9911796707
TMI Blog2014 (1) TMI 1847X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of law revealed in Tax Appeal No.15 of 2014 shall be referred. Assesse-respondent filed return of income declaring total income for the assessment year 2006-07 at Rs. 5.98 lacs (rounded off). The firm of the assesse is dealing and trading in purchase of cotton, cotton seeds, processing of cotton seeds and extracting cotton seeds oil, etc. A survey was carried out under section 133A of the Act of the business premises of the assesse. During the course of survey, physical stock was taken containing various items like cotton seeds, cotton bales, cotton cakes, etc. It was also noted that certain scrap materials were not recorded in the books of accounts. The assesse also purchased raw cotton either directly from agriculturists or from com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the authorities below. We find that during the course of appellant proceedings, additional evidences were filed, on which the ld. CIT(A) has sought report from the AO. The AO in the remand proceedings made inquiries and has reported back to the ld. CIT (A) that the factum of purchases and payment in cash has been admitted by the farmers. It is observed by the ld. CIT(A) that verification of each and every case in cash exceeding Rs. 20,000/- was neither practical nor was done by the AO due to number of such cases being very large. It is undisputed that during the survey proceeding partner of the assesse-firm has admitted in the statement that the purchases were also made through commission agents, and he has disclosed all additional inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 15 lakhs admitted by the assesse as liable for disallowance u/s 40A(3) of the Act?" We have heard learned counsel Mr. Parikh for the Revenue and with his assistance examined the material on record. We are of the firm opinion on due consideration that these Tax Appeals deserve no consideration inasmuch as essentially both the authorities have concurrently held in favour of the respondent-assesse based on the factual matrix presented before them. Section 40A(3) dissuades transactions otherwise than by account payee cheque/draft when payment of expenditure exceeds the sum of Rs. 20,000/- by disallowing any deduction in respect of such expenditure. However, when payment is made for purchase of agricultural or forest produce or the produ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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