Venkateswara Blue Metals, Coimbatore V. DCIT, Ooty

ITA 1631/CHNY/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9806 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 02-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: M NARAYANAN RETD
• Section: 40A(3); 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI . . . , ! ' , # '$ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.1631/CHNY/2016 % &% /ASSESSMENT YEAR: 2013-14 M/S. VENKATESWARA BLUE METALS, 2, BUJANGA GOWDER COMPLEX, TEACHERS COLONY, KARAMADAI, COIMBATORE 641 104. VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-1, OOTY. [PAN: AACFV 7901P] ( '( /APPELLANT) ( )*'( /RESPONDENT) '( + , / APPELLANT BY : SHRI M. NARAYANAN, RETD. ADDL. CIT )*'( + , /RESPONDENT BY : SHRI R. CLEMENT RAMESH KUMAR, ADDL. CIT - + .# /DATE OF HEARING : 15.04.2019 /0& + .# / DATE OF PRONOUNCEMENT : 23.04.2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -3, COIMBATORE (HEREINAFTER CALLED AS CIT(A)) DATED 29.03.2016 F OR THE ASSESSMENT YEAR 2013-14. ITA NO.1631/CHNY/2016 :- 2 -: 2. THE APPELLANT RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANC ES OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 20,09,741/- BY W RONGLY APPLYING THE PROVISIONS OF SECTION 40A(3) OF THE ACT THE INC OME TAX ACT. 2. FOR THESE AND OTHER GROUNDS THAT MAY BE TAKEN AT THE TIME OF HEARING THE DISALLOWANCE UNDER SECTION 40A(3) MAY B E DELETED IN THE INTERESTS OF JUSTICE. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS A PARTNERSHIP FIRM. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 WAS FILED ON 14.09.2013. AG AINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY T HE DY. CIT, CIRCLE- 1, OOTACAMUND (HEREINAFTER CALLED AO) VIDE ORDER DATED 07.01.2016 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AT TOTAL INCOME OF RS. 92,10,170/-. WHILE DOING SO, THE AO MADE DISALLOWANCE OF RS. 20,09,741/- U/S. 40A(3) OF THE ACT ON THE GROUN D THAT THE APPELLANT MADE CASH PAYMENT EXCEEDING RS. 20,000/- IN A SINGL E DAY TOWARDS PURCHASE OF DIESEL. 4. BEING AGGRIEVED BY THE ABOVE ADDITION, AN APPEAL WAS PREFERRED BEFORE LD. CIT(A), WHO VIDE IMPUGNED ORDER CONFIRME D THE DISALLOWANCE FOLLOWING THE ORDER OF SPECIAL BENCH OF ITAT, KOLKA TA IN THE CASE OF ITO V. KENERAM SAHA & SUBHASH SAHA [2009] 116 ITD 01 (K OL). BEING AGGRIEVED, THE APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. ITA NO.1631/CHNY/2016 :- 3 -: 5. IT IS CONTENDED THAT THE PAYMENTS ARE MADE FOR T HE PURCHASE OF PETROL AND DIESEL, IT IS CONSIDERED TO BE ESSENTIAL COMMODITY AND THEREFORE, NO DISALLOWANCE SHOULD BE MADE. IT IS F URTHER CONTENDED THAT THE PARTIES TO WHOM THE CASH PAYMENTS WERE MADE ARE IDENTIFIED AND CONFIRMATION LETTERS HAVE BEEN FILED FROM THE PARTI ES STATING THAT THEY INSISTED ON THE CASH PAYMENTS AND THEREFORE, NO DIS ALLOWANCE IS REQUIRED TO BE MADE U/S. 40A(3) OF THE ACT. IT IS FURTHER C ONTENDED THAT EACH TRANSACTION IS SEPARATE AND THE VALUE OF EACH TRANS ACTION DOES NOT EXCEED RS. 20,000/- AND THEREFORE, THE PROVISION OF S. 40A(3) HAVE NO APPLICATION. ON THE OTHER HAND, THE LD. DEPARTMENTA L REPRESENTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 6. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. THE ONLY ISSUE INVOLVED IN THE PRESENT APP EAL REVOLVES AROUND APPLICABILITY OF PROVISIONS OF S. 40A(3) OF THE ACT . INDISPUTEDLY, THE CASH PAYMENTS EXCEEDING RS. 20,000/- IN A SINGLE DAY WAS MADE TOWARDS PURCHASE OF DIESEL. IT IS NOT THE CASE OF THE APPE LLANT THAT IT IS COVERED BY ANY OF EXCEPTIONS CARVED OUT UNDER THE PROVISIONS O F S. 40A(3) OF THE ACT. THE CIRCUMSTANCES ENVISAGED UNDER RULE 6DD OF THE I NCOME TAX RULES, 1962 SHOULD BE PLEADED AND PROVED BY LEADING THE NE CESSARY EVIDENCE ON RECORD. IN THE ABSENCE OF THESE PLEADINGS, THER E IS NO AMBIGUITY IN THE PROVISIONS OF S. 40A(3) AND THE PROVISIONS ARE SQUARELY APPLICABLE TO ITA NO.1631/CHNY/2016 :- 4 -: THE FACTS OF THE PRESENT CASE, HENCE WE UPHOLD THE ORDER OF LOWER AUTHORITIES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THE 23 RD DAY OF APRIL, 2019 IN CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ! ' ) (INTURI RAMA RAO) # /ACCOUNTANT MEMBER /CHENNAI, 1 /DATED: 23 RD APRIL, 2019. EDN, SR. P.S + ).23 43&. /COPY TO: 1. '( /APPELLANT 2. )*'( /RESPONDENT 3. - 5. ( )/CIT(A) 4. - 5. /CIT 5. 36 ). /DR 6. 7% 8 /GF