NEERAJ SUWALKA, Jaipur V. DCIT, Jaipur

ITA 159/JPR/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1383 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 22-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Keywords: Related party transaction; Business income; Search and seizure; Document seized; Reasonable cause; Condonation of delay; Documents seized; Rule 8D
• Section: 40A(3); 143(3); 153A; 271D; 132; 10

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 158 TO 160/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2007-08, 2008-09 & 2012-13 SHRI NEERAJ SUWALKA MATAJI ROAD, KUNHARI, KOTA. CUKE VS. THE DCIT, CENTRAL CIRCLE- 3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ADUPS 2242 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MANISH AGARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI B.K. GUPTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 05/12/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 12/12/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE THREE APPEALS FILED BY THE ASSESSEE AGAIN ST THE RESPECTIVE ORDERS OF LD. CIT(A)-4, JAIPUR DATED 20. 12.2016, 21.12.2016 & 22.12.2016 FOR THE ASSESSMENT YEARS 2007-08, 2008 -09 & 2012-13 RESPECTIVELY. SINCE COMMON ISSUES ARE INVOLVED, ALL THESE APPEALS WERE HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDE R. 2. FIRSTLY WE TAKE UP THE APPEAL OF THE ASSESSEE IN ITA NO. 158/JP/2017 FOR A.Y. 2007-08. AT THE OUTSET IT IS N OTED THAT THE APPEAL ITA NO. 158 TO 160/JP/2017 SHRI NEERAJ SUWALKA VS. DCIT 2 OF THE ASSESSEE IS DELAYED BY TWO DAYS. THE ASSESSE E HAS MOVED AN APPLICATION FOR SEEKING CONDONATION OF DELAY ALONG WITH AFFIDAVIT STATING THE REASONS WHICH HAS CAUSED THE DELAY IN FILING TH E PRESENT APPEAL. AFTER HEARING BOTH THE PARTIES, WE FIND THAT THERE WAS REASONABLE CAUSE FOR DELAY IN FILING THE APPEAL WHICH IS HEREBY COND ONED AND THE APPEAL IS ADMITTED FOR ADJUDICATION. 3. THE LD. AR ALSO SUBMITTED THAT THE ASSESSEE HAS MOVED A PRAYER FOR ADMISSION OF ADDITIONAL GROUND OF APPEAL WHICH READS AS UNDER:- 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. ASSESSING OFFICER HAS GROSSLY ERRED IN COMPLETING T HE ASSESSMENT U/S 143(3) RWS 153A OF THE INCOME TAX ACT, 1961 EVE N WHEN NO INCRIMINATING PAPER WHATSOEVER WAS FOUND AS A RESUL T OF SEARCH PERTAINING TO THE YEAR UNDER APPEAL, AND THE ADDITI ON HAS BEEN MADE BY LD. AO WITHOUT REFERRING TO ANY SINGLE MATE RIAL FOUND DURING SEARCH THUS THE CONSEQUENT ORDER PASSED DESE RVES TO BE QUASHED. 3.1 THAT THE LD. AO HAS FURTHER ERRED IN MAKING ADD ITIONS U/S 143(3) RWS 153A TO THE RETURNED INCOME OF ASSESS EE IN THE ABSENCE OF INCRIMINATING DOCUMENTS, PARTICULARLY WH EN NO ASSESSMENT PROCEEDINGS WERE PENDING BEFORE THE LD. AO AS ON THE DATE OF SEARCH, THEREFORE, THE ORDER OF LD. AO DESERVES TO BE HELD BAD IN LAW AND THE CONSEQUENT ADDITIONS DESERV E TO BE DELETED. 4. THE LD. AR HAS SUBMITTED THAT THE ADDITIONAL GRO UND IS PURELY A LEGAL GROUND AND IT GOES TO THE ROOT OF THE MATTER, THE SAME SHOULD BE ADMITTED IN THE INTEREST OF JUSTICE. IN SUPPORT, RE LIANCE WAS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN CASE OF NA TIONAL THERMAL POWER CORPORATION LTD. VS. CIT 229 ITR 383. AFTER H EARING BOTH THE ITA NO. 158 TO 160/JP/2017 SHRI NEERAJ SUWALKA VS. DCIT 3 PARTIES, THE ADDITIONAL GROUND BEING A PURELY LEGAL GROUND, THE SAME IS BEING ADMITTED FOR ADJUDICATION. 5. IN ADDITION TO THE ABOVE, THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL WHICH READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING ADDITION OF RS. 16,85,800/- MADE BY LD. AO U/S 40A(3) OF THE INCOME TAX ACT, AR BITRARILY THEREFORE, THE ADDITION SO MADE DESERVED TO BE DELE TED. 1.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IN CONFIR MING THE ADDITION MADE BY LD. AO IGNORING THE SUBMISSION OF THE ASSESSEE THAT NONE OF THE PAYMENT WAS MADE IN THE CONTRAVENT ION OF SECTION 40A(3) AND FURTHER ASSESSEE WAS COMPELLED T O MADE CASH PAYMENTS ON ACCOUNT OF PECULIAR SITUATIONS IN INSIS TENCE UPON BY THE SELLERS, THUS APPELLANT PRAYS ADDITION SO MADE MAY PLEASE BE DELETED. 6. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CARRIE D OUT ON 19.12.2012 IN CASE OF SUWALKA GROUP TO WHICH THE ASSESSEE BELO NGS. SUBSEQUENTLY NOTICE U/S 153A OF THE ACT WAS ISSUED TO THE ASSESS EE ON 22.10.2013 REQUIRING HIM TO FURNISH THE RETURN OF INCOME. IN R ESPONSE, THE ASSESSEE FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME O F RS. 1,17,96,460/- AND THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 153A OF THE ACT WHEREIN THE AO MADE A DISALLOWANCE OF RS. 11,25,80 0/- INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE ACT. IT WAS SUB MITTED THAT ASSESSMENT IN THIS CASE WAS ORIGINALLY COMPLETED U/ S 143(3) OF THE ACT VIDE ORDER DATED 30.05.2009 AND THEREFORE, AT THE T IME OF SEARCH, THE ASSESSMENT WAS NOT PENDING AND THEREFORE, IN THE AB SENCE OF ANY ITA NO. 158 TO 160/JP/2017 SHRI NEERAJ SUWALKA VS. DCIT 4 INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH, NO ADDITIONS CAN BE MADE IN THE HANDS OF THE ASSESSEE. IT WAS SUBMITTED THAT IN THE INSTANT CASE THE TRANSACTIONS FOR PURCH ASE OF LAND WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE, A FACT WHICH HAS BEEN ACCEPTED BY THE AO. IT WAS ACCORDINGLY SUBMITT ED THAT EVEN THOUGH CERTAIN DOCUMENTS WERE FOUND AS A RESULT OF SEARCH HOWEVER, THE SAME CANNOT BE TERMED AS INCRIMINATING DOCUMENT S AS THE TRANSACTIONS WERE DULY RECORDED IN THE BOOKS OF ACC OUNTS AND WHICH WERE EXAMINED BY THE AO DURING THE COURSE OF PROCEE DINGS U/S 143(3) OF THE ACT. FURTHER, RELIANCE WAS PLACED ON THE DEC ISION OF HONBLE OF RAJASTHAN HIGH COURT IN CASE OF JAI STEEL (INDIA) V S. ACIT 259 CTR 281, DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS. KABUL CHAWLA 380 ITR 573 AND IN CASE OF PR. CIT VS. MEETA GUTGUT IA (IN ITA NO. 306 TO 310/2017 DATED 25.05.2017) AND THE DECISION OF THE JAIPUR BENCH OF THE TRIBUNAL IN CASE OF DR. VIKRAM GOYAL VS. DCIT (IN ITA NO. 174/JP/2017 DATED 24.08.2017) . IT WAS ACCORDINGLY SUBMITTED THAT IN THE ABSENCE OF ANY INCRIMINATING DOCUMENTS FOUND DU RING THE COURSE OF SEARCH, THE ADDITION MADE BY THE AO SHOULD BE DELET ED. 7. PER CONTRA, THE LD. CIT DR SUBMITTED THAT IN THI S CASE, THE DOCUMENTARY EVIDENCE PERTAINING TO CASH PAYMENT HAV E BEEN FOUND AND SEIZED FROM THE ASSESSEE DURING THE COURSE OF S EARCH PROCEEDING AND THE SAME ARE CLEARLY INCRIMINATING DOCUMENTS FO UND DURING THE COURSE OF SEARCH IN THE CASE OF THE ASSESSEE. IT WA S SUBMITTED THAT ON THE BASIS OF SALE DEEDS FOUND AND SEIZED DURING THE COURSE OF SEARCH REFLECTING CONSIDERATION DISCHARGED IN CASH, THE AD DITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER INVOKING THE PROVISIO NS OF SECTION 40A(3) ITA NO. 158 TO 160/JP/2017 SHRI NEERAJ SUWALKA VS. DCIT 5 OF THE ACT. IT WAS FURTHER SUBMITTED THAT THERE IS NO BAR UNDER LAW THAT ADDITION CANNOT BE MADE U/S 40A(3) IN CASE OF SEARC H PROCEEDINGS. AND IN SUPPORT, RELIANCE WAS PLACED ON THE DECISIONS OF THE HONBLE CALCUTTA HIGH COURT IN CASE OF CIT VS. MOHANLAL AGARWAL 88 T AXMANN.COM 508 AND DECISION OF THE COORDINATE BENCH IN CASE OF R. SRINIVAS RAJU VS. ACIT 71 TAXMANN.COM 129. HE ACCORDINGLY SUPPORTED T HE FINDINGS OF THE LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE, THE ASSESSEE HAS ORIGINALLY FILED HIS RETURN OF INCOME ON 30.11.2007. A SURVEY OPERATION WAS CARRIED OUT ON 09.11.2006 AND PURSUANT TO THAT, THE ASSESSEE MADE A DISCLOSURE ON RS. 2.50 CRORES WHICH INCLUDES RS. 50,00,000/- FOR A.Y. 2007-08 AND AN APPLICATION WAS MOVED BEFORE THE HONBLE SETTLEMENT COMMISSIONER WHO VIDE ITS ORDER PASSED U/S 245D(4) DATED 6.11.20 08 HAS ACCEPTED THE ASSESSEES APPLICATION. THE SCRUTINY PROCEEDIN GS WHICH WERE ORIGINALLY INITIATED BY ISSUANCE OF NOTICE U/S 143( 2) WERE THEREFORE, DROPPED VIDE ORDER DATED 13.05.2009 PASSED BY THE A SSESSING OFFICER CIRCLE, KOTA STATING SINCE THE ASSESSEE CASE FOR A. Y. 2007-08 HAS BEEN DECIDED BY THE HONBLE SETTLEMENT COMMISSION U/S 24 5D(4) OF THE ACT PROCEEDING ARE HEREBY DROPPED. THEREAFTER, ON 19.1 2.2012 A SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CARRIED O UT IN CASE OF SUWALKA GROUP, KOTA TO WHICH THE ASSESSEE BELONGS. IN RESPO NSE TO THE NOTICE U/S 153A OF THE ACT, THE ASSESSEE FILED HIS RETURN OF INCOME ON 23.12.2013 DECLARING TOTAL INCOME OF RS. 1,17,96,46 0/- WHICH INCLUDES THE ADDITIONAL INCOME OF RS. 50,00,000/- WHICH WAS OFFERED EARLIER BEFORE THE HONBLE SETTLEMENT COMMISSION AND WHICH WAS ACCEPTED ITA NO. 158 TO 160/JP/2017 SHRI NEERAJ SUWALKA VS. DCIT 6 VIDE ORDER DATED 06.11.2008. THEREFORE, AS ON THE DATE OF SEARCH I.E. ON 19.12.2012, THE ORIGINAL ASSESSMENT PROCEEDINGS STOOD COMPLETED AND WERE NOT ABATED. THERE IS NO DISPUTE ON THE LEG AL PROPOSITION THAT ADDITION U/S 40A(3) CAN BE MADE WHILE COMPLETING TH E ASSESSMENT OR REASSESSMENT U/S 153A OF THE ACT. HOWEVER, IT IS A LSO A SETTLED LEGAL PROPOSITION THAT IN CASE OF COMPLETED ASSESSMENT WH ICH WAS NOT ABATED AS ON THE DATE OF SEARCH, THE REASSESSMENT CAN BE M ADE U/S 153A OF THE ACT ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THEREFORE, WHAT IS THE RELEVANT T O DETERMINE IN THE INSTANT CASE IS WHETHER ANY INCRIMINATING DOCUMENT WAS FOUND DURING THE COURSE OF SEARCH IN THE CASE OF THE ASSESSEE AN D BASIS WHICH THE ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER. DURING THE COURSE OF SEARCH OPERATION, THE DOCUMENTARY EVIDENCES IN F ORM OF SALE DEEDS WHEREIN CASH PAYMENT WERE MADE TOWARDS PURCHASE OF LAND LOCATED WITHIN THE MUNICIPAL LIMITS WERE FOUND AND SEIZED F ROM THE ASSESSEES PREMISES. THE CASE OF THE ASSESSEE IS THAT WHAT HAS BEEN FOUND DURING THE COURSE OF SEARCH CANNOT BE TERMED AS INCRIMINAT ING MATERIAL BECAUSE THE TRANSACTIONS FOR PURCHASE OF LANDS WERE DULY RECORDED IN THE SALE DEEDS WHICH WERE FOUND DURING THE COURSE O F SEARCH AND THESE TRANSACTIONS ARE DULY REFLECTED AND RECORDED IN THE BOOKS OF ACCOUNTS REGULARLY MAINTAINED BY THE ASSESSEE. IT WAS FURTHE R SUBMITTED THAT FROM THE PERUSAL OF THE LEDGER ACCOUNTS, IT IS APP ARENTLY CLEAR THAT NOT JUST THE TRANSACTIONS HAVE BEEN REFLECTED, EVEN PAY MENT OF CASH HAS BEEN DULY REFLECTED IN THE BOOKS OF ACCOUNT. IT WAS ACCORDINGLY SUBMITTED THAT SINCE TRANSACTIONS FOR PURCHASE OF L AND THROUGH PAYMENT OF CASH HAS BEEN DULY RECORDED IN THE BOOKS OF ACCO UNTS, THE SEIZED DOCUMENTS IN THE FORM OF THE SALE DEEDS CANNOT BE T ERMED AS ITA NO. 158 TO 160/JP/2017 SHRI NEERAJ SUWALKA VS. DCIT 7 INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH. WE FIND FORCE IN THE ARGUMENTS OF THE LD. AR AND ARE OF THE OPINION THAT THE SALE DEEDS SO FOUND DURING THE COURSE OF SEARCH CANNOT B E TERMED AS INCRIMINATING DOCUMENTS AS THE TRANSACTIONS SO REFL ECTED IN THE SALE DEEDS AND IN RESPECT OF WHICH THE CONSIDERATION HAS BEEN DISCHARGED IN CASH HAS BEEN DULY RECORDED IN THE BOOKS OF ACCOUNT . THE LEDGER ACCOUNTS SHOWS CLEARLY PURCHASE OF LAND FROM THE RE SPECTIVE SELLERS AND THE PAYMENTS MADE THROUGH CASH. THEREFORE, IT IS N OT A CASE WHERE ONLY THE TRANSACTIONS HAVE BEEN REFLECTED IN THE BO OKS OF ACCOUNTS RATHER EVEN THE MODE OF DISCHARGE OF THE CONSIDERAT ION I.E. THROUGH CASH HAS BEEN DULY REFLECTED IN THE BOOKS OF ACCOUN T. THEREFORE, FOLLOWING THE SETTLED LEGAL PROPOSITION AS LAID DOW N BY THE HONBLE RAJASTHAN HIGH COURT IN CASE OF JAI STEEL INDIA VS. ACIT AND OTHER DECISION OF THE DELHI HIGH COURT SUCH AS CIT VS. KA BUL CHAWLA AND OTHERS WHICH HAVE LAID DOWN SIMILAR LEGAL PROPOSITI ON, GIVEN THAT NO INCRIMINATING DOCUMENTS HAVE BEEN FOUND DURING THE COURSE OF SEARCH, THE ADDITION SO MADE BY THE ASSESSING OFFICER INVOK ING THE PROVISIONS OF SECTION 40A(3) OF THE ACT CANNOT BE SUSTAINED IN TH E EYE OF LAW. THE ADDITIONAL GROUND SO TAKEN BY THE ASSESSEE IS ALLOW ED. 9. THE OTHER GROUNDS ON MERITS THUS BECOME ACADEMIC AND EVEN NOT PRESSED BY THE LD AR DURING THE COURSE OF HEARING A ND HENCE, THE SAME ARE DISMISSED. IN THE RESULT, THE APPEAL OF THE A SSESSEE IS ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ITA NO. 158 TO 160/JP/2017 SHRI NEERAJ SUWALKA VS. DCIT 8 11. IN ITA NO. 159/JP/2017 FOR THE A.Y. 2008-09, TH E LD. CIT(A) HAS RETURNED A FINDING THAT SINCE THE TRANSACTIONS/ REG ISTRY BEFORE THE STAMP DUTY AUTHORITY WERE COMPLETED DURING F.Y. 2006-07 R ELEVANT TO ASSESSMENT YEAR 2007-08, THE ADDITION MADE BY THE A O ON ACCOUNT OF DISALLOWANCE MADE U/S 40A(3) OF THE ACT ON THE CASH PAYMENT OF RS. 28,00,000/- SHOULD BE MADE IN AY 2007-08 INSTEAD OF AY 2008-09 AND THE AO WAS DIRECTED TO CONSIDER THE ADDITION U/S 40 A(3) OF THE ACT IN A.Y. 2007-08. 12. DURING THE COURSE OF HEARING, BOTH THE PARTIES FAIRLY ADMITTED THE TRANSACTIONS OF PURCHASE OF LAND PERTAINS TO A.Y. 2 007-08 AND NOT A. Y 2008-09 HENCE, WE NOT SEE ANY INFIRMITY IN THE SAID DIRECTION OF THE LD. CIT(A) AND THE GROUNDS OF APPEAL TAKEN BY THE ASSES SEE ARE DISMISSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMIS SED. 13. IN ITA NO. 160/JP/2017 FOR THE A.Y. 2012-13, TH E ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING ADDITION OF RS. 16,50,000/- MADE BY LD. AO U/S 40A(3) OF THE INCOME TAX ACT, AR BITRARILY THEREFORE, THE ADDITION SO MADE DESERVED TO BE DELE TED. 1.1 THAT THE LD. CIT(A) HAS FURTHER ERRED IN CONFIR MING THE ADDITION MADE BY LD. AO IGNORING THE SUBMISSION OF THE ASSESSEE THAT NONE OF THE PAYMENT WAS MADE IN THE CONTRAVENT ION OF SECTION 40A(3) AND FURTHER ASSESSEE WAS COMPELLED T O MADE CASH PAYMENTS ON ACCOUNT OF PECULIAR SITUATIONS IN INSIS TENCE UPON BY THE SELLERS, THUS APPELLANT PRAYS ADDITION SO MADE MAY PLEASE BE DELETED. ITA NO. 158 TO 160/JP/2017 SHRI NEERAJ SUWALKA VS. DCIT 9 14. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSE SSEE HAD PURCHASED LAND FROM HIS WIFE FOR RS. 16.50 LACS AND SINCE PAY MENT WAS MADE IN CASH, THE AO HAD MADE DISALLOWANCE U/S 40A(3) OF TH E ACT WHICH WAS CONFIRMED BY THE LD. CIT(A) AGAINST WHICH THE ASSES SEE IS IN APPEAL BEFORE US. 15. THE LD. AR SUBMITTED THAT UNDOUBTEDLY, PROVISIO NS OF SECTION 40A(3) CALL FOR A DISALLOWANCE WHENEVER THERE IS AN Y CASH PAYMENT EXCEEDING RS. 20,000/- IS MADE IN RESPECT OF ANY EX PENSE OTHERWISE ALLOWABLE WHILE COMPUTING BUSINESS INCOME. HOWEVER, EACH AND EVERY PROVISION IN THE ACT IS INSERTED WITH SOME PU RPOSE, WHICH IS DESCRIBED IN THE LEGISLATIVE INTENTION EXPLAINED WH ILE INTRODUCING THE SAME. THEREFORE, BEFORE MAKING ANY DISALLOWANCE, SU CH PURPOSE HAS TO BE KEPT IN MIND AND PROVISIONS OF THE ACT CANNOT BE APPLIED STRAIGHTWAY, AS IT MAY RESULT IN UNDUE HARDSHIP TO ASSESSEES. SIMILAR IS THE CASE OF SECTION 40A(3), THE INTENTION OF THE LEGISLATURE IN ENACTING SECTION 40A(3) PARTICULARLY WAS TO ENSURE THAT PAYMENTS EXCEEDING THE SUM SPECIFIED ARE MADE BY A CROSSED C HEQUE DRAWN ON A BANK OR BY A CROSSED BANK DRAFT SO THAT IT WILL B E EASIER TO ASCERTAIN, WHEN DEDUCTION IS CLAIMED, WHETHER THE P AYMENT WAS GENUINE AND WHETHER IT WAS MADE OUT OF INCOME FROM DISCLOSED SOURCES. IT IS PERTINENT TO NOTE HERE THAT IN THE I NSTANT CASE, THE AO NEITHER ESTABLISHED THAT THERE WAS ANY MALAFIDE INT ENTION OF THE ASSESSEE IN PAYING AMOUNT IN CASH NOR HE BROUGHT ON RECORD ANY MATERIAL TO PROVE THAT TRANSACTION WAS WITH THE INT ENTION TO EVADE TAX. IN THIS REGARD, ATTENTION WAS INVITED TO PROVISIONS OF SECTION 271D AND 271E, WHICH PROVIDE FOR PENALTY IN RESPECT OF VIOLA TION OF PROVISIONS OF ITA NO. 158 TO 160/JP/2017 SHRI NEERAJ SUWALKA VS. DCIT 10 SECTION 269SS AND 269T, WHICH RESTRICT ACCEPTANCE A S WELL AS REPAYMENT OF ANY LOAN EXCEEDING RS. 20,000/- IN CAS H. A NUMBER OF JUDICIAL PRONOUNCEMENTS HAVE BEEN PASSED IN FAVOUR OF ASSESSEE IN RESPECT OF THOSE PROVISIONS, A FEW OF WHICH ARE AS UNDER: ADDL. CIT VS. SMT. PRAHATI BARUAH (2003) 133 TAXMAN 74. DR. B.G. PANDA VS. DCIT 111 TAXMAN 86. CIT VS. SUNIL KUMAR GOEL (2009) 315 ITR 163. 16. IT WAS ACCORDINGLY SUBMITTED THAT IN THE PRESEN T CASE, IT IS UNDISPUTED FACT THAT THE PAYMENT WAS MADE TO THE WI FE OF THE ASSESSEE SMT. SUNITA SUWALKA IN WHOSE CASE ALSO SEA RCH WAS EXECUTED AND THE ASSESSMENT HAVE BEEN COMPLETED U/S 153A BY THE SAME ASSESSING OFFICER THUS NEITHER THERE WAS ANY Q UESTION OF NON DISCLOSURE OF TRANSACTION NOR THERE WAS ANY ATTEMPT BY THE ASSESSEE TO EVADE ANY TAX FROM THE TRANSACTION OF SALE TO TH E ASSESSEE. UNDER THESE CIRCUMSTANCES AS HAS BEEN HELD IN THE AFORESA ID DECISIONS, THE DISALLOWANCE MADE BY ASSESSEE IN RESPECT OF PAYMENT MADE TO WIFE IN CASH DESERVES TO BE DELETED. 17. PER CONTRA, THE LD CIT DR SUBMITTED THAT THE P AYMENT HAS BEEN MADE BY THE ASSESSEE TO HIS WIFE IN CASH AND WHAT W AS THE BUSINESS EXPEDIENCY TO MAKE THE PAYMENT IN CASH HAS NOT BEEN EXPLAINED BY THE ASSESSEE AND IN ANY CASE, THE MATTER DOESNT FA LL IN ANY THE EXCLUSIONS SO SPECIFIED IN RULE 8DD. HE ACCORDINGL Y SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. ITA NO. 158 TO 160/JP/2017 SHRI NEERAJ SUWALKA VS. DCIT 11 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSUE D THE MATERIAL AVAILABLE ON RECORD. THE HON'BLE SUPREME COURT IN C ASE OF ATTAR SINGH GURMUKH SINGH VS. ITO REFERRING TO THE INTENT BEHIN D INTRODUCTION OF PROVISIONS OF SECTION 40A(3) HAS HELD THAT: 'THE TERMS OF SECTION 40A(3) ARE NOT ABSOLUTE. CONS IDERATION OF BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS ARE NOT EXCLUDED. THE GENUINE AND BONA FIDE TRANSACTIONS AR E NOT TAKEN OUT OF THE SWEEP OF THE SECTION. IT IS OPEN TO THE ASSESSEE TO FURNISH TO THE SATISFACTION OF THE ASSESSING OFFICE R THE CIRCUMSTANCES UNDER WHICH THE PAYMENT IN THE MANNER PRESCRIBED IN SECTION 40A(3) WAS NOT PRACTICABLE OR WOULD HAVE CAUSED GENUINE DIFFICULTY TO THE PAYEE. IT IS ALSO OPEN TO THE ASSESSEE TO IDENTIFY THE PERSON WHO HAS RECEIVED TH E CASH PAYMENT. RULE 6DD PROVIDES THAT AN ASSESSEE CAN BE EXEMPTED FROM THE REQUIREMENT OF PAYMENT BY A CROSSED CHEQUE OR CROSSED BANK DRAFT IN THE CIRCUMSTANCES SPECIFIED U NDER THE RULE.' 19. IN THE INSTANT CASE, NO DOUBT THE PAYMENT HAS B EEN MADE BY THE ASSESSEE TO HIS WIFE AND THUS THE IDENTITY OF T HE PAYEE HAS BEEN ESTABLISHED AND GENUINENESS AND BONAFIDE OF THE TRA NSACTION ARE NOT DISPUTED. HOWEVER, THE ASSESSEE HAS FAILED TO FURNI SHED ANY REASONABLE EXPLANATION AS TO THE CIRCUMSTANCES UNDE R WHICH THE PAYMENT IN THE MANNER PRESCRIBED IN SECTION 40A(3) WAS NOT PRACTICABLE OR WOULD HAVE CAUSED GENUINE DIFFICULTY AND HARDSHIP MORE SO BEING A RELATED PARTY TRANSACTION BETWEEN H USBAND AND WIFE. THE TEST OF BUSINESS EXPEDIENCY HAS THUS NOT BEEN S ATISFIED IN THE INSTANT CASE AND THEREFORE, IN ABSENCE OF ANY SATIS FACTORY EXPLANATION, THE DISALLOWANCE SO MADE BY THE ASSESSING OFFICER I NVOKING PROVISIONS OF SECTION 40A(3) IS HEREBY UPHELD. ITA NO. 158 TO 160/JP/2017 SHRI NEERAJ SUWALKA VS. DCIT 12 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO. 158/JP/17 IS ALLOWED AND APPEAL IN ITA NO. 159/JP/17 AND 160/JP/ 17 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/12/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 12/12/2019. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI NEERAJ SUWALKA, KOTA. 2. IZR;FKHZ@ THE RESPONDENT- DCIT, CENTRAL CIRCLE-3, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 158 TO 160/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR