TMI Blog2021 (10) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... erting that reasons to believe could have been recorded only on the strength of any fresh material that may have come into existence or that may have come to the knowledge of the AO after the assessment order came to be passed. That principle would remain applicable only to cases where an opinion had been formed on the subject matter considered in the reassessment proceeding, in an assessment order passed under Section 143(3). Addition u/s 40A(3) - Only a statutory presumption exists in favour of the revenue to disallow such expenditure as may have been made in cash by making payments in excess of ₹ 20,000/- during the previous year, to any persons. The presumption is rebuttal. We find that the affidavits filed by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case, the Tribunal was legally justified in upholding the proceedings U/s 147 of the Act, even though, the same is made only on account of change of opinion and without any material coming to the knowledge of the Assessing Officer? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in to hold that the Assessing Officer has reason to believe that the income has escaped assessment? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in confirming the disallowance U/s 40-A(3) of the Act, even though, the appellant has explained exceptional circumstances under proviso to the said section? 4. Having heard learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts or easy access to banking services and that in any case they had pressed for urgent payments to be made, if the sale were to fructify. The purchasers filed their affidavits during the assessment proceedings. In support of the aforesaid contentions they acknowledged the sale transactions. Further, they disclosed their true identities. The sale having been evidenced by a registered sale deed, there was nothing to doubt the genuineness of the transactions, yet, the Tribunal has overlooked these admitted facts and taken a technical view by relying on the provisions of Section 40-A(3) read with the second proviso thereto, as then existed on the statute book. In support of his submission Sri Amit Mahajan, learned counsel for the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne difficulty to the payee. As has already been observed above, in the present case the totality of circumstances shows that the transactions were genuine for the reasons already mentioned above. In fact, the amount said to have been paid in cash by the assessee to certain parties has been verified by the certificates of those parties. Hence, the interest of the Department is protected because the Department can assess those amounts in the hands of the payee and it is not that these amounts will not be assessed at all. Thus, the Department will not suffer in any way. In view of the above, we answer the question referred in the affirmative, i.e., in favour of the assessee and against the Department. Parties shall bear their own co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the assessee that his seller has been insisting on cash payment ; 2. The identity of the seller had been disclosed by the assessee ; 3. The assessee had furnished certificates from the sellers stating that they had insisted on cash payment ; 4. The genuineness of the payments. 9. In view of the facts of the present case, we find that the affidavits filed by the assessee during the assessment proceeding were not rebutted by the revenue. Those affidavits contain clear recital that the purchasers insisted for cash payment. Their identity is certainly not in doubt. There is no finding to that effect in any of the orders leading to this appeal. The sale deeds are also admitted to be registered documents and there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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