Sri Malay Mondal, Burdwan V. ITO, WD-2(2), ASANSOL, Asansol

ITA 1034/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1633 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 13-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: U DASGUPTA
• Keywords: Business income
• Section: 40A(3)

Judgement Text

1 ITA NO.1034/KOL/2016 SHRI MALAY MONDAL A.Y.2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH D KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI WAS EEM AHMED, AM ] ITA NO.1034/KOL/2016 ASSESSMENT YEAR : 2010-11 SHRI MALAY MONDAL -VERSUS- I.T.O., WARD-2(2) ASANSOL ASANSOL. (PAN:ALLPM 2361 A) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI U.DASGUPTA, ADVOCATE FOR THE RESPONDENT: SHRI S.DASGUPTA, ADDL. CIT(DR) DATE OF HEARING : 23.01.2018. DATE OF PRONOUNCEMENT : 02.02.2018. ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 30.03.2016 OF C.I.T- (A)-ASANSOL RELATING TO A.Y.2010-11. 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE READS A S FOLLOWS :- 1. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) ERRED IN LAW & ON FACTS IN CONFIRMING DISALLOWANCE U/S. 40A(3) - RS.3 8,63,895/- MADE BY THE AO. 2. FOR THAT THE ASSESSMENT OF BUSINESS PROFIT AT RS .39,96,615/- [AS CONFIRMED BY LD. CIT(A)] BEING MORE THAN THE PURCHASE PRICE AND 97 % OF TOTAL SALES IS ABSURD AND BAD IN LAW & ON FACTS. 3. FOR THAT YOUR APPELLANT CRAVES LEAVE TO TAKE / A MEND ANY OTHER ADDITIONAL / ALTERNATIVE GROUND / GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 3. THE ASSESSEE IS AN INDIVIDUAL. HE CARRIES ON TH E BUSINESS OF TRADING IN COUNTRY LIQUOR. THE ASSESSEE PURCHASED COUNTRY LIQUOR FROM ASANSOL BOTTLING & PACKAGING CO. LTD AND PAID A SUM OF RS.38,63,895/- IN RESPEC T OF SUCH PURCHASE BY CASH. THE AO WAS OF THE VIEW THAT AS PER THE PROVISION OF SEC TION 40A(3) OF THE INCOME TAX ACT, 1961 (ACT) ANY CASH PAYMENT FOR ANY EXPENSES E XCEEDING RUPEES TWENTY THOUSAND ON A DAY IS LIABLE TO BE DISALLOWED AND AD DED TO THE TOTAL INCOME OF AN 2 ITA NO.1034/KOL/2016 SHRI MALAY MONDAL A.Y.2010-11 ASSESSEE. THE AO ACCORDINGLY ADDED A SUM OF RS.38,6 3,895/- TO THE TOTAL INCOME OF THE ASSESSEE BY WAY OF DISALLOWANCE U/S 40A(3) OF THE ACT. ON APPEAL BY THE ASSESSEE THE CIT(A) CONFIRMED THE ORDER OF THE AO. 4. AT THE TIME OF HEARING IT WAS BROUGHT TO OUR NOT ICE THAT SIMILAR ISSUE CAME UP FOR CONSIDERATION IN ASSESSEES OWN CASE FOR A.Y.20 08-09 IN ITA NO.903/KOL/2013 DATED 28.09.2016 AND THE TRIBUNAL WAS PLEASED TO HO LD THAT THE DISALLOWANCE U/S 40A(3) OF THE ACT CANNOT BE SUSTAINED. THE TRIBUNAL FOLLOWING THE DECISION RENDERED IN ANOTHER CASE OF PRABIR KR. MALLIK VS ITO IN ITA NO.1603/KOL/2011 ORDER DATED 01.06.2016 DELETED THE DISALLOWANCE U/S 40A(3) OF T HE ACT. IN SHORT THE TRIBUNAL HELD THAT THE CIRCUMSTANCES IN WHICH PAYMENTS WERE MADE IN CASH WERE EXCEPTIONAL CIRCUMSTANCES FALLING WITHIN THE AMBIT OF RULE 6DD( B) OF THE I.T.RULES, 1963 I.E. PAYMENT BY WAY OF LEGAL TENDER TO GOVERNMENT AND R ULE 6DD(K) I.E. PAYMENT MADE TO AN AGENT OF THE GOVERNMENT. RESPECTFULLY FOLLOWI NG THE DECISION OF THE TRIBUNAL, WE DIRECT THAT THE ADDITION MADE BE DELETED. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 02.02.2018. SD/- SD/- [WASEEM AHMED] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 02.02.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.SHRI MALAY MONDAL, PROP. M/S PASRIRA C.S.SHOP, PA RIRA, P.O.MAJHIARA, DIST. BURDWAN-713330. 2 D.C.I.T., CIRCLE-25, KOLKATA.I.T.O. WARD-2(2), ASANSOL 3. . C.I.T.(A)-ASANSOL 4. C.I.T.-A SANSOL. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHES 3 ITA NO.1034/KOL/2016 SHRI MALAY MONDAL A.Y.2010-11