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TMI Blog2020 (1) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with prayer of the appellant and for which said assessment order is liable to be quashed. 2. That, the learned CIT(A) has committed serious error in conforming an amount of Rs. 2,00,000/- u/s 40(a)(ia) of the Act ignoring the submission and the provisions of the Act and for which same is liable to be deleted. 3. That, the learned CIT(A) has committed serious error in conforming the disallowances u/s 40A(3) of the Act of Rs. 4,24,045/- which is liable to be deleted. 4. That, the learned CIT(A) has committed serious error in not deleting the addition made by the learned Assessing Officer of Rs. 25,00,000/- which is contrary to the facts, law and for which the said addition is liable to be deleted. 5. That, the learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that from the above, it is clearly discernible that payments to Shri K.C.Swain has been made in small amounts which are less than Rs. 20,000/- in a day. Therefore, the provisions of section 40(a)(ia) of the Act cannot be applied. Ld counsel submitted that these payments are machine hire charges, which were not made in a single day and, therefore, provisions of section 40(a)(ia) are also not applicable. 5. Replying to above, ld DR submitted that prior to 1.10.2009, the assessee has made payment of Rs. 2 lakhs in a year to Shri K.C.Swain, which is exceeding Rs. 50,000/- and, therefore, TDS provision has to be applied. 6. Ld counsel, in the rejoinder, submitted that the payment has been made to Shri K.C.Swain as machine hire charges wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, who does not have bank account and for getting the work with them, the assessee has made cash payment. Therefore, ld counsel for the assessee submitted that some payment has been made to the truck owners, who denied to have accepted cheque or draft by stating that they are required to purchase fuel in cash and to the labourers during odd hours because it is difficult to withdraw the amount from bank during that odd hours. Therefore, this kind of payment made under compelling circumstances may kindly be allowed. 9. Replying to above, ld D.R. strongly supported the action of the Assessing Officer and submitted that any payment in contravention of section 40A(3) has to be disallowed. 10. Placing rejoinder, ld counsel submitted that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and some amount has been deposited to the bank for making further payment. From the page 6 of the CIT(A) order, it is discernible that payments of Rs. 4,24,045/- were paid in cash to different persons for certain purchases and expenses which as per the AO clearly violated the provisions of section 40A(3) of the Act. In the present case, the contention of the assessee is that the said payments were paid to truck owners and sub-contractors during the odd hours for meeting the urgent and business necessity, as the payments were required to be paid to the labourers. We also note that the assessee was doing the business in the remote area and specially the amounts were paid for making labour charges and for making certain purchases, where, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther could withdraw the amount at the work place of the assessee being supervising the work. He submitted that Mr Kiran K Mallvarrap is an income tax assessee with PAN No.AGBPK 7459 G and residing at Bangalore, Karnataka. Since he was residing in a far place, it was not possible on the part of the assessee to produce him before the AO. However, Mr Kiran Mallavarap has submitted his bank statement evidencing the payment of unsecured loan to Debkamal Dutta, brother of the assessee and the said loan was repaid by the assessee through RTGC which is evident from the customer foil of bank and also from the bank statement. This fact has been confirmed by the AO in the remand report. The repayment of loan has been credited to the bank account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns have been done. The Jurisdictional Assessing Officer of Bengaluru was also required to examine and report the matter within 20 days of receipt of the assessee but the Jurisdictional AO did not examine and send the report. But this fault of AO cannot be attributed to assessee alleging his failure in discharging the onus to establish genuineness of transaction and identity and creditworthiness of unsecured creditor. When the assessee submits plausible explanation corroborated with all possible documentary evidence under his control and command in the form of PAN No., Bank statement and confirmation then it has to be held that the assessee has discharged onus lay on his shoulders as per requirement of section 68 of the Act. When the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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