Shri. Santosh M. Bhandari, Dharwad V. Income Tax Officer, Ward- 2(1), Hubballi

ITA 1812/BANG/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0888 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 19-08-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GANESH R GHALE DEPT
• Assessee Lawyers: PREETI PATEL
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT IT A NO. 1812/BANG/2019 ASSESSMENT YEAR: 2013 - 14 SHRI SANTOSH M. BHANDARI, PROP. OSTWAL CLOTHING, OSTWAL TOWER, JUBILEE CIRCLE, DHARWAD. PAN: AHRPB 0819N VS. THE INCOME TAX OFFICER, WARD 2(1), NAVANAGAR, HUBBALLI. APPELLANT RESPONDENT APPELLANT BY : MS. PREETI PATEL, ADVOCATE RESPONDENT BY : SHRI GANESH R. GHALE, STANDING COUNSEL FOR DEPT. DATE OF HEARING : 11 .12 .2019 DA TE OF PRONOUNCEMENT : 20 .1 2 .2019 O R D E R THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 25.03.2019 OF THE CIT(APPEALS), HUBBALLI RELATING TO ASSESSMEN T YEAR 2013-14. 2. THE REGISTRY HAS SOUGHT TO RAISE AN OBJECTION THAT THE APPEAL HAS BEEN FILED BELATEDLY BY THE ASSESSEE BY TWO DAYS. THE ASSESSEE HAS HOWEVER FILED A CLARIFICATION STATING THAT THE APPE AL IS FILED IN TIME WHICH IS AS FOLLOWS:- DATE PARTICULARS 18 .06.20 19 - TUESDAY DATE OF THE RECEIPT OF THE ORDER OF THE HON'BLE FIRST APPELLATE AUTHORITY. 18.08.2019 - SUNDAY 60 DAYS TO FILE THE APPEAL BEFORE THE HON'BLE ITAT. 19.08.20 19 - MONDAY THE APPEAL WAS FILED BEFORE THE HON'BLE ITAT. ITA NO.1812 /BANG/2018 9 PAGE 2 OF 4 3. AS SEEN FROM THE ABOVE TABLE, THE LAST DAY TO FILE THE APPEAL WAS ON 18.08.2019 I.E., SUNDAY WHICH WAS A HOLIDAY. THEREFORE, THE APPEAL WAS FILED THE VERY NEXT DAY ON 19.08.201 9 I.E., MONDAY. IN THESE CIRCUMSTANCES WE REQUEST-THE HON 'BLE ITAT TO CONDONE THE DELAY, IF ANY, IN FILING THE APPEA L. THE APPEAL IS THEREFORE HELD TO BE FILED WITHIN TIM E. 3. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS O F APPEAL, AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE P RAYED FOR ADJUDICATION OF GROUND NOS. 2 & 3 IN THE GROUNDS OF APPEAL WHICH IN RELATION TO DISALLOWANCE OF 3,47,717 MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE INCOME TAX ACT, 1961 [THE ACT ]. 4. THE ASSESSEE IS AN INDIVIDUAL CARRYING ON BUSINE SS IN RETAIL CLOTH UNDER THE NAME, OSTWAL CLOTHING. IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE AY 2013-14, THE AO NOTICED THAT THE ASSESSEE HAD MADE CASH PAYMENTS TO CERTAIN PARTIES AND THOSE CAS H PAYMENTS WERE CLAIMED AS EXPENDITURE IN THE PROFIT & LOSS ACCOUNT . THE DETAILS OF CASH PAYMENTS MADE BY THE ASSESSEE WERE AS FOLLOWS:- SL. NO NAME OF PARTY DATE OF PAYMENT INV.NO AMOUNT 01 VIMAL PLASTICS 31.03.2013 2702 211363 02 RADHEY SHYAM HOSIERY 31.03.2013 1479,2704 90454 03 A2A CLOTHING CO PVT LTD 31.03.2013 889,2707 45900 TOTAL 347717 5. THE AO CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY THE AFORESAID PAYMENTS WHICH WERE MADE IN VIOLATION OF SECTION 40 A(3) BE DISALLOWED AND ADDED TO THE INCOME OF ASSESSEE. THE ASSESSEE EXPLAINED THAT THE TRANSACTIONS WERE GENUINE AND THAT THE PAYMENTS WER E MADE ON THE LAST DATE OF THE MONTH, WHICH HAPPENED TO BE A SUNDAY. SINCE THE PAYMENTS WERE MADE OWING TO BUSINESS EXIGENCY, THE SAME SHOU LD NOT BE DISALLOWED ITA NO.1812 /BANG/2018 9 PAGE 3 OF 4 U/S. 40A(3) OF THE ACT. THIS EXPLANATION WAS REJEC TED BY THE AO AS WELL AS CIT(APPEALS). ON THIS ASPECT, THE CIT(APPEALS) OBS ERVED AS FOLLOWS:- 4.1 IN THE SUBMISSIONS, THE ASSESSEE STATED THAT PAYMENT OF RS.3,47,717/- MADE IN CASH WAS ON SUNDAY WHEN BANKS WERE CLOSED ON ACCOUNT OF HOLIDAY. THE ASSESSEE HOWEVER FAILED TO SUBMIT REASON AS TO WHY PAYMENT HAD TO BE MADE ON S UNDAY, AND AS TO WHY CHEQUE PAYMENT COULD NOT BE MADE EVEN IF IT WAS A HOLIDAY. THUS, THE DISALLOWANCE MADE BY THE AO U/S . 40A(3) OF THE I.T. ACT, 1961, IS UPHELD. 6. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE ASSE SSEE IS IN APPEAL BEFORE THE TRIBUNAL. I HAVE HEARD THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE REITERA TED THE SUBMISSIONS MADE BEFORE THE REVENUE AUTHORITIES AND FURTHER PLA CED RELIANCE ON A DECISION OF HONBLE KERALA HIGH COURT IN ITA NO.83/ 2010 IN THE CASE OF M.K. AGROTECH P. LTD. V. ADDL.CIT DATED 29.11.2018. IN THE AFORESAID CASE, THE HONBLE KARNATAKA HIGH COURT WAS SEIZED OF A CA SE, WHERE PAYMENTS WERE MADE BY DDS. THE DDS WERE NOT CROSSED AND THE REFORE WAS NOT IN ACCORDANCE WITH THE MANDATE OF SECTION 40A(3) OF TH E ACT. THE HONBLE HIGH COURT TOOK THE VIEW THAT THE EXPLANATION OF AS SESSEE THAT DDS WERE NOT CROSSED BECAUSE THE SUPPLIERS WANTED QUICK REAL ISATION WAS AN ACCEPTABLE EXPLANATION AND THERE IS A VALID JUSTIFI CATION FOR NOT INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE ACT. IN MY VI EW THE AFORESAID DECISION OF THE HONBLE KARNATAKA HIGH COURT WILL NOT SUPPOR T THE PLEA OF ASSESSEE IN THE PRESENT CASE. THE ASSESSEE IN THE PRESENT C ASE EXCEPT MAKING A STATEMENT THAT CASH PAYMENTS WERE MADE ON THE LAST DAY OF THE MONTH AND CASH PAYMENTS WERE MADE KEEPING IN VIEW THE BUSINES S EXIGENCIES IS NOT SUPPORTED BY ANY EVIDENCE AS TO WHETHER THE LAST DA Y OF THE MONTH IS THE LAST DAY FOR PAYMENT AND THE ASSESSEE WOULD SUFFER ANY OTHER CONSEQUENCES IF THE PAYMENT IS NOT MADE BEYOND THE LAST DATE OF THE MONTH. IN THE GIVEN CIRCUMSTANCES, I AM OF THE VIE W THAT THE ASSESSEE HAS NOT MADE OUT ANY VALID JUSTIFICATION FOR NOT MAKING THE PAYMENTS OF SUMS OF ITA NO.1812 /BANG/2018 9 PAGE 4 OF 4 ABOVE RS.20,000 IN THE MANNER REQUIRED BY THE PROVI SIONS OF SECTION 40A(3) OF THE ACT. I THEREFORE DO NOT FIND ANY GRO UNDS TO INTERFERE WITH THE ORDER OF CIT(APPEALS). CONSEQUENTLY, THE RELEVANT GROUNDS OF APPEAL OF THE ASSESSEE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF DECEMBER, 2019. SD/- ( N V VASUDEVAN ) VICE PRESIDENT BANGALORE, DATED, THE 20 TH DECEMBER, 2019. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FIL E BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.