TMI Blog2018 (5) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... ering authority; (b) made by way of bearing cheques, since the entries in the bank statement reflects the names of two parties and also because of compelling circumstances of the sellers asking for such payment, then we hold that there is no merit in invoking provisions of section 40A(3)to such transactions. - Decided in favour of assessee. - ITA No. 589/PUN/2017 - - - Dated:- 24-4-2018 - MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM Appellant by : Shri Ajay Modi Respondent by : Shri A.V. Iyyar ORDER PER SUSHMA CHOWLA, JM The appeal filed by Revenue is against order of CIT(A)-2, Nashik, dated 15.12.2016 relating to assessment year 2012-13 against order passed under section 143(3) of the Income-tax Act, 1961 (in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paid in cash to the two sellers. The Assessing Officer issued summons under section 131 of the Act to the said sellers and their statements were recorded on 25.08.2014. Salvi brothers confirmed their signatures and when questioned, whether balance sale consideration of ₹ 19,60,000/- was demanded by them in cash and whether they had any objection to receive entire consideration in cheque, they replied that they had not insisted for payment in cash and they also had no objection for entire payment to receive by cheque. The Assessing Officer thus, disregarded explanation of assessee that sellers had insisted upon payment in cash and disallowed the said amount of ₹ 39,20,000/-, in view of provisions of section 40A(3) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, pointed out that time and again it has been stressed that it is cash payment but in actual fact the payment was made through bearer cheques. Our attention was drawn to the bank statement which is placed at page 21 of Paper Book, wherein on 03.08.2011, two cheques of ₹ 30 lakhs each issued in the name of Dagdu Vitthal Salawi and Badrinarayan Vitthal Salawi were debited and encashed. Further, on 11.08.2011, two bearer cheques in the name of said two persons of ₹ 19,60,000/- each were debited to the bank account of assessee. The learned Authorized Representative for the assessee also drew attention to the declaration placed in Marathi at page 22 of Paper Book, which when signed by Dagdu Vitthal Salawi also bore date as of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said payment was made at the instance of sellers as they were reluctant to get the document registered till the amount was received in totality. In support thereof, the assessee has furnished declaration signed by both the parties on which along with signature date mentioned was 12.03.2012. In the entirety of the above said facts and circumstances, where the payment has been (a) made before registering authority; (b) made by way of bearing cheques, since the entries in the bank statement reflects the names of two parties and also because of compelling circumstances of the sellers asking for such payment, then we hold that there is no merit in invoking provisions of section 40A(3) of the Act to such transactions. Accordingly, we hold so. U ..... X X X X Extracts X X X X X X X X Extracts X X X X
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