TMI Blog2020 (10) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in the case of Rampada [ 2015 (11) TMI 1128 - ITAT KOLKATA] there is no ground for interference as such. We set aside the order of the CIT(A) and remand the impugned issue back to the AO with a direction that no disallowance of expenditure to be resorted to u/s. 40A(3) if the same are found to be genuine and paid to M/s. Supreme Industries. Appeal of revenue is allowed for statistical purpose. - ITA No. 980/Kol/2019 - - - Dated:- 9-9-2020 - A.T. Varkey, Member (J) And Dr. Arjun Lal Saini, Member (A) For the Appellant : Dhrubajyoti Ray, JCIT, CIT/DR For the Respondents : Miraj D. Shah, Ld. AR ORDER A.T. Varkey, Member (J) 1. This is an appeal preferred by the revenue against the order of Ld. CIT(A)-7, Kolkata dated 12-03-2019 for the assessment year 2015-16. 2. Ground no. 1 of revenue's appeal reads as under:- 01. Whether on the facts and in the circumstances of the case, the ld. CIT(A) erred in law as well as facts in deleting the addition of ₹ 2,07,52,802/- made by the Assessing Officer for cash purchases by the assessee from M/s. The Supreme Industries Ltd. in violation of the provisions of Section 40A(3) of the Act. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries is located in Kolkata and assessee could have given the payment by cheque/bank draft rather than giving by cash. According to the Ld. AR, a perusal of the page-3 of the assessment order would reveal that on 31-01-2015 an amount of ₹ 15 lakh was given in cash to M/s. Supreme Industries, which cannot be accepted. Therefore, according to the Ld. DR the impugned order of the Ld. CIT(A) need to be reversed. 5. Per contra, Shri Miraj D. Shah, Learned Authorised Representative (hereinafter referred to as the 'Ld. AR') contended that the assessee being individual engaged in the business of trading in fish fish food as well as he trades plastic crates for packing/storing of fish. According to him, the modus-operandi adopted by the assessee is that he purchases the plastic crates from M/s. Supreme Industries located at Kolkata on credit and transported it to the rural areas situated in State of Andhra Pradesh, wherein the plastic crates are sold to the farmers, who are engaged in farming of aqua culture of fish in the village ponds. According to the Ld. AR, the plastic-crates sold to farmers are article used for storage of fish and the consideration assessee rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered opinion that it is a fit case for invoking provisions u/s. 263 of the I. T. Act. Thus, the case is being restored back to the file of A.O. u/s. 263 on the issue of expenditure incurred in cash violating the provisions of Sec. 40A(3). While framing the assessment, the A.O. shall consider above mentioned Issues and conduct necessary enquiries and verifications in this regard. Needless to add that the AO shall provide a reasonable opportunity of being heard to the assessee before finalising the assessment. 6. Against the order dated 26-03-2018 passed u/s. 263 of the Act of the Ld. Pr. CIT the assessee (Shri Ranjan Debnath) preferred an appeal before this Tribunal seeking modification of the order of the Ld. Pr. CIT, wherein the Tribunal modified the order and directed the AO as under:- 7. With the above discussion we modify the impugned order of Pr. CIT and direct the AO to follow the propositions of law laid down by the Tribunal in the case of Binod Kumar Burnwal (supra) and Haridas Som (supra) and not to disallow payments u/s. 40A(3) if the same are genuine. (emphasis given by us) 7. Therefore, according to the Ld. AR since for the AY 2013-14 in assessee& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Kolkata and for the purpose of selling it, transported it to the rural areas situated at far flung villages in the State of A.P and sold it as well as fish-food to the farmers and collected cash from them as well as buys fish also from them and then the fish bought by assessee are stored in the plastic crates and then transported back to Kolkata from State of AP for further trade in fish. Since the farmers purchased plastic crates for storage of fish transportation to long destination, situated in other places of India. It is common knowledge that plastic-crates are desired/required for storage of fish because fish is perishable, so it has to be packed along with ice and when the temperature outside goes up ice melts and water start dripping, so to avoid that plastic-crates are used for storage and transporting. And the assessee collected cash from these farmers for sale of fish-food plastic-crates, which the assessee deposited in the bank account of M/s. Supreme Industries. According to assessee there is risk of transporting of cash from State of Andhra Pradesh to Kolkata, so the assessee deposited the same in the nearest bank in the bank account of M/s. Supreme Industries. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear finding of genuineness of purchase/payments made in cash, which finding of fact has not been assailed and since the identity of the payee is not doubted and moreover, since the assessee is dealing with fish/fish food as well as for the purpose of storing the fish plastic crates are used/purchased and the ld. CIT(A) placed reliance on the order of this Tribunal in the case of Rampada (supra) there is no ground for interference as such. We also rely upon the decisions of the Hon'ble Jurisdictional High Court in the case of CIT vs. CPL Tannery reported in (2009) 318 ITR 179 (Cal.) and CIT vs. Crescent Export Syndicate in ITA No. 202 of 2008 dated 30-07-2008 as well as other decisions cited therein that case. Be that as it may be, taking note of the decision of this Tribunal in assessee's own case for AY 2013-14 (supra), we set aside the order of the Ld. CIT(A) and remand the impugned issue back to the AO with a direction that no disallowance of expenditure to be resorted to u/s. 40A(3) of the Act if the same are found to be genuine and paid to M/s. Supreme Industries. Needless to say proper opportunity of hearing is given to the assessee. The assessee is directed to be di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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