Dy.CIT, Circle-1(1), Hyderabad V. M/s Abhinandana Housing Private Limited, Hyderabad

ITA 1321/HYD/2014

• Counselvise Citation: 132122514 RSA 2014
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 11-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: Y R RAO
• Keywords: Business expenditure; Ignorance of law
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS. 1320 & 1321/HYD/2014 ASSESSMENT YEARS : 2010-11 & 2011-12 DY. COMMISSIONER OF INCOME- TAX, CIRCLE 1(1), HYDERABAD M/S ABHINANDANA HOUSING PVT. LTD., HYDERABAD. PAN AAECA 1098 F (APPELLANT) (RESPONDENT) REVENUE BY SHRI RAJAT MITRA ASSESSEE BY SHRI Y.R. RAO DATE OF HEARING 26-11-2014 DATE OF PRONOUNCEMENT 03-12-2014 O R D E R PER SAKTIJIT DEY, J.M.: AFORESAID APPEALS BY THE DEPARTMENT ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LEARNED DEPARTMENTAL REPRESENTAT IVE. COMMISSIONER OF INCOME-TAX(A)-II, HYDERABAD, BOTH DATED 15/05/2014, FOR THE ASSESSMENT YEARS 2010-11 & 2011 -12. 2. THE EFFECTIVE GROUNDS RAISED BY THE DEPARTMENT, WHICH ARE COMMON FOR BOTH THE APPEALS, ARE AS UNDER: 2. THE LD. CIT(A) ERRED IN ALLOWING RELIEF IN RESPE CT OF DISALLOWANCE MADE U/S 40A(3) OF THE IT ACT TOWARDS THE PAYMENTS MADE IN PLACES WHERE NO BANKING FACILITY I S AVAILABLE BY DISREGARDING THE OBSERVATION OF THE AO THAT MOST OF VILLAGES ARE COVERED BANKING FACILITY AS STATED BY SO CALLED AGENTS. ALSO ASSESSEE CANNOT ESCAPE FROM PROVISION OF SECTION 40 A(3) ON THE GROUND THAT LAND LORDS REFUSED TO RECEIVE THE CHEQU ES. 2 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. 3. THE LD. CIT(A) ERRED IN ALLOWING RELIEF IN RESPE CT OF DISALLOWANCE OF CASH PAYMENTS MADE ON HOLIDAYS DISR EGARDING THE FACT THAT THE PAYMENTS WERE MADE IN INSTALMENTS AND AS SUCH THERE IS NO REQUIREMENT TO MAKE PAYMENTS ON HO LIDAY TO CLAIM EXCEPTION UNDER RULE 6DD(J). 3. AS FACTS AND ISSUES ARE IDENTICAL, FOR THE SAKE OF CONVENIENCE, WE SHALL DEAL WITH THE FACTS AS INVOLVED IN ITA NO. 1320/HYD/2014 RELATING TO AY 2010-11. 4. BRIEFLY STATED, ASSESSEE A COMPANY IS ENGAGED IN REAL ESTATE BUSINESS. ACTIVITIES OF ASSESSEE, MAINLY, IS TO PUR CHASE LAND IN BULK AND AFTER DEVELOPING THEM INTO PLOTS SALE THEM TO P ROSPECTIVE BUYERS. IN COURSE OF ASSESSMENT PROCEEDING, AO NOTICED THAT DURING THE YEAR UNDER CONSIDERATION, ASSESSEE HAS PURCHASED LANDS WORTH RS. 14,53,85,794. ON FURTHER VERIFICATION, AO FOUND THA T ASSESSEE HAD MADE CASH PAYMENTS IN EXCESS OF RS. 20,000, IN VIO LATION OF SECTION 40A(3) OF THE ACT, TO THE EXTENT OF RS. 82,85,097. IN RESPONSE TO THE QUERY MADE, ASSESSEE WHILE SUBMITTING DETAILS OF CA SH PAYMENTS MADE DURING THE YEAR ALSO STATED THAT THERE IS NO V IOLATION OF SECTION 40A(3) AS THEY ARE COVERED UNDER VARIOUS CLAUSES OF RULE 6DD. THE CASH PAYMENTS WERE CLASSIFIED BY ASSESSEE, AS UNDER : 1. CASH PAYMENT IN PLACES WHERE NO BANKING FACILITY AVAILABLE (CLAUSE (G) OF RULE 6DD) 18,62,375 2. CASH PAYMENT ON DAYS BANKS WERE CLOSED ON ACCOUNT OF HOLIDAY (CLAUSE (I) OF RULE 6DD) 22,20,000 3. CASH PAYMENT TO AGENTS WHO IS REQUIRED TO MAKE PAYMENTS IN CASH TO LANDS LORDS (CLAUSE (K) OF RULE 6DD) 36,53,097 4. CASH PAYMENTS MADE BELOW RS. 20,000 ON EACH OCCASION 5,49,625 TOTAL 82,85,097 5. AS FAR AS CASH PAYMENTS OF RS. 5,49,625 WHICH AR E LESS THAN RS. 20,000, AO ACCEPTED, ASSESSEES CLAIM AFTER VER IFICATION. AS FAR AS CASH PAYMENT OF RS. 36,53,097 CLAIMED TO HAVE BE EN PAID THROUGH AGENTS, IT WAS SUBMITTED BY ASSESSEE THAT AS AMOUNT IN QUESTION WAS PAID THROUGH AGENT, IT WILL COME WITHIN THE EXCEPTI ON PROVIDED UNDER 3 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. CLAUSE (K) OF RULE 6DD, HENCE, NO DISALLOWANCE CAN BE MADE U/S 40A(3). FOR VERIFYING ASSESSEES CLAIM, AO SUMMONED SOME OF THE BROKERS THROUGH WHOM ASSESSEE CLAIMED TO HAVE MADE PAYMENTS. AFTER EXAMINING THE BROKERS, AO OPINED THAT SO CALL ED BROKERS ACTED AS MEDIATORS AT THE TIME OF PURCHASE OF LAND AND NO NE OF THEM WERE REGULAR AGENTS. HE FURTHER STATED THAT THESE MIDDLE MEN MAINLY IDENTIFIED PROSPECTIVE SELLERS AND DO NOT HAVE ANY KNOWLEDGE OF REAL ESTATE. FURTHER, AS ALLEGED BY AO, THESE MEDIATORS CLAIMED TO HAVE IDENTIFIED SELLERS IN DIFFERENT VILLAGES WHERE THEY DO NOT RESIDE, HENCE, AO RAISED DOUBT WITH REGARD TO THEIR INVOLVEMENT IN THE DEAL. AO, THEREFORE, WAS OF THE VIEW THAT JUST TO OVERCOME, V IOLATION COMMITTED UNDER SECTION 40A(3) BY MAKING CASH PAYMENTS, ASSES SEE HAS TAKEN RECOURSE TO THE PAYMENTS MADE THROUGH BROKERS TO CO ME WITHIN THE EXCEPTION PROVIDED UNDER CLAUSE (K) OF RULE 6DD. AO OBSERVED THAT NEITHER ASSESSEE WAS UNDER OBLIGATION TO MAKE PAYME NTS TO THEM BY CASH NOR SO CALLED BROKERS ARE REQUIRED TO MAKE PAY MENTS IN CASH. THEREFORE, ASSESSEE WAS UNDER NO OBLIGATION TO MAKE PAYMENTS TO BROKERS. AO OBSERVED THAT ASSESSEE MIGHT HAVE USED THEIR SERVICES TO SEND MONEY TO THE LANDLORDS IN THE SAME MANNER AS S ENDING THROUGH HIS OWN EMPLOYEES. AO, ULTIMATELY, CAME TO THE CONC LUSION THAT IN THESE CIRCUMSTANCES, AS PERSONS THROUGH WHOM MONEY ALLEGEDLY WAS PAID TO THE LAND OWNERS CANNOT BE TREATED AS AGENTS OF ASSESSEE, EXCEPTION PROVIDED UNDER CLAUSE (K) OF RULE 6DD WIL L NOT APPLY. ACCORDINGLY, HE DISALLOWED THE AMOUNT OF RS. 36,53, 097. 6. AS FAR AS PAYMENTS OF RS. 22,20,000 CLAIMED TO H AVE BEEN PAID ON DAYS WHEN BANKS WERE CLOSED, ON ACCOUNT OF HOLI DAY, THEREBY COMING WITHIN EXCEPTIONS PROVIDED UNDER CLAUSE (I) OF RULE 6DD, AO OPINED THAT THERE WAS NO REQUIREMENT OF MAKING PAYM ENTS ON A PARTICULAR DAY, WHICH HAPPENS TO BE A HOLIDAY. THIS , ACCORDING TO AO IS BECAUSE IN CASE OF ASSESSEE, THE TRANSACTIONS WE RE NOT SETTLED ON THAT PARTICULAR DAY. WHEN THE AGREEMENT OF SALE WAS ENTERED SOME TIME BACK AND ASSESSEE MADE PAYMENTS IN INSTALMENTS ON SEVERAL 4 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. OCCASIONS, THEN, THERE IS NO NECESSITY OF PAYING TH E AMOUNT ON A HOLIDAY WHEN THE BANK IS CLOSED. ACCORDINGLY, HE DI SALLOWED THE AMOUNT OF RS. 22,20,000 U/S 40A(3). 7. AS FAR AS THE AMOUNT OF RS. 18,62,375 CLAIMED TO HAVE BEEN PAID TO THE LAND OWNERS IN PLACES WHERE NO BANKING FACILITY WAS AVAILABLE THEREBY ATTRACTING CLAUSE (G) OF RULE 6DD , AO OBSERVED THAT PERSONS TO WHOM PAYMENTS WERE MADE ARE RESIDING IN VILLAGES LOCATED IN DISTRICTS OF GUNTUR AND KRISHNA, WHICH ARE MOST DEVELOPED DISTRICTS IN THE STATE AND ARE COVERED BY BANKING FACILITIES. THEREFORE, HE DISALLOWED THE CASH PAYMENTS MADE OF RS. 18,62,375. 8. APART FROM THE AFORESAID AMOUNTS DISALLOWED, AO ALSO NOTICED THAT AN AMOUNT OF RS. 49,04,500 WAS PAID BY CASH I N RESPECT OF PURCHASES MADE IN EARLIER YEARS, WHICH WERE SHOWN A S SUNDRY CREDITORS. APPLYING THE PROVISIONS OF SECTION 40A(3 ), AO ALSO DISALLOWED THE SAID AMOUNT OF RS. 49,04,500. 9. ACCORDINGLY, THE TOTAL CASH PAYMENTS OF RS. 1,26 ,39,972 WAS ADDED TO THE INCOME OF ASSESSEE FOR THE IMPUGNED AY . BEING AGGRIEVED OF THE ADDITIONS MADE BY AO, ASSESSEE PRE FERRED APPEAL BEFORE LD. CIT(A). 10. LD. CIT(A) FOLLOWING THE ORDER PASSED BY ITAT I N ASSESSEES OWN CASE FOR AY 2009-10 IN ITA NOS. 695/HYD/2013 DT . 12/02/2014 DELETED THE ENTIRE ADDITION MADE BY AO. 11. BEING AGGRIEVED OF THE AFORESAID ORDER OF LD. C IT(A), DEPARTMENT IS BEFORE US. 12. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDER S OF REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. B OTH THE LEARNED AR AND LD. DR AGREED THAT THE ISSUE IN DISPUTE IS SQUA RELY COVERED BY THE 5 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. DECISION OF ITAT, HYDERABAD BENCH IN ASSESSEES OWN CASE FOR AY 2009-10 IN ITA NO. 695/HYD/2012 AND 612/HYD/2013 DA TED 12/02/2014. AS CAN BE SEEN FROM THE FACTS AND MATER IALS ON RECORD ASSESSEE CLAIMED THAT NO DISALLOWANCE CAN BE MADE O F THE CASH PAYMENTS AS THEY COME WITHIN THE EXCEPTIONS PROVIDE D UNDER DIFFERENT CLAUSES OF RULE 6DD. AS FAR AS CASH PAYMENTS OF RS. 18,62,375 MADE TO PERSONS IN PLACES WHERE NO BANKING FACILITY IS A VAILABLE, ASSESSEE CLAIMED THAT IT IS COMING WITHIN THE EXCEPTION PROV IDED UNDER RULE 6DD(G). SIMILARLY, CASH PAYMENTS OF RS. 22,20,000 W AS CLAIMED TO HAVE BEEN MADE ON DAYS WHEN THE BANKS WERE CLOSED O N ACCOUNT OF HOLIDAY, HENCE, SUCH PAYMENTS COME WITHIN THE EXCEP TION OF RULE 6DD(J). SIMILARLY, PAYMENTS MADE THROUGH AGENTS OF RS. 36,53,097 WERE CLAIMED TO BE COMING WITHIN THE EXCEPTION OF R ULE 6DD(K). PAYMENTS OF RS. 49,04,500 RELATING TO PURCHASES OF EARLIER YEARS WERE ALSO CLAIMED TO BE COVERED UNDER AFORESAID CLAUSES OF RULE 6DD. IT IS TO BE NOTED THAT SIMILAR DISALLOWANCES MADE IN AY 2 009-10, CAME UP FOR CONSIDERATION BEFORE THE COORDINATE BENCH OF TH IS TRIBUNAL, IN ITA NO. 695/HYD/13 (SUPRA). THE TRIBUNAL AFTER CONSIDER ING THE SUBMISSIONS OF ASSESSEE AND EXAMINING FACTUAL DETAI LS, UPHELD ASSESSEES CONTENTION THAT CASH PAYMENTS MADE ARE COVERED BY EXCEPTIONS PROVIDED UNDER DIFFERENT CLAUSES OF RULE 6DD, HENCE, NO DISALLOWANCE CAN BE MADE UNDER SECTION 40A(3). THE FINDING OF THE COORDINATE BENCH IS EXTRACTED HEREUNDER FOR CONVENI ENCE: 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THE CIT(A) DELET ED THE ADDITION OF RS. 4,45,20,449 ON THE REASON THAT THE PAYMENTS WERE MADE IN THE PLACES WHERE THERE IS NO BANKING FACILITY AVAILABLE. THE FACTS OF THE CASE UNDER CONSIDERATION NEED TO BE EXAMINED. AS STATED EARLIER THE ASSESSEE COMPANY IS IN THE BUSINESS OF REAL ESTATE PURCHASING BULK LANDS AND DEVELOPING THEM IN TO PLOTS AND SELLING OF THE SAME. IT IS COMMON KNOWLE DGE THAT IN VILLAGES GENERALLY THE TRANSACTIONS ARE BY CASH NOT 6 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. BECAUSE THE TRANSACTIONS ARE NOT GENUINE OR THEY WA NT TO AVOID BANKS BUT BECAUSE IT IS STILL A CONVENIENT MO DE OF TRANSACTION AND PEOPLE ARE MORE COMFORTABLE IN DEAL ING WITH CASH. THIS WILL NOT GIVE IMMUNITY TO THE TRAN SACTIONS IN VILLAGES BUT IT HELPS IN UNDERSTANDING THE REASO N WHICH WILL HELP IN APPRECIATING THE FACTS OF THE CASE. T HE ASSESSEE HAS FURNISHED ALL THE DETAILS STATING THAT THE SAID VILLAGES DID NOT HAVE BANKING FACILITIES. THE ASSE SSEE FILED CONFIRMATIONS FROM THE VILLAGE SURPANCHES WHO CERTI FIED THAT THERE WERE NO BANKING FACILITIES IN THE VILLAG ES CONCERNED AND THE ASSESSEE HAS ALSO PRODUCED CONFIRMATIONS FROM THE VILLAGE SURPANCHES CONFIRMIN G THE IDENTITY OF THE SELLERS OF THE LAND. THE OBSERVATI ON OF THE ASSESSING OFFICER THAT KRISHNA AND GUNTUR DISTRICTS ARE MOST DEVELOPED DISTRICTS IN THE STATE AND ALMOST ALL THE VILLAGES IN THESE DISTRICTS ARE COVERED BY BANKING FACILITIE S IS ONLY BASED ON HIS ASSUMPTIONS. BUT THE VILLAGE SURPANCH ES WHO ARE THE RESPONSIBLE PERSONS OF THE VILLAGES HAVE CO NFIRMED THAT THERE WERE NO BANKING FACILITIES IN THE SAID V ILLAGES. IT IS NOT PROPER TO DISBELIEVE THE CONFIRMATIONS FILED BY RESPONSIBLE VILLAGE OFFICERS AND PROCEED ON ASSUMPT ION THAT THERE SHOULD BE BANKS IN THE SAID VILLAGES. DE SPITE ALL THE PROGRESS THERE ARE SOME VILLAGES IN ANDHRA PRAD ESH WHICH ARE NOT CONNECTED BY PROPER BANKING FACILITIE S. IT MAY BE NOTED THAT RULE 6DD(G) SAYS 'SECTION 40A(3) DISALLOWANCE CANNOT BE MADE WHERE T HE PA Y MEN T IS MADE IN A VI LLA G E OR TOWN WHICH ON THE DATE OF SUCH PAYMENT IS NOT SERVED BY ANY BANK TO ANY PE RSON WHO ORDINARILY RESIDES, OR IS CARRYING ON ANY BUSIN ESS, PROFESSION OR VOCATION, IN A NY SUCH VILLAGE OR TOWN' WHICH SHOWS THAT THE SAID RULE DOES NOT MAKE ANY QUALIFYING EXEMPTION AND IF THERE ARE NO BANKS AT T HE PLACE OF TRANSACTION NO DISALLOWANCE CAN BE MADE ON ACCOUNT OF CASH PAYMENTS MADE TO THE PERSONS RESIDI NG IN SUCH PLACE I.E., VILLAGE OR TOWN. 7. THE CONTENTION OF THE ASSESSING OFFICER THAT SOM E PAYMENTS WERE MADE IN CASH AND SOME WERE MADE BY 7 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. CHEQUE TO THE VERY SAME PERSON WAS NOT SUPPORTED BY ANY SPECIFIC INSTANCES. THE ASSESSING OFFICER DID N OT DOUBT THE GENUINENESS OF THE TRANSACTION OR THE IDENTITY OF THE SELLERS. IF THE PAYMENTS ARE GENUINE AND IF THE BUS INESS EXPEDIENCY SO REQUIRES AND THE ASSESSEE MAKES THE PAYMENTS IN CASH, THE TECHNICAL REQUIREMENT SHOULD NOT COME IN THE WAY OF CLAIMING IT AS EXPENDITURE IN VI EW OF THE PROVISO TO SECTION 40A(3). AS NOTED FROM THE ASSESSMENT ORDER THAT THE ASSESSEE SUBMITTED CONFIRMATIONS FROM THE SURPANCHS OF THE VILLAGES WI TH REGARD TO NON4AVAILABILITY OF BANKING FACILITIES IN THE SAID VILLAGES ALONG WITH THE CONFIRMATION OF THE ADDRESS ES OF THE SELLER4FARMERS. THERE IS NOTHING ON RECORD TO S HOW THAT THE AO HAD MADE ANY ENQUIRIES IN THIS REGARD. ACCORDINGLY, AS DECIDED BY THE TRIBUNAL JAIPUR 'B' BENCH IN THE CASE OF SRI SALASAR OVERSEAS PVT. LTD. VS. D CIT (SUPRA) WHERE IT HAS BEEN HELD THAT THE ASSESSEE HAVING MAD E CASH PAYMENTS FOR PURCHASING LAND FROM FARMERS RESI DING IN VILLAGES WHERE THERE IS NO BANKING FACILITY, THE DISALLOWANCE CASH PAYMENT U/S. 40A(3) READ WITH RUL E 6DD(G) IS NOT WARRANTED. 8. FURTHER WE CAME ACROSS A DECISION OF THE CO4 ORDINATE BENCH IN THE CASE OF SAHITYA HOUSING PVT. LTD. VS. DCIT IN ITA NO. 246/HYD/2011. THE TRIBUNAL VIDE OR DER DATED 24.1.2014 HELD AS UNDER: '13. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIE S, PERUSED THE RECORD AND HAVE GONE THROUGH THE ORDERS OF THE REVENUE AUTHORITIES. SEC 40A(3) READS AS UNDER: PROVIDED THAT NO DISALLOWANCE SHALL BE MADE AND NO PAYMENT SHALL BE DEEMED TO BE THE PROFITS AND GAINS OF BUSINESS OR PROFESSION UNDER SUB SECTION (3) AND TH IS SUB SECTION WHERE A PAYMENT OR AGGREGATE OF PAYMENTS MA DE TO A PERSON IN A DAY, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE DRAWN ON A BANK OR ACCOUNT PAYEE BANK DRAFT, EXCEEDS TWENTY THOUSAND RUPEES IN SUCH CASES AND UN DER SUCH CIRCUMSTANCES AS MAY BE PRESCRIBED HAVING REGA RD TO THE NATURE AND EXTENT OF BANKING FACILITIES AVAI LABLE CONSIDERATIONS OF BUSINESS EXPENDITURE AND OTHER RELEVANT FACTORS. 8 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. 14. THE EXCEPTIONS TO THE APPLICATION OF SEC 40A(3 ) IS LAID DOWN IN RULE 6DDJ. RULE 6DD AFTER ITS AMENDMEN T FROM 1995, READS AS UNDER: RULE 6DD PRIOR TO 25.7.1995, CLAUSE (J) OF RULE 6DD OF THE I T RULES READ AS FOLLOWS: 6DD....... I) IN ANY OTHER CAUSE, WHERE THE ASSESSEE SATISFIES THE ASSESSING OFFICER THAT THE PAYMENT COULD NOT BE MAD E BY A CROSS CHEQUE DRAW ON A BANK OR BY A DRAWN ON A BA NK OR BY A CROSSED BANK DRAFT...... (1) DUE TO EXCEPTIONAL OR UNAVOIDABLE CIRCUMSTANCES OR (2) BECAUSE PAYMENT IN THE MANNER AFORESAID WAS NOT PRACTICABLE, OR WOULD HAVE CAUSED GENUINE DIFFICULT Y TO THE PAYEE, HAVING REGARD TO THE NATURE OF THE TRANS ACTION AND THE NECESSITY FOR EXPEDITIOUS SETTLEMENT THEREO F. AND ALSO FURNISHES EVIDENCE TO THE SATISFACTION OF THE ASSESSING OFFICER AS TO THE GENUINENESS OF THE PAYM ENT AND IDENTITY OF THE PAYEE. THE ABOVE CLAUSE (J) OF RULE 6DD HAS BEEN OMITTED B Y THE IT (FOURTEENTH AMENDMENT) RULES 1995 W.E.F. 27.5.1995. IT IS PERTINENT TO REFER AT THIS JUNCTUR E, TO THE DECISION OF HONBLE ANDHRA PRADESH HIGH COURT IN TH E CASE OF SMT. CH. MANGAYAMMA VS. UNION OF INDIA AND OTHERS (239 ITR 687), WHEREIN CONSIDERING THE CONSTITUTIONAL VALIDITY OF THE PROVISIONS OF S.40A( 3) OF THE ACT IN THE LIGHT OF THE ABOVE AMENDMENT MADE TO RULE 6DD OF THE IT RULES, THE HONBLE HIGH COURT OBSERVED AND HELD AT PAGE 693 OF THE REPORTS (239 I TR) AS FOLLOWS: IN VIEW OF THE AFORESAID PRINCIPLES AS LAID DOWN A ND THE OBJECT AS SOUGHT TO BE ACHIEVED U/S 40A(3) OF T HE ACT, ANY CHANGES MADE IN THE SUBORDINATE LEGISLATIO N WOULD NOT IN ANY WAY AFFECT THE SUBSTANTIVE PROVISI ON. 9 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. MOREOVER, BY DELETING THE CIRCUMSTANCES AS CONTEMPLATED EARLIER, VIZ., SUB CLAUSES (1) AND (2) OF RULE 6DD(J) THE OBJECTS OF CURBING THE CIRCULATION OF BLACK MONEY AND REGULATING THE BUSINESS TRANSACTION S BECOME MORE STRENGTHENED AND IT AVOIDS ANY UNDUE ADVANTAGE BEING TAKEN BY UNSCRUPULOUS ASSESSEES OR LITIGATION BEING MULTIPLIED. AS THE POSITION STANDS NOW 20% OF THE CASH TRANSACTIONS EXCEEDING RS. 20,000 A RE DISALLOWED IN COMPUTING THE BUSINESS EXPENDITURE BU T NOT THE ENTIRE RS. 20,000/- WHILE THE AMENDED PROVI SION CONFERS ADVANTAGE TO THE ASSESSEE TO THIS EXTENT, T HE CIRCUMSTANCES PERMITTED TO BE TAKEN INTO ACCOUNT BY THE ASSESSING AUTHORITY ARE NO LONGER AVAILABLE BY REAS ON OF DELETION OF OLD RULE 6DD(J). BUT THAT BY ITSELF DOE S NOT MAKE SECTION 40A(3) ARBITRARY AND UNCONSTITUTIONAL. ONE CANNOT PLEAD IGNORANCE OF LAW AND MAKE CASH PAYMENT S CONTRARY TO LAW. IT IS TOO LATE IN THE DAY TO ACCEP T ANY SUCH PROPOSITION. FURTHERMORE, IN THE PRESENT DAY BANKING SCENARIO, THE MODE OF PAYMENT BY WAY OF CROSSED CHEQUES OR DEMAND DRAFTS CANNOT BE SAID TO BE ONEROUS DUTY CASE ON AN ASSESSEE WHICH CAN BE MADE A FOUNDATION FOR ATTACKING THE VALIDITY OF THE SAID S ECTION. THEREFORE, IT IS NOT OPEN FOR ATTACKING THE PROVISI ON AS VIOLATIVE OF ANY PROVISION OF THE CONSTITUTION. THE RE IS NO ARBITRARINESS OR DISCRIMINATION IN THE SAID PROV ISION WARRANTING INTERFERENCE BY THIS COURT UNDER THE CIRCUMSTANCES. IN VIEW OF THE ABOVE THERE IS ABSOLUTELY NO MERITS IN THE CHALLENGE MADE AS TO THE VALIDITY OF SECTION 40A(3) OF THE ACT BY MERE DELETION OF SUB CLAUSES (1) AND (2) OF RULE 6DD(J). THE SAID PROVISION IS PERFECTLY VALID AND WE MAY HASTEN TO ADD THAT THE DELETION OF SUB CLAUSES (1) AND (2) OF RULE 6DD(J) IS ONLY A STEP FORWARD IN TH E ACHIEVEMENT OF THE AVOWED OBJECT ENVISAGED U/S 40A( 3) OF THE ACT. 15. THEREFORE THE ONLY EXCEPTION THAT THE ASSESSEE CAN CLAIM IS WHEN PAYMENTS ARE REQUIRED TO BE MADE ON D AYS WHEN THE BANKS WERE CLOSED ON ACCOUNT OF HOLIDAYS O R STRIKE. TRANSACTIONS AFTER THE BANKING HOURS IN THE COURSE OF REGULAR BUSINESS WILL NOT FALL WITHIN THI S EXCEPTION. IN THOSE TRANSACTIONS, THE PAYMENT IS NO T REQUIRED TO BE MADE WHEN THE BANKS ARE CLOSED I.E. AFTER BANKING HOURS. FURTHER THE PURPOSE OF THE DISALLOWA NCE U/S 40A (3) IS TO DISSUADE TRANSACTIONS BY CASH. 10 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. 16. SEC 40A(3) ITSELF PROVIDES THAT THE EXCEPTIONS WILL HAVE TO BE PRESCRIBED HAVING REGARD TO THE NATURE A ND EXTENT OF BANKING FACILITIES AVAILABLE, CONSIDERATI ONS OF BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS. TAK ING ALL THESE FACTORS, CONSIDERING THE NATURE OF ACTIVI TY OF THE ASSESSEE AND THE NECESSITY FOR THEM TO PAY CASH TO THE LAND OWNERS WE ARE OF THE OPINION THAT THE COND ITION UNDER RULE 6DD FOR EXEMPTION VIZ., TRANSACTIONS SHO ULD HAVE TAKEN PLACE ON BANK HOLIDAYS SHOULD BE READ DO WN IN THE CASE OF THE ASSESSEE. 17. IN THE CASE UNDER CONSIDERATION, NO BANKING FAC ILITY IS AVAILABLE WHERE THE PROPERTIES WERE PURCHASED BY ASSESSEE, THEREFORE, THERE WAS NO CHOICE FOR THE AS SESSEE EXCEPT TO MAKE THE PAYMENTS IN CASH DUE TO EXCEPTIO NAL OR UNAVOIDABLE CIRCUMSTANCES AS PROVIDED UNDER RULE 6DD. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE THE ORDER OF CIT(A) AND DELETE THE ADDITION OF RS. 4,09,98,105/- MADE U/S 40A(3) OF THE ACT.' 9. IN VIEW OF THE ABOVE DISCUSSION, SINCE THERE IS NO EVIDENCE BROUGHT ON RECORD BY THE AO TO SUGGEST THE AVAILABILITY OF BANKING FACILITY IN THE PLACE WHERE THE PROPERTIES WERE PURCHASED BY THE ASSESSEE, THEREFOR E, IN VIEW OF RULE 6DD(G) THE DISALLOWANCE CANNOT BE MADE U/S. 40A(3). HENCE, THE CIT(A) IS JUSTIFIED IN DEL ETING THE ADDITION. 10. REGARDING PAYMENT ON HOLIDAY AT RS. 69,29,000, THE DEPARTMENT CANNOT HAVE ANY GRIEVANCE ON THIS ISSUE AS THE CIT(A) DIRECTED THE AO TO VERIFY WHETHER CASH PAYMENTS DISALLOWED BY THE AO WERE MADE ON PUBLIC HOLIDAY AND IF IT IS SO TO ALLOW THE EXPENDITURE AS PER RULE 6DD(J) OF THE IT RULES. ACCORDINGLY, THIS GROUND OF THE REVENUE IS REJECTED. 11. NOW COMING TO SUSTAINING ADDITION OF RS. 3,15,6 5,263 WHERE PAYMENTS WERE MADE TO AGENTS. THE LEARNED AR SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS TH E ASSESSING OFFICER HAS SUMMONED THE AGENTS FOR VERIFICATION. OUT OF 7 AGENTS 6 HAVE APPEARED BEFO RE HIM (SEVENTH ONE COULD NOT APPEAR BECAUSE OF ILLNESS) A ND 11 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. CONFIRMED THAT THEY HAD ARRANGED THE SALE TRANSACTI ON FOR THE ASSESSEE COMPANY, AND THE SELLERS INSISTED ON C ASH PAYMENT. THEY HAVE ALSO CONFIRMED THAT THEY HAVE RECEIVED COMMISSION FROM THE ASSESSEE COMPANY FOR T HE SERVICES RENDERED, ON WHICH TDS WAS ALSO MADE. THE ASSESSING OFFICER HELD THAT THE SAID AGENTS ARE ONL Y BROKERS AND A BROKER CANNOT BE TREATED AS AN AGENT AND THE EXEMPTION UNDER RULE 6DD IS AVAILABLE ONLY IN R ESPECT OF PAYMENTS MADE THROUGH AN AGENT OF THE PARTY CONCERNED. THE AO WAS OF THE VIEW THAT THE AGENTS UTILISED THE VEHICLES PROVIDED BY THE COMPANY TO HA ND OVER THE CASH TO THE INTENDED AGRICULTURISTS WHICH GOES TO PROVE THAT THEY WERE ACTING ONLY AS MESSENGERS OF T HE EMPLOYEES OF THE ASSESSEE4COMPANY. 12. THE AR SUBMITTED THAT AS PER RULE 6DD(K) WHICH SAYS 'WHERE THE PAYMENT IS MADE BY ANY PERSON TO HIS AGE NT WHO IS REQUIRED TO MAKE PAYMENT IN CASH FOR GOODS OR SERVI CES ON BEHALF OF SUCH PERSON' EXEMPTION IS AVAILABLE FOR CASH PAYMENTS U/S. 40A(3). THE REQUIREMENT IS THE PAYMENT SHOULD HAVE BEEN MADE TO AN AGENT WHO IS REQUIRED TO MAKE PAYMENT IN CASH FOR GOODS OR SERVICES ON BEHALF OF THE PERSON FOR WHOM HE IS ACTING AS AN AGENT. IT MAY BE NOTED THAT THE EXEMPTION UNDER RULE 6DD(K) IS AVAILABLE ONLY IN RE SPECT OF CASH PAYMENTS MADE TO AN AGENT, HENCE, IT IS IMPORTANT TO KNOW THE MEANING OF 'AGENT' VIS4A4VIS 'BROKER'. THE WORDS 'AGENT' & 'BROKER' ARE NOT DEFI NED IN THE IT ACT. THERE IS NO DEFINITION OF THE TERM 'AGE NT' IN SECTION 40(A)(3) OR IN SECTION 2 OF THE ACT. AS PE R WELL SETTLED PRINCIPLES, WHEN THERE IS NO STATUTORY DEFI NITION OF A WORD, THE MEANING OF THE TERM SHOULD BE ASCERTAINED BY APPLYING COMMON PARLANCE TEST VIZ., AS THE WORD IS UNDERSTOOD IN THE POPULAR SENSE I.E., THE MEANING ATTACHED TO SUCH EXPRESSION IN THE PARTICULAR TRADE CIRCLE INSTEAD OF ATTACHING A TECHNICAL MEANING. 13. ON THE OTHER HAND, THE LEARNED DR SUBMITTED THA T THE DIFFERENCE IN THE MEANING OF 'AGENT' AND 'BROKE R' IS VERY THIN AND THE EXPRESSION 'AGENT' USED IN RULE 6 DD(K) 12 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. CONNOTES TO AGENTS OF THE COMPANY BUT IN THE PRESEN T CASE THE ASSESSEE USED THE SERVICES OF LOCAL VILLAG ERS / AGRICULTURISTS TO BROKER THE DEAL BETWEEN THE COMPA NY AND THE SELLERS AND THEREFORE, THE SAID PEOPLE CANN OT BE TERMED AS AGENTS OF THE COMPANY. IT IS COMMON KNOWLEDGE THAT EMPLOYING BROKERS IS A COMMON PRACTI CE AMONG REAL ESTATE DEALS AND IF THE INTENTION OF THE LEGISLATURE IS TO EXEMPT CASH PAYMENTS MADE THROUGH MIDDLEMEN FROM THE PURVIEW OF SECTION 40A(3) THEY W OULD HAVE INDICATED ACCORDINGLY. THE FACT THAT RULE 6DD( K) SPECIFICS PAYMENTS MADE THROUGH AGENTS IT IS IMPORT ANT TO EXAMINE THE SERVICES RENDERED BY THE 7 PERSONS TO C OME TO THE CONCLUSION WHETHER THEY ARE AGENTS OF THE COMPANY OR BROKERS WHO RENDERED SERVICES FOR COMMISSION. HE DREW OUR ATTENTION TO THE STAT EMENTS GIVEN BY THE 6 PERSONS AND THE RELEVANT QUESTIONS A ND ANSWERS ARE REPRODUCED AS UNDER: 'SWORN STATEMENT OF TADIBONDA VENKATESWARA RAO, OCC UPATION SHOWN US AGRICULTURIST AND REAL ESTATE AGENT. Q.7 PLEASE EXPLAIN THE MODUS OPERANDI OF SERVICES R ENDERED? A. 7 ABHINANDANA PEOPLE APPROACHED ME JAR ACQUIRIN G OF LAND. I INTRODUCE THE COMPANY'S PEOPLE TO THE INTERESTED FARMERS AND I ACTED AS AGENT BETWEEN THE TWO PARTIES. I PARTICIPATE IN THE NEGO TIATION PROCESS ALSO. MY RESPONSIBILITY ENDS WITH REGISTRATION. BECAUSE I AM ILLITERATE, I TAKE SUPPORT FROM MY NEPHEW, G. SRINIVASA RAO. Q. 15 ON YOUR OWN, DID YOU MAKE ANY ADVANCES TO THE LANDLORDS? A. 15 NO. I DID NOT MAKE ANY PAYMENTS TO FANNERS O N BEHALF OF ABHINANDANA. Q. 16 SO, YOU ARE NOT INVOLVED IN PAYING ANY AMOUN TS TO LANDLORDS? A. 16 ON MY OWN, I DID NOT GIVE ANY AMOUNTS. AFTER DEAL STRUCK, CASH WILL BE WILL BE PAID BY ABHINANDANA TO THE FARMERS THROUGH ME. IF THERE IS BIG AMOUNT, FARMERS WILL COME TO THE COMPANY. IF THERE ARE LITTLE AMOUNTS, I TAKE THE MONEY FROM ABHINANDANA AND THE SAME ARE PA ID TO THE FARMERS. EVERY TRANSACTION WAS ROUTED THROUGH BY ME ONLY. AS SUBMITTED EARLIER, IN ALL THESE TRANSACTIONS, I USE TO TAKE SUPPORT FR OM MY NEPHEW. Q. 22 AT ANY TIME, DID ABHINANDANA PAY THE AMOUNT TOWARDS COST OF LAND BY CHEQUES INTO YOUR ACCOUNT? A. 22 NO, ALL THE AMOUNTS PAID IN CASH ONLY TO ME, TOWARDS COMMISSION INCOME. Q. 23 HAVE YOU GIVEN ANY RECEIPTS IN RESPECT OF CA SH RECEIVED BY YOU ON BEHALF 13 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. OF LANDLORDS? A. 23 I GIVE RECEIPTS TO ABHINANDANA IN PROOF OF C ASH TAKEN BY ME. AFTER RECEIPT FROM THE LANDLORDS, I TAKE BACK THE INITIA L RECEIPT GIVEN BY ME TO ABHINANDANA. Q. 28 THOUGH YOU HAVE GOT TDS, YOU HAVE NOT FILED Y OUR IT RETURNS. A. 28 I DO NOT KNOW ABOUT THESE PROCEDURES HENCE TH E FAILURE TO SUBMIT THE ROI. SWORN STATEMENT OF SRI M. RAJA VENKATESWARA RAO Q. 3 PLEASE EXPLAIN THE FULL DETAILS OF BROKERAGE INCOME? A. 3 I USE TO BROKERAGE LANDS FOR ABHINANDANA. IN VERY FEW CASES, I DID SO FOR OTHERS. PER YEAR, THE INCOME ON BROKERAGE WILL BE AROUND RS. 2 TO 2.5 LAKHS. I USE TO GET AT LEASE RS. 5,000 PER ACRE AN D UP TO RS. 35,000. I ASSISTED IN PURCHASING LAND FOR ONE MR. SUSHIL KUMA R WHO RESIDES IN USA. ANOTHER PERSON WAS C. RAVI KUMAR, WHO RESIDES AT CHENNAI. Q. 6 PLEASE FURNISH FULL DETAILS OF YOUR BROKERAGE INCOME. WHAT WAS THE BASIS OF DETERMINATION OF BROKERAGE INCOME AND WHAT ARE T HE DUTIES AND RESPONSIBILITIES AS COMMISSION AGENT? A. 6 I AM ACTING AS BROKERAGE AGENT FOR PURCHASE O F LAND FOR THE LAST 7 YEARS. I HAVE BEEN RELATED TO ABHINANDANA HOUSING PVT. LTD . FOR THE LAST 5 YEARS. THERE IS NO RATE OF FIXED RATE OF COMMISSION I GOT. THEY USE TO GIVE ON A RANDOM BASIS. AS THERE IS NO INVESTMENT ON MY SIDE, I USE TO TAKE WHATEVER THE COMMISSION INCOME AS MY EXTRA INCOME O NLY. WE IDENTIFY PROSPECTIVE FARMERS WHO ARE WILLING TO SELL LAND AN D INTRODUCE THE SAME TO THE COMPANY. I USE TO ACT AS MEDIATOR FROM THE A GREEMENT STAGE TILL THE REGISTRATION. Q. 11 ON YOUR OWN, DID YOU MAKE ANY ADVANCES TO TH E LAND LORDS? A. 11 NO. I DID NOT MAKE ANY PAYMENTS TO FARMERS O N BEHALF OF ABHINANDANA. Q. 12 SO, YOU ARE NOT INVOLVED IN PAYING ANY AMOUN TS TO LANDLORDS? A, 12 ON MY OWN, I DID NOT GIVE ANY AMOUNTS; AFTER DEAL STRUCK, CASH WILL BE PAID BY ABHINANDANA TO THE FANNERS THROUGH ME. I TA KE THE MONEY FROM ABHINANDANA AND THE SAME ARE PAID TO THE FARMERS. EVERY TRANSACTION WAS ROUTED THROUGH BY ME ONLY. THE COMPANY USED TO PROVIDE VEHICLE(S) FOR THESE TRANSACTIONS. SWORN STATEMENT OF SRI K. SURESH KUMAR Q. 6 PLEASE FURNISH FULL DETAILS OF YOUR COMMISSIO N INCOME. WHAT WAS THE BASIS OF DETERMINATION OF COMMISSION INCOME AND WHA T ARE THE DUTIES AND RESPONSIBILITIES AS COMMISSION AGENT? A. 6 I AM ACTING AS COMMISSION AGENT FOR PURCHASE OF LAND FOR SINCE THE YEAR 2005 FOR ABHINANDANA HOUSING PUT. LTD. THERE IS NO RATE OF FIXED RATE OF COMMISSION, I GOT. THEY USE TO GIVE ON A RANDOM BAS IS. AS THERE IS NO 14 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. INVESTMENT ON MY SIDE, 1 USE TO TAKE WHATEVER THE C OMMISSION INCOME AS MY EXTRA INCOME ONLY. WE IDENTIFY PROSPECTIVE FARME RS WHO ARE WILLING TO SELL LAND AND INTRODUCE THE SAME TO THE COMPANY. 1 USE TO ACT US MEDIATOR FROM THE AGREEMENT STAGE TILL THE REGISTR ATION. SWORN STATEMENT OF MUNNANGI SIVA SESHAIAH Q. 6. PLEASE EXPLAIN THE MODUS OPERANDI OF SERVICE S RENDERED? A. 6 ABHINANDANA PEOPLE APPROACHED ME FOR ACQUIRIN G OF LAND. I INTRODUCE THE COMPANY'S PEOPLE TO THE INTERESTED FARMERS AND I ACTED AS AGENT BETWEEN THE TWO PARTIES. I PARTICIPATE IN THE NEGOT IATION PROCESS ALSO. SWORN STATEMENT OF BASHYAM HARI BABU Q. 5 PLEASE FURNISH THE DETAILS OF SOURCE OF YOUR INCOME. A. 5 I CULTIVATE ON BEHALF OF MY OWN AND MY DECEAS ED BROTHER-IN-LAW'S AGRICULTURAL LAND. OUT OF THE SAME, 1 ACRE ON MY WI FE'S NAME. MY ANOTHER SOURCE OF INCOME IS COMMISSION OF REAL ESTA TE BROKING. DURING THE YEAR 2008-09, 1 EARNED ABOUT RS. 1.30 LAKHS. I N THE PREVIOUS YEARS, IT WAS ABOUT RS. 40 TO 50 THOUSAND. IN 2010, I TOOK RS. 37,000/- AND IN 2011 TILL TODAY, 1 GOT AROUND RS. 20,000/-. Q. 6 PLEASE FURNISH FULL DETAILS OF YOUR COMMISSIO N INCOME. WHAT WAS THE BASIS OF DETERMINATION OF COMMISSION INCOME AND WHA T ARE THE DUTIES AND RESPONSIBILITIES AS COMMISSION AGENT? A. 6 I AM DOING REAL ESTATE WORKS SINCE 2004. I OF FER SERVICES ONLY FOR ABHINANDANA. IN VERY FEW CASES, I OFFERED TO PRIVA TE PARTIES. PER ACRE I EARN UP TO RS. 20,000. MEKALA SRINIVASA RAO (KUNCHA NAPALLI), THOTAKURA SRINIVAS (PORANKI) (TO MY MEMORY GOES). 14. THE DR SUBMITTED THAT FROM THE ABOVE STATEMENTS IT IS APPARENT THAT THE ABOVE SAID PARTIES ARE NOT THE AGENTS OF THE COMPANY BUT THEY WORKED AS MIDDLEMEN AND OFFERED THE SERVICES TO OTHER PARTIES AS WELL A ND THIS DISTINGUISHES THE BROKERS FROM THE AGENTS AND HENCE , THE CONTENTION OF THE ASSESSING OFFICER THAT THE ALLEGE D AGENTS WERE JUST MIDDLE MEN/BROKER PROVIDING SERVIC ES FOR COMMISSION BUT NOT AGENTS AND HENCE, THE EXEMPTION CLAUSE (K) UNDER RULE 6DD OF IT RULES DOES NOT APPL Y, APPEARS CORRECT. ACCORDINGLY, THE CASH PAYMENTS MA DE THROUGH THIRD PARTIES CANNOT BE BROUGHT UNDER THE EXEMPTION CLAUSE AND THE ASSESSING OFFICER IS JUSTI FIED IN DISALLOWING THE PAYMENT MADE IN CASH IN CONTRAVENTI ON OF THE PROVISIONS OF SECTION 40A(3) AND, THEREFORE, TH E DISALLOWANCE OF RS. 3,15,65,263 IS JUSTIFIED. 15 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. 15. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATERIAL ON RECORD. THE STRONG CONTENTION OF THE DEPARTMENT IS THAT THE ABOVE AGENTS WORKED FOR OTHE R PERSONS AS AGENTS AND THEY CANNOT BE AGENTS TO THE ASSESSEE. THERE IS NO PROHIBITION OR RESTRICTION ON A MIDDLEMAN TO WORK AS AGENT OF DIFFERENT PARTIES, IF HE WAS ACTING ON BEHALF OF THE ASSESSEE AS AGENT. THE ASS ESSEE'S CASE FALLS UNDER THE PURVIEW OF CLAUSE 6DD(K) OF IT RULES, 1962. BEING SO, EXEMPTION IS TO BE GIVEN AND ADDIT ION CANNOT BE MADE U/S. 40A(3) OF THE ACT. THE REASONS ADVANCED BY THE DEPARTMENT ARE NOT APPROPRIATE. ACCORDINGLY, WE ARE INCLINED TO ALLOW THE CLAIM OF THE ASSESSEE AT RS. 3,15,65,263. 16 REGARDING THE BALANCE AMOUNT OF RS. 4,25,000, TH E ASSESSEE CANNOT HAVE ANY GRIEVANCE, SINCE THE ASSES SEE BEFORE THE CIT(A) SUBMITTED THAT THIS PAYMENT OF RS . 4,25,000 PERTAINS TO THE VILLAGE OF PEDAVADLAPUDI A ND IT WAS WRONGLY CLAIMED BY THE ASSESSEE THAT NO BANKING FACILITY WAS AVAILABLE IN THAT VILLAGE. BUT, IN FA CT, THERE IS BANKING FACILITIES AVAILABLE IN THAT VILLAGE. BEIN G SO, THIS PAYMENT CANNOT BE COVERED BY RULE 6DD(G) OF IT RULE S. ACCORDINGLY, TO THAT EXTENT, THIS ISSUE IS DECIDED AGAINST THE ASSESSEE. IT IS ALSO NOTED THAT THE AMOUNT MEN TIONED BY THE ASSESSEE IN ITS APPEAL AT RS. 3,21,65,268 IS NOT CORRECT. INSTEAD, IT SHOULD BE RS. 3,19,90,263 AS IT COMPRISES OF ONE AMOUNT OF RS. 3,15,65,263 AND ANOT HER AMOUNT OF RS. 4,25,000, AS DISCUSSED ABOVE. APPEA L OF THE ASSESSEE IS PARTLY ALLOWED. AS FACTS IN THE PRESENT APPEAL ARE MATERIALLY SAME AND THE DEPARTMENT HAS FAILED TO BRING ANY MATERIAL ON RECO RD TO SHOW THAT FACTS IN THE IMPUGNED ASSESSMENT YEAR ARE IN ANY WA Y DIFFERENT FROM FACTS CONSIDERED BY THE COORDINATE BENCH, RESPECTFU LLY FOLLOWING THE AFORESAID DECISION OF THE COORDINATE BENCH, WE UPHO LD THE ORDER OF LD. CIT(A) AND DISMISS THE GROUNDS RAISED BY REVENUE IN THIS REGARD. 16 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. 13. AS FACTS AND ISSUES IN ITA NO. 1321/HYD/2014 IS IDENTICAL TO THE FACTS AND ISSUES ITA NO. 1320/H/14, FOLLOWING OUR DECISION THEREIN WE UPHOLD THE ORDER OF LD. CIT(A) AND DISMI SS THE APPEAL OF THE DEPARTMENT. 14. IN THE RESULT, BOTH THE APPEALS OF THE DEPARTM ENT ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 03/12/2014. SD/- SD/- (B. RAMAKOTAIAH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JU DICIAL MEMBER HYDERABAD, DATED: 3 RD DECEMBER, 2014 KV COPY TO:- 1) DCIT, CIRCLE 1(1), 4 TH FLOOR, , BASHEERBAG, HYD-1. 2) M/S ABHINANDANA HOUSING PVT. LTD., H. NO. 6-3-34 7/9/N/1, OFFICE PREMISES NO. 303, 3 RD FLOOR, NV PLAZA, DWARAKAPURI COLONY, HYDERABAD. 3) CIT(A)-II, HYDERABAD 4) CIT-I, HYDERABAD 5)THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDER ABAD. 17 ITA NOS.1320 & 1321/HYD/2014 M/S ABHINANDANA HOUSING PVT. LTD. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S. 2. DRAFT PLACED BEFORE AUTHOR SR.P.S 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER VP 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P S. 7. FILE SENT TO THE BENCH CLERK SR.P.S. 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER