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TMI Blog2018 (3) TMI 1749X X X X Extracts X X X X X X X X Extracts X X X X ..... the correct facts and figures and were contrary to the earlier wrong statement furnished by the accountant. 3. There being no violation of the provisions of section/40(A)(3) it is prayed that the addition made may kindly be deleted. 2. The relevant facts in this case are that the assessee's return was picked up for scrutiny assessment through CASS wherein addition of Rs. 24,77,000/- was made u/s 40A(3). The addition was challenged in appeal before the CIT(A) unsuccessfully. Aggrieved by the order, the assessee is in appeal before the ITAT. 3. The ld. AR inviting attention to the assessment order submitted that the AO in the course of assessment proceedings required the assessee to explain payments made in cash stated to be in contravention of Rule 40A(3). The assessee in his reply at the first instance stated that there was an error on the part of the Accountant who while submitting the details had submitted wrong figures in the copy of account of M/s Spun Pipe Co. Pvt. Ltd. and in support of the said claim, copy of the account of the assessee in the company of M/s Chandigarh Spun Pipe in the name of M/s Nangal Spun Pipe Company were relied upon. Inviting attention to page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,11.2011 cash 60,000/- 17. 18.11.2011 cash 60.WO/- 18. 01.12.2011 cash 64,000/- 19. 04.01,2012 cash 25,000/- 20. 12.01.2012 cash 1,60,000/- 21. 01.02.2012 Cash 1,50,000/- 22. 14.02.2012 cash 4,50,000/- 23. 02.03.2012 cash 2,00,000/- 24. 07.03.2012 cash 2,00,000/- 25. 26.03.2012 Cash 50,000/- Total Rs. 24,77,000/- 5.2 This fact was confronted to the assessee and, though the assessee was represented through counsel, frequently time was sought on various dates. These specific details are noted in page 11-12 of the assessment order. Finally on 20.03.2015 the reply of the assessee which is extracted in page 12-13 of the assessment order was made available. A perusal of the same shows that the assessee primarily stated that there was some mistake committed by the Accountant and the copy of the assessee's account in the books of M/s Chandigarh Spun Pipe alongwith the affidavit of the Accountant were relied upon. The ld. AR in the course of his arguments has primarily relied upon this reply. A perusal of the assessment order shows that the said reply supported by an affidavit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal of the assessee is dismissed. For ready reference, relevant finding Amount paid in contravention of section 40 A(3) and its Entries with voucher numbers in which vouchers no, in the copy of account submitted on ethnetr y has been split-up in the changed 23.12.2014 of account of Chandigarh Spun Pipe Co. submitted on 20.02.2015 of the CIT(A) upholding addition made in the assessment order upheld in the present proceedings is reproduced hereunder : 5. On going through the entire set of facts of the case, the arguments put forth by the Assessing Officer and that of the appellant, I am of the opinion that addition has been correctly made by the Assessing Officer. The appellant produced one set of copy of accounts before the Assessing Officer and on being pointed out the defects which could lead to an addition u/s 40(A)(3) submitted a second set of accounts. The arguments put forth by the Assessing Officer have considerable merits. It would be worthwhile to read through the verbose arguments of the Assessing Officer and hit the crux of the matter and to attempt a summary of Assessing Officer's arguments as below: (i) When the original and the revised copy of accounts are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lit and moved to 14.05.2011 to17.05.2011 and 18.05.2011 to 20.05.2011 respectively. This argument of the appellant that the accountant consolidated these entries cannot be believed. If any prudent man would add up smaller figures to make a consolidated figure of Rs. 2,70,QOO/- then the next consolidated entry should appeared after the last unconsolidated entry which was part of the first consolidated entry. For example, if unconsolidated entries are in the order Rsl, Rs. 2, Rs. 3 and Rs. 4 and they are consolidated into two groups then consolidated entries would appear as Rs. 3 (1+2) Rs. 7 {3+4) in that order. While consolidating the order of entry would not be disturbed. In this case it is not consolidation but splitting. The account statements would clearly illustrate this. Original Entry Revised Entry Cumulative Entry 27.04.2011 Cash Payment 19 Rs. 2,70,000 12.04.2011 - Rs. 19,000 1 Rs. 19,000 28.04.2011 - Rs. 17,000 2 Rs. 36,000 29.04.2011 - Rs. 18,500 3 Rs. 54,500 30.04.2011 - Rs. 17,500 4 Rs. 72,000 32.05.20 1 1 Cash Payment 21 Rs. 50,000 02.05,2011 - Rs. 16,500 5 Rs. 88,500 03,05. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n its home page,"with the entry of a voucher all books of accounts, all reports, all totals and sub totals are updated instantly. There is nothing more that needs to be done -whether you are inserting a forgotten entry or correcting one." iv) The Assessing Officer rejected the affidavit of the accountant on pages 33-35 of the assessment order. The accountant had asserted that original copy of account submitted before the Assessing Officer were consolidated figures instead of actual book entries. But discussion above clearly shows that it was not a mere consolidation of entries but there is change in voucher numbers & dates. The Assessing Officer has argued that the affidavit is an after thought. (v) The delay in making reply after confronting the issue to the appellant's Counsel. The Assessing Officer on pages 30 & 31 has drawn a table bringing out the number of opportunities given to the appellant and drawn a conclusion that the appellant took two months, and took 9 dates and various adjournments to arrive at a revised copy of account. If the revised entries were available to the appellant it could have been produced on the very first or at best second hearing. 5.1 The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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