter any grounds of Appeal. 5. The Ld. Departmental Representative (DR) for the Revenue Shri Hitendra Ninawe contended that the assessee has not given reference to any fact which reveals business expediency and any other relevant factor which forced him to make payment otherwise than by cross cheque or DD. The Ld. DR contended that none of the judicial precedents can be applied in the absence of basic facts available on record. The .....

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ds with the provisions of the Act. He therefore contended that the relief granted by the CIT(A) is totally uncalled for and contrary to the facts on record. The Ld. DR also relied upon the decision of the Hon ble Kerala High Court in the case of MRS Roadways vs. CIT, (2014) 52 taxmann.com 99 (Kerala) relevant to assessment year 2009-10 wherein it has been held that only in instances where the assessee falls under any of exemptions covered in Rule 6DD of the Income Tax Rules, 1962, the assessee i .....

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rose in the assessee s own case relevant to assessment year 2008-09 where the CIT(A) granted relief to the assessee and the appeal of the Revenue was dismissed by the Tribunal in ITA No.1143/PN/2011, order dated 28.12.2012. He accordingly pleaded that no interference with the order of the CIT(A) is called for. 7. We have carefully considered the rival submissions and perused the material placed on record. We find that the Co-ordinate Bench of the Tribunal had an occasion to deal with the identic .....

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placed his heavy reliance on the decision of the ITAT Bangalore Bench in the case of Sri. Renukeshwara Rice Mills v. ITO, 93 ITD 263 (Bang.). Rules 6DD has undergone amendment from the A.Y. 2009-10. So far as the decision in the case of Sri. Renukeshwara Rice Mills (Supra) is concerned, the said assessee was in the business of Rice Mills. The assessee purchased the rice from the Agriculture Produce Committee and deposited the amounts by preparing the challan & cash was deposited in Bank Acco .....

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s that as per the evidence in form of copies of the bank cheques obtained from the concerned bank, all the respective parties have put their seals and signatures on said cheques for getting payments and that shows that the payments are received by the payees only. Moreover, assessee also demonstrated the genuineness of the payments by filing the ledger extracts of the said parties in their books of account and payment of VAT was also confirmed. This has not been controverted before us. We also f .....

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