TMI Blog2021 (10) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... rule 6DD of the Rules. The argument of ld Counsel is not acceptable in so far, bill no.2608 amounting to ₹ 68,625/- , is concerned, as the same was not included in the total amount of ₹ 22,92,113/-, as noted by the assessing officer The payments to the extent of ₹ 23,22,676/- was made beyond the limit prescribed u/s 40A(3) of the Act and the assessee's case are not covered in the exceptions mentioned under rule 6DD of the Income Tax Rules. Besides, the judgments, cited by the ld Counsel have been distinguished by the ld CIT(A) in his findings, as noted by us in above para, hence we observe that none of the judgment is favoring to the assessee`s case. We are therefore of the considered view that the plea of the ld Counsel does not merit legal acceptance, thus, we sincerely believe that the plea of the ld Counsel must be rejected - Decided against assessee. - ITA No.89/SRT/2018 - - - Dated:- 25-8-2021 - Shri Pawan Singh, JM And Dr. A. L. Saini, AM For the Assessee : Shri Hiren R. Vepari - CA For the Respondent : Ms. Anupama Singla Sr. DR ORDER PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the assessee pertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice requiring the assessee to show cause as to why disallowance should not be made. 4. In response, the assessee submitted that cash payment relates to purchase of old ornaments from public. When people come to sell their ornaments, after examining the ornaments and negotiating the price payments are made to them in cash. The said cash payment is made because customers refused to accept the cheques as most of the customers do not have bank accounts. Therefore, assessee makes payment to them separately on two dates so that assessee does not come under the provisions of section 40A(3) of the Act. 5. However, the Assessing Officer has rejected the contention of the assessee and disallowed the sum of ₹ 23,22,676/- u/s 40A(3) of the Act being cash payments made by the assessee above ₹ 20,000/- in a single day. 6. Aggrieved by the order of the Assessing officer, the assessee carried the matter in appeal before the ld.CIT(A) who has confirmed the addition made by the ld. Assessing Officer. Aggrieved, the assessee is in appeal before this Tribunal. 7. Shri Hiren R. Vepari, Learned Counsel for the assessee, begins by pointing that assessee is a busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in cash book though separate recording on purchase bills is found. It is a case that seller has been paid cash in excess of ₹ 20,000/- at one time but just to come out of rigours of section 40A(3) of the Act, dates have been recorded only when the books were called by the assessing officer because cash book produced before the assessing officer contained a single entry. She further argued that cash book is prime part of the books of account reflecting true affairs. The assessee, for the sake of its convenience, has mentioned on the bills to separate figures of below ₹ 20000/-. Thus, she stated that it is a kind of cooked story to defraud the revenue, therefore, the addition made by the Assessing Officer may be sustained. 9. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We find merit in the submissions of ld DR for the Revenue, as she pointed out that assessee had not made any vouchers related to cash payments on different dates. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/- (22,92,113 + 54,000 - 23,437) . 10. We note that ld.CIT(A) has confirmed the addition made by the Assessing Officer observing as follows: Vide this ground, the appellant has challenged disallowance of ₹ 23,22,676/- u/s.40A(3) of the Act. In the assessment order, AO has given detailed findings whereby it is brought out that the payments to the extent of ₹ 23,22,676/- was made beyond the limit prescribed u/s 40A(3) of the Act and the appellant's case are not covered in the exceptions under rule 6DD. On the other hand, the appellant has contended that the payments to the extent of ₹ 18,93,668/- did not exceed the cash limit of ₹ 20,000/- on one day to one party as these payments were made on two different dates below ₹ 20,000/- but while entering in the cash books, the system took cash payment on one day to one party. The appellant had also submitted original copies of bills of old ornaments purchases wherein payments on different dates are clearly noticeable. The AO did not accept this contention of the appellant on the ground that this was deliberately done on the same bill mentioning two different dates of cash payments to keep the fig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these facts and legal positions, I find that there is no reason to differ with the findings of the AO on the ground of disallowance made u/s 40A(3) of the Act. Hence, the disallowance of ₹ 23,22,676/- u/s. 40A(3) of the Act is hereby confirmed. Ground of appeal no.2, is dismissed. 11. We have gone through the above noted findings of the ld CIT(A), and we observe that ld CIT(A) has concluded the issue after taking into account the entire factual and legal position of the assessee. We are of the view that the payments to the extent of ₹ 23,22,676/- was made beyond the limit prescribed u/s 40A(3) of the Act and the assessee's case are not covered in the exceptions mentioned under rule 6DD of the Income Tax Rules. Besides, the judgments, cited by the ld Counsel have been distinguished by the ld CIT(A) in his findings, as noted by us in above para, hence we observe that none of the judgment is favoring to the assessee`s case. We are therefore of the considered view that the plea of the ld Counsel does not merit legal acceptance, thus, we sincerely believe that the plea of the ld Counsel must be rejected. 12. In the result, appeal filed by the assessee is dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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