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TMI Blog2023 (7) TMI 1037X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 3,02,450/- for alleged cash credits which is contrary to the facts on record and as such the addition upheld is arbitrary and unjustified. 4. That the Ld. Commissioner of Income Tax (Appeals) has further erred in sustaining the addition of Rs. 22,167/- as against Rs. 44,133/-made by the Assessing Officer applying the provisions of Section 40A(3) which are not applicable and as such the addition upheld is arbitrary and unjustified. 5. That the Ld. Commissioner of Income Tax (Appeals) has further erred in sustaining the addition of Rs. 1,70,853/- made by applying the provisions of Section 40a(ia) which is arbitrary and unjustified. 6. That the Ld. Commissioner of Income Tax (Appeals) has further erred in upholding the disallowance of Rs. 51,732/- made on account of notional interest which is arbitrary and unjustified. 7. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 8. That the order of the Ld. CIT(A) is erroneous, arbitrary, opposed to the facts of the case and thus untenable. 3. The ld. AR, at the outset has submitted that as per instructions of his client, he does not prefer ground No. 1, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were signed by them. 1,10,277 A Total 8,28,311 4.1 The ld. CIT(A) thereafter observed that the Assessing Officer (in short 'AO') had not doubted about the genuineness of the business of the assessee. That the AO only doubted about the correctness of the payments/expenditure booked by the assessee. The AO in this respect had issued notices u/s 133(6) of the Income Tax Act, 1961 (in short 'the Act'). In some cases, the notices were received by the parties who admitted the transactions. He also noted that some of the parties being mostly daily wagers/vehicle operators may not actually keep track of all receipts over a time period and further the aforesaid parties did not deny the fact that they had transactions with the assessee and payments were received. He further noted that even in some cases unless there was compelling evidence to the contrary, there was no reason to doubt the correctness of the vouchers signed by the parties on account of receipt of payment. He, therefore, considering the aforesaid circumstances deleted the addition/disallowance made by the AO in respect of parties mentioned at Sr.No. 3, 4, 5, 7A to 7D, 9A to 9C as given in the table above. However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, there was a mis-match of figure. He had admitted the receipt of Rs. 20,000/- whereas, the assessee has claimed the making of payment of Rs. 1,16,000/-. The ld. Counsel for the assessee in this respect has submitted that the factum of execution of work by said Shri Duni Chand has been admitted by his son, however, his son was not the witness to all the payments made to his father. That the amount has been booked on actual payment basis. 7.1 Considering the above submissions and also considering that the assessee out of small turnover of Rs. 2.55 Cr has declared the profit of approximately Rs. 19 lacs which is 7.44% of the turnover. I do not find justification on the part of the lower authorities in disbelieving the small payments booked by the assessee to villagers/labour etc. during the execution of his work specially when execution of the work has not been doubted and the recipients were illiterate labourers/tractor operators etc. Therefore, the impugned addition agitated vide ground No. 2 is ordered to be deleted. 8. Vide ground No. 3, the assessee has agitated the addition of Rs. 3,02,450/- made by the lower authorities on account of alleged cash credits. The ld. Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not find any justification on the part of the ld. CIT(A) in confirming the impugned additions. The payment of Shri K.C. Sharma has been made by cheque and there is no denial that assessee has received the said payment from Shri K.C. Sharma. Even there is a cross-verification of the ledger/books of account of Shri K.D. Nirash and there is no denial that the assessee has carried out work from them and the payments were business receipts which have been duly accounted for towards the income of the assessee and due tax paid thereupon. Therefore, the impugned additions are not sustainable, same are, accordingly, ordered to be deleted. 11. Vide ground No. 4, the assessee has assailed the order of the ld. CIT(A) in sustaining the addition of Rs. 22,167/- as against of Rs. 44,133/- made by the AO under the provisions of Section 40A(3) of the Income Tax Act. The AO noted that the assessee had made cash payments to the labourers, therefore, he by invoking the provisions of Section 40A(3) of the Income Tax Act made the impugned additions. Though the ld. CIT(A) agreed that the contention of the assessee that the aforesaid small amount of Rs. 44,133/- was made by the assessee to the labourer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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