TMI Blog2017 (5) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer has taken a conscious decision not make disallowance u/s 40A(3) after examining the ledger account of Baba Hardasmal Communication Pvt. Ltd. is not correct. Since books of account of the assessee clearly show payment in excess of ₹ 20,000/- to a person on a single day, necessarily the same has to be disallowed u/s 40A(3) of the Act, unless the assessee is able to prove that it comes within the mitigating circumstances prescribed under Rule 6DD of the I.T. Rules 1962. Since assessee does not have a case that the cash payment exceeding ₹ 20,000/- is exempt by virtue of the situation enumerated in Rule 6DD of the I.T. Rules 1962, we are of the view that CIT is justified in passing revisionary order u/s 263 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was found that you have paid in cash amount exceeding ₹ 20,000/- in a day on purchase made from M/s Baba Hardasmal Communication Pvt. Ltd. These amounts being paid in contravention of Section 40A(3), were disallowable. The total such cash payment made to Baba Hardasmal Communication Pvt. Ltd. was ₹ 3,10,977/-. The same was required to be added back to the total income but the assessing officer failed to do so. 4.1 In reply to Section 263 of the Act, assessee contended that it had not made any cash payment more than ₹ 20,000/- in a single day to Baba Hardasmal Communication Pvt. Ltd. Assessee also filed confirmation from the above said party. It was further contended that mistake was committed by the accountant while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the other hand, strongly relied on the order of the CIT passed u/s 263 of the Act. It was submitted by the Ld. DR there is no application of mind by the Assessing Officer while passing order u/s 143(3) of the Act, regarding cash payment exceeding ₹ 20,000/-, hence, it was submitted that the assessment order is erroneous and prejudicial to the interest of revenue warranting interference u/s 263 of the Act. 6. We have heard the rival submissions and perused the material on record. The assessee in the course of proceeding u/s 263 of the Act, had produced the books of account, which clearly show that there are cash payments made to Baba Hardasmal Communication Pvt. Ltd. exceeding ₹ 20,000/- on a single day. Since cash payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer calling for the details of the payments made to Baba Hardasmal Communication Pvt. Ltd., hence, the contention of the assessee before us that the Assessing Officer has taken a conscious decision not make disallowance u/s 40A(3) of the Act, after examining the ledger account of Baba Hardasmal Communication Pvt. Ltd. is not correct. Since books of account of the assessee clearly show payment in excess of ₹ 20,000/- to a person on a single day, necessarily the same has to be disallowed u/s 40A(3) of the Act, unless the assessee is able to prove that it comes within the mitigating circumstances prescribed under Rule 6DD of the I.T. Rules 1962. Since assessee does not have a case that the cash payment exceeding ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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