TMI Blog2020 (10) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration in these appeals, while exercising power under Section 260A of the Act. No question of law, much less substantial question of law arises for consideration in these appeals. Assessment years under consideration in these appeals are 2014-15 and 2015-16 when the said Rules stood deleted and therefore, the Revenue is right in contending that the genuinity of the transaction is hardly a matter, which should weigh in the minds of the Assessing officer while examining as to the whether the assessees had violated Section 40A(3) of the Act. - Decided against assessee. - Tax Case Appeal Nos.645, 646 & 647 of 2019 And C.M.P.No.18806 of 2019 - - - Dated:- 22-9-2020 - Honourable Mr. Justice T.S. Sivagnanam And Honourable Mrs. Justice V. Bhavani Subbaroyan For the Appellant : Mr.R.L.Ramani, Senior Counsel assisted by Ms.C.P.Priya For the Respondent : Ms.S.Premalatha Standing Counsel for Mr.M.Swaminathan, Senior Standing Counsel COMMON JUDGMENT (DELIVERED BY T.S.SIVAGNANAM, J.) These appeals have been filed by the appellant/assessees under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act ) challenging the common order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re dismissed by order dated 28.09.2018. Challenging the same, the assessees filed appeals before the Tribunal, which were dismissed by the impugned order. 5.The learned Senior Counsel would contend that the assessees had produced a list containing the payments made by the assessees in cash to various parties, those payees were identifiable and the assessees also produced letters from the payees to show that the payees have received the money and accounted for the same in their books and the payees had also furnished their Permanent Account Numbers (PAN). Therefore, it is submitted that the genuineness of the transactions can never be doubted more particularly when, 75% of the payments effected by the assessees were through banking channel, that is, through cheques or bank drafts. This aspect was not even considered by the Assessing Officer or for that matter the CIT(A) or the Tribunal and therefore, it is submitted that the genuineness of the transactions is a very relevant factor, which should be taken into consideration. In this regard, reliance was placed on the decision of the Hon'ble Supreme Court in the case of Attar Singh Gurmuk Singh Etc. vs. Income Tax Officer [(19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ull details in the relevant column in the return of income and these details were available only in the annual report, which will go to show the conduct of the assessees. It is further submitted that the assessees are established parties and therefore, to say that they effected cash payments due to certain circumstances is an unacceptable plea. That apart, both the assessees are based on Chennai and nothing prevented them to avoid payment through banking channels. Further, the assessees have failed to prove unavoidable circumstances, which necessitated payments by cash over and above a sum of ₹ 20,000/-. Further, the genuineness of the transaction is not a factor to be considered while deciding a case under Section 40A(3) of the Act. Further, it is submitted that commercial expediency or business expediency depends on facts and, the authorities rightly concluded on facts against the assessees. In support of her contention, the learned Standing Counsel referred to the following decisions:- (i) D.S.Madiahswamy vs. ITO [T.C.(A) No.166 of 2011: dated 22.01.2019]; (ii) Natesan Krishnamurthy vs. ITO [(2019) 103 taxmann.com 342 (Madras)]; (iii) CIT vs. Vasantha Subrama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under sub-Section (3) of Section 40A, where payment exceeds twenty thousand rupees in such cases under such circumstances as may be prescribed, having regard to the nature and extent of banking facilities available, consideration of business expediency and other relevant factors, the circumstances which have been prescribed under Rule 6DD of the Rules. 12.Rule 6DD of the Rules deals with cases and circumstances in which a payment or aggregate of payments exceeding twenty thousand rupees may be made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft. Various circumstances have been set out in clauses (a) to (l) of Rule 6DD of the Rules. 13.We have carefully gone through all the clauses under Rule 6DD of the Rules and we find that the assessees cannot bring their cases under any one of the clauses as enumerated under Rule 6DD of the Rules. The issue before us is whether the Assessing Officer committed an error in not verifying the details given by the assessees, explaining the genuineness of the transaction, stating that the payees are identifiable, they have, in writing, confirmed receipt of payment, disclosed their PA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that on facts, the Court found that the names of the agencies and agents or retailers were never furnished, contrary to the case of the assessees, where full details have been furnished. However, the correct test to be applied is to examine as to whether the expenses would fall under any one of the exceptional circumstances set out in Rule 6DD of the Rules. Considering the facts of the case, the concept regarding business expediency or commercial expediency can hardly be canvassed by the assessees, as the assessees had been periodically adopting the modes by effecting cash payments. Therefore, concurrently the two authorities and the Tribunal have held against the assessees and we are not expected to examine the correctness of the impugned order as if exercising powers as the third appellate authority and what we are expected to do is to consider as to whether any substantial question of law arises for consideration in these appeals, while exercising power under Section 260A of the Act. 18.In the light of the above discussion, we find that no question of law, much less substantial question of law arises for consideration in these appeals. 19.It is noteworthy to point out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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