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TMI Blog2013 (12) TMI 1710X X X X Extracts X X X X X X X X Extracts X X X X ..... d Counsel for the assessee. The crux of arguments on behalf of the Revenue is in support to the assessment order whereas the learned Counsel for the assessee defended the impugned order. 2.1 We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee derived income from trading of machinery parts and herbal products, declared income of Rs. 3,14,448/- in his return filed on 26.9.2009. During assessment proceedings, the assessee was asked to explain regarding genuineness of cash payments made to M/s. Altos Enterprises Ltd., Ludhiana. The Assessing Officer noticed that some of the payments were made on continuous dates. The assessee explained that the payments were made to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r I also find that all the alleged cash payments are appearing in bank statement of M/s. Altos Enterprises Ltd. and these payments are directly deposit to bank account of supplier and not being cash payments to supplier against purchases. On this pretext, the appellant has also filed copy of bank account of M/s. Altos Enterprise Ltd. and reconciliation of entries by which the A.O. disallowed in the order. The facts on record indicate that payments are made to the bank of supplier and not in cash to the supplier. This clearly establishes that the appellant has used banking channel in making the payment to its supplier i.e. M/s. Altos Enterprises Ltd. directly through depositing cash in their bank account. All such payments are duly reflected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the object of the rules. Thus, I consider it proper and appropriate to hold that in the appellant's case, the purchases are genuine and payment are made through banking channel. Hence no disallowance on this account is sustainable as held in the case of Renukaswara Rice Mills vs. ITO reported in 93 TTJ 912 (Bang) extracted as above. Accordingly, the addition so made by the A.O. is deleted. Thus, this ground of appeal is allowed." 2.2 If the observation made in the assessment order, conclusion drawn in the impugned order, assertion made by the ld. respective counsel and the material available on record are kept in juxtaposition and analysed, we note that while coming to a particular conclusion, the ld. CIT(A) has duly considered the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the provisions of Section 40A(3) of the Act on the ground that the individual amounts were exceeding Rs. 20,000/- whereas the assessee made the payments in three different modes like, account payee cheques, book adjustment entry by either party and also through direct deposit in the bank account of supplier. In such a situation, no addition is warranted as has been made by the ld. Assessing Officer. In Shri Renukaswara Rice Mills vs. ITO (2005) 93 TTJ 912 (Ban) where the assessee paid directly to the bank account of the customer by availing banking route, it was held that the payee fulfilled the criteria of ensuing the objects of introduction of Section 40A(3) of the Act as it is a credit in the bank account, thus, there is no violati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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