TMI Blog2019 (11) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... the income of the assessee is assessed under the head income from other sources . Even though the Assessing Officer has not specifically stated so while invoking section 40A(3) of the Act, however, mere omission of reference to section 58 by the Assessing Officer would not render the addition so made by the Assessing Officer untenable in law given that the substance of the transactions relates to cash payment exceeding ₹ 20,000/- which is not disputed by the assessee. There is no infirmity in the order of the AO as far as the invoking of section 40A(3) where the same is read along with section 58 of the Act. Further, the assessee has contended that it has made cash payment under exceptional and unavoidable circumstances as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns and hence the same may kindly be quashed. 2. ₹ 3,48,150/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the disallowance of ₹ 3,48,150/- u/s 40A(3) on account of cash payment in excess of ₹ 20,000/-. Hence the addition or disallowance so made by the ld. AO and sustained by the ld. CIT(A) is being totally contrary to the provisions of law and facts on the record and hence the penalty may kindly be deleted in full. 3. The ld.AO has grossly erred in law as well as on the facts of the case in charging interest u/s 234 B/C. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O has alleged that for want of justification, the disallowance of ₹ 3,48,150/- has been made and taxed the income at the MMR maximum Marginal rate. 4.1 In first appeal, the Id. CIT(A) has confirmed the disallowance in summary manner and only held that the appel lant made the income expendi ture account and fi led the audi t report and made receipt and payment account and balance sheet which established that it is doing the business or profession and these are business payment made, hence section 40A(3) is applicable. The Id. CIT(A) has further held that the argument that the payment made on behalf of Govt. Agency is also not acceptable and the appellant has not filled any evidence regarding that the payment covered w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pment, organic farming development, aid for self help group development alongwith educated farmer for adopting new technology for agriculture. Thus the assessee was working on behalf of Govt. agency or other institute and the expenses has also been incurred on their behalf. 4.4 It was further submitted that the assessee has made payments in cash under the exceptional and unavoidable circumstances. Because the payment has been made on account of expenses for breakfast, lunch dinner, paid to the various restaurant, halwai etc out of station from the office place of the assessee, where they people not accept the cheque being unknown to the assessee and being out of station. In these transaction the payment cannot be made or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and strike between the direction of law and hardship to the assessee. Further, reliance was placed on the Jaipur Tribunal decision in case of M/s A Daga Royal Arts, Jaipur v/s ITO Ward 2(2), Jaipur in ITA No. 1065/JP/2016 dt. 15.05.2018. 5. The ld. DR is heard who has relied on the findings of the lower authorities and submitted that even though income of the assessee has been assessed under the head income from other sources, the provisions of section 40A(3) are equally applicable by virtue of section 58 of the Act. Hence, the contention raised by the ld. AR regarding non- applicability of section 40A(3) of the Act is not correct. It was submitted that the assessee has not specified as to how the payment made by it in cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceeding ₹ 20,000/- which is not disputed by the assessee. We therefore, find that there is no infirmity in the order of the AO as far as the invoking of section 40A(3) of the Act where the same is read along with section 58 of the Act. Further, the assessee has contended that it has made cash payment under exceptional and unavoidable circumstances as the payment has been made on account of expenses for breakfast, lunch dinner paid to the various restaurant, halwai etc. at places outside the regular place of operations of the assessee and at these places, they do not accept the cheque payment being unknown to the assessee. Further, the assessee has relied on the Coordinate Bench decision in case of M/s A Daga Royal Arts, Jaipur vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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