VIJAY SINGH, FARIDABAD V. ITO, WARD- 2(4), FARIDABAD

ITA 1160/DEL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6845 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2013-2014
• Appeal Filed On: 19-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YPS G
• Section: 40A(3); 80C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI G.S. PANNU, VICE PRESIDENT & SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO.1160/DEL/2018 ASSESSMENT YEAR 2013-14 VIJAY SINGH, C/O KAPIL GOEL, ADV. F-26/124, SECTOR-7, ROHINI, NEW DELHI. V. ITO, WARD-2(4), FARIDABAD. TAN/PAN: BYYPS 2279G (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI PRAMOD PATRA, CA RESPONDENT BY: SHRI SURENDER PAL, SR.D.R. DATE OF HEARING: 17 10 2019 DATE OF PRONOUNCEMENT: 14 01 2020 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 20.11.2017, PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS), FARIDABAD FOR THE QUANTUM OF ASSESSMENT PASSED U/S.143(3) FOR THE ASSESSMENT YEAR 2013-14. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS RAISED FOLLOWING TWO GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, ID CIT-A ERRED IN SUSTAINING THE ORDER PASSED BY LD. AO BY SUSTAINING THE ADDITION OF RS. 48,05,000 U/S 40A(3) WITHOUT APPRECIATING THAT GENUINENESS OF TRANSACTION HAS RE MAINED THOROUGHLY UNDOUBTED AND THERE IS NO FLOW OF UNACCO UNTED I.T.A. NO.1160/DEL/2018 2 MONEY NOR THE TRANSACTION IS EVASIVE IN CHARACTER N OR SOURCE OF PAYMENT AND IDENTITY OF PAYEE IS IN DISPUTE AND NOR THERE IS ANY FICTITIOUS OR FALSE TRANSACTION. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, ID CIT-A ERRED IN SUSTAINING THE ORDER PASSED BY LD. AO BY SUSTAINING THE ADDITION OF RS 59,719 U/S 80C OF THE ACT. 2. THE FACTS IN BRIEF ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING OF ELECTRICAL ITEMS IN THE NAME OF PROPRIETARY CONCERN, M/S. V.S. ELECTRONICS AND ALSO SALE PURCHASE OF PROPERTY IN HIS INDIVIDUAL NAME. THE AS SESSING OFFICER ON PERUSAL OF THE DETAILS OF PURCHASES DEBI TED TO THE ASSESSEES P & L ACCOUNT NOTICED THAT ASSESSEE HAS MADE CASH PAYMENTS, EXCEEDING RS.20,000/- ON ACCOUNT OF PURCHASES. THE DETAILS OF WHICH ARE GIVEN AT PAGE 2 OF THE ASSESSMENT ORDER FOR SUMS AGGREGATING TO RS.48,05,0 00/-. HE FURTHER OBSERVED THAT EXCEPTIONS PROVIDED IN RULE 6 DD ARE NOT APPLICABLE. AFTER DETAILED DISCUSSION, HE HAS M ADE THE ADDITION OF RS.48,05,000/-. 3. LD. CIT (A) HAS CONFIRMED THE ACTION OF THE ASSE SSING OFFICER HOLDING THAT THE ASSESSEE WAS UNABLE TO BRI NG OUT ANY BUSINESS EXIGENCIES TO JUSTIFY THE PAYMENT IN CASH. FURTHER, THE PAYMENT STATED TO BE MADE FOR LAND PURCHASE SO THAT THE TITLE DEEDS WERE REGISTERED IN TIGAON, A SMALL TOWN WHICH IS WELL SERVED BY BANKING FACILITY. FURTHER, THE PAYME NTS ARE MADE IN CASH MUCH BEFORE THE ACTUAL REGISTRATION AN D HANDING OVER OF POSSESSION, AND TO THAT EXTENT BEAR THE CHARACTER OF BEING ADVANCE PAYMENTS. I.T.A. NO.1160/DEL/2018 3 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT ASSESSEE HAS MADE THE PAYMENT FOR THE PURCHASE OF LAND FROM THE FARMERS AND THESE FARMERS HAS FILED AFFIDA VITS TO CONFIRM THAT THEY HAD INSISTED FOR CASH PAYMENTS. C OPY OF THESE AFFIDAVITS HAS BEEN FILED IN THE PAPER BOOK F ROM PAGES 50 TO 62. UNDER THESE CIRCUMSTANCES, THE CASH PAYME NT CANNOT BE DISALLOWED U/S. 40A(3) AS IT FALLS WITHIN AMBIT OF RULE 6DD. 5. ON THE OTHER HAND, LD. DR SUBMITTED THAT IF THE TOWN IN WHICH TRANSACTION HAS TAKEN PLACE HAS BANKING FACIL ITY, THEN IT CANNOT BE HELD TO BE AN EXCEPTIONAL CASE AND IF THE ADVANCES HAVE BEEN MADE FOR PURCHASE OF LAND IN CAS H, THEN IT DOES FALL WITHIN THE AMBIT OF SECTION 40A(3). HE THUS STRONGLY RELIED UPON THE ORDER OF THE LD. CIT (A). 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON P ERUSAL OF THE RELEVANT FINDINGS GIVEN IN THE IMPUGNED ORDE R AS WELL AS MATERIAL REFERRED TO BEFORE US, WE FIND THAT ASSESS EE HAS FILED THE AFFIDAVIT OF THE SELLERS/FARMERS IN RESPECT OF PAYMENT MADE IN CASH AND THE REASONS FOR DEMANDING THE CASH PAYMENTS FOR SALE CONSIDERATION. HOWEVER, THERE IS NO FINDING EITHER BY THE ASSESSING OFFICER OR LD. CIT (A) ON T HESE AFFIDAVITS. SINCE THESE AFFIDAVITS GOES TO THE VERY ROOT OF THE ISSUE INVOLVED, THEREFORE, THE MATTER IS REMANDED B ACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE AFFIDAVITS AND TO EXAMINE, WHETHER CASH PAYMENT MADE TO THE FARMERS F ALLS WITHIN THE EXCEPTIONAL CLAUSE UNDER RULE 6DD. THE L D. I.T.A. NO.1160/DEL/2018 4 ASSESSING OFFICER IS ALSO DIRECTED TO GIVE REASONAB LE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CAS E. 7. REGARDING ADDITION OF RS.59,719/- U/S. 80C, LD. COUNSEL SUBMITTED THAT SAME HAS BEEN DISALLOWED BY THE ASSE SSING OFFICER ON THE GROUND THAT ASSESSEE HAS FAILED TO S UBSTANTIATE THE CLAIM OF DEDUCTION. HE SUBMITTED THAT THE ASSES SEE HAS FURNISHED THE CERTIFICATE OF TUITION FEE WHICH IS A PPEARING AT PAGE 66, CLAIMING EXEMPTION U/S.80C, THEREFORE, THE ISSUE IS ALSO RESTORED BACK TO THE FILE OF THE ASSESSING OFF ICER TO EXAMINE THE CERTIFICATE AND ALLOW DEDUCTION AS PER LAW. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH JANUARY, 2020. SD/- SD/- [G.S. PANNU] [AMIT SHUKLA] VICE PRESIDENT JUDICIAL MEMBER DATED: 14 TH JANUARY, 2020 PKK: