Subham Estcon Pvt. Ltd., Bhubaneswar V. JCIT, Range-2, Bhubaneswar

ITA 183/CTK/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5379 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 10-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: P K MISHRA
• Section: 40A(3)

Judgement Text

1 ITA NO. 183/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 183 /CTK/2016 ASSESSMENT YEAR : 2011 - 2012 SUBHAM ESTCON PVT LTD., HIG - B/128, BDA DUPLEX BARAMUNDA, BHUBANESWAR. VS. JCIT, RANGE - 2, BHUBANESWAR. PAN/GIR NO. AAHCS 4353 C (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI P.K.MISHRA, AR REV ENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 11 /10 / 2017 DATE OF PRONOUNCEMENT : 12 /10 / 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 3, BHUBANESWAR DATED 19.2.2016 FOR THE ASSESSMENT YEAR 2011 - 12. 2. IN GROUND NOS.1 & 2 OF THE APPEAL, THE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFI CER IN MAKING ADDITION OF RS.1,6 7,69,200/ - U/S.40A(3) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR, THE ASSESSEE HAS PURCHASED LAND MAKING PAYMENTS IN EXCESS OF RS.20,000/ - TO EACH SELLER AND THAT THE TOTAL OF SUCH PAYMENT IS RS.1,67,69,200/ - , WHICH IS IN 2 ITA NO. 183/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 VIOLATION OF SECTION 40A( 3) OF THE ACT AND, THEREFORE, T HE ASSESSING OFFICER ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 4. ON APPEAL BEFORE THE CIT(A), IT WAS ARGUED BY THE ASSESSEE THAT PAYMENTS WERE MADE IN CASH ARE REFLECTED IN CASH BOOK RECORDED IN THE BOOKS OF ACCOUNT AND ARE GENUINE AND ALSO THE IDENTI TY OF THE PAYEES ARE VERIFIABLE AND PAYMENTS HAVE BEEN MADE OUT OF BUSINESS EXPEDIENCY AND ARE PAID ON DATES ON WHICH BANKS WERE CLOSED ON ACCOUNT OF HOLIDAYS AND, THEREFORE, THE PAYMENTS ARE COVERED B Y EXCEPTIONS AS PER RULE 6DD(J) OF I.T.RULES. SINCE TH E FARMERS AND LAND OWNERS HAVE INSISTED ON CASH PAYMENTS, THE ASSESSEE HAD NO OPTION BUT TO MAKE PAYMENTS IN CASH. 5. THE CIT(A) WAS NOT CONVINCED WITH THE ARGUMENTS OF THE ASS ESSEE AND FOLLOWING THE ORDER OF THE CIT (A) IN THE CASE OF M/S. SHINE INFRA MARK ETING PVT LTD VS JCIT, IN ITA NO.0272/2015 - 16 DATED 19.1.2016, CONFIRMED THE ADDITION. 6. BEFORE US, LD A.R. OF THE ASSESSEE CONTENDED THAT THE PURCHASES MADE BY THE ASSESSEE FOR LAND AGAINST WHICH CASH PAYMENT OF RS.1,67,69,200/ - HAS BEEN MADE ARE FORMING PART OF THE STOCK IN TRADE OF THE ASSESSEE AND NO AMOUNT HAS BEEN DEBITED IN THE PROFIT AND LOSS ACCOUNT AND CLAIMED AS DEDUCTION. THEREFORE, NO DISALLOWANCE U/S.40A(3) IS WARRANTED. FOR THIS, HE PLACED RELI ANCE ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS MOTILAL KHATRI, 218 CTR 602 (RAJ), WHEREIN, IT WAS HELD THAT THE ASSESSEE HAS NOT CLAIMED ANY 3 ITA NO. 183/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 DEDUCTION OF ANY EXPENDITURE, AND THEREFORE, THERE IS NO QUESTION OF NOT ALLOWING ANY PART OF THAT EXPENDITURE, AS DEDUCTION. 7. FURTHER, HE RELIED ON THE DECISION OF VISAKHAPATNAM BENCH OF THE TRIBUNAL IN THE CASE OF CH HANUMANTHA RAO VS ITO, 164 ITD 659 (VISH), WHEREIN, IT WAS HELD THAT WHERE THE LAND WAS ACQ UIRED BY MAKING CASH PAYMENT, AND WAS HELD AS ST OCK IN TRADE OF THE BUSINESS, NO DISALLOWANCE U/S.40A(3) WAS WARRANTED. 8. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIAL S AVAILABLE ON RECORD. WE FIND THAT IN THE INSTANT CASE, THE ASSESSEE HAS MADE PURCHASES OF LAND AGGREGATING TO RS.6,75,57,700/ - DURING THE YEAR UNDER CONSIDERATION. ACCORDING TO THE ASSESSING OFFICER, OUT OF THE SAID PURCHASE, PAYMENT OF RS.1,67,69,200/ - HAS BEEN MADE IN CASH WHICH IS IN VIOLATION OF SECTION 40A(3) OF THE ACT AND HENCE, HE ADDED THE SAME TO THE INCOME OF THE ASSESSEE. WE FIND THAT THIS BENCH OF THE TRIBUNAL IN THE CASE OF SUBHASHREE ENTERPRISES VS ACIT IN ITA NO.378/CTK/2013 FOR THE A SSESSMENT YEAR 2009 - 2010 ORDER DATED 9.10.2017 IN SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE HAS DELETED THE DISALLOWANCE MADE U/S.40A(3) OF THE ACT ON THE GROUND THAT THE PAYMENTS MADE BY THE ASSESSEE HAVE NOT BEEN FOUND BY THE ASSESSING OFFICER AS NOT GENUINE. THE TRIBUNAL HAS HELD AS UNDER: 4 ITA NO. 183/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 11. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD . 12.. 13.. 14. 15.. 16. REGARDING DISALLOWANCE U/S.40A(3) OF THE ACT, WE FIND THAT THE AMRITSAR BENCH OF THE TRIBUNAL IN THE CASE OF RAKESH KUMAR VS ACIT IN ITA NO.102/ASR/2014 FOR THE ASSESSMENT YEAR 2010 - 2011 ORDER DATED 9.3.2016 HAS HELD AS UNDER: .7. AT THE OUTSET, THE LEARNED AR SUBMITTED THAT THE CASE OF THE ASSESSEE WAS COVERED IN FAVOUR OF ASSESSEE BY THE ORDER OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF GURDAS GARG VS. CIT, BATHINDA, 63 TAXMAN. 289 AND IN THIS RESPECT FILED A COPY OF THE ORDER. THE LEARNED AR SUBMITTED THAT THE HON'BLE PUNJAB & HARYAN HIGH COURT UNDER SIMILAR CIRCUMSTANCES HAS HELD THAT WHERE GENUINENESS OF TRANSACTIONS IN EXCESS OF RS.20,000/ - WAS NOT DISBELIEVED BY AUTHORITIES ASST. YEAR:2010 - 11 THEN THE PAYMENTS IN EXCESS OF RS.20,000/ - CANNOT BE DISALLOWED U/S 40A(3). 8. THE LEARNED DR, HOWEVER, SUPPORTED THE ORDER OF AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF GURDAS GARG VS. CIT (SUPRA), UNDER SIMILAR FACTS AND CIRCUMSTANCES HAS HELD THAT WHERE THE GENUINENESS OF PAYMENTS IS NOT DISBELIEVED THE DISALLOWANCE U/S 40A(3) CANNOT BE MADE. WE FIND FROM THE ORDER OF HON'BLE PUNJAB & HARYANA HIGH COURT THAT IN THIS CASE ALSO THE ASSESSEE WAS ENGAGED IN TRADING OF PROPERTIES AND HAD PAID CASH IN EXCESS OF RS.20,000/ - FOR PURCHASE OF PROPERTIES. THE HON'BLE PUNJAB & HARYANA HIGH COURT HAS EXHAU STIVELY DEALT WITH THE ISSUE AND HAS FRAMED QUESTION NO.1 AS BELOW. 'RE: QUESTION NO.1 3. THE APPELLANT IS ENGAGED INTER ALIA IN TRADING IN PROPERTIES IN HIS INDIVIDUAL NAME. AS NOTED IN THE ASSESSMENT ORDER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, TH E DETAILS OF THE CLOSING STOCK AS ON 31.03.2009 ALONGWITH DETAILS OF SALES/PURCHASES WERE PLACED ON RECORD. THE CONSIDERATION, WHICH IN RESPECT OF EACH OF THE TRANSACTIONS WAS ADMITTEDLY IN EXCESS OF RS.20,000/ - , WAS PAID IN CASH. PAYMENT BY DEMAND DRAFT W AS MADE ONLY IN RESPECT OF ONE OF 5 ITA NO. 183/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 THE TRANSACTIONS. THESE PAYMENTS IN CASH WERE DISALLOWED BY THE ASSESSING OFFICER AND THE ORDER IN THIS REGARD WAS UPHELD BY THE TRIBUNAL. THE CIT (APPEALS) HAD ALLOWED THE DEDUCTIONS.' THE HON'BLE PUNJAB & HARYANA HIGH CO URT IN THE ABOVE CASE HAS CONSIDERED THE SUPREME COURT DECISION IN THE CASE OF ATTAR SINGH GURMUKH SINGH V/S. ITO (SUPRA) AS RELIED UPON BY AUTHORITIES BELOW. THE FINDINGS OF THE COURT ARE CONTAINED IN PARA 7 TO 10. THE RELEVANT FINDINGS OF THE HON'BLE HIG H COURT ARE REPRODUCED BELOW. '7. THE RESPONDENT/ASSESSEE'S CASE IS SUPPORTED BY SEVERAL JUDGMENTS. THE RAJASTHAN HIGH COURT IN SMT. HARSHILA CHORDIA V. ITO [2008]298 ITR 349 HELD AS UNDER: '14. ABOUT T HIS CLAUSE, MANY DOUBTS WERE RAISED AND ENQUIRIES WERE DIRECTED TO THE BOARD AS TO WHAT SHALL CONSTITUTE EXCEPTIONAL AND UNAVOIDABLE CIRCUMSTANCES WITHIN THE MEANING OF CLAUSE (J). THAT LED TO ISSUANCE OF CIRCULAR BY THE BOARD ON MAY 31, 1977 ([1977] 108 1 TR (ST.) 8), WHICH IS PUBLISHED IN TAXMANN, VOL. 1, 1988 EDITION. SIGNIFICANTLY PARAGRAPH 4 OF THE AFORESAID CIRCULAR WAS VERY CLEARLY THAT ALL THE CIRCUMSTANCES IN WHICH THE CONDITIONS LAID DOWN IN RULE 6DD(J) COULD BE APPLICABLE CANNOT BE SPELT OUT. HOWE VER, SOME OF THEM WHICH WILL SEEM TO MEET THE REQUIREMENTS OF THE SAID RULE ARE AS FOLLOWS: (A) THE PURCHASER IS NEW TO THE SELLER; OR (B) THE TRANSACTIONS ARE MADE AT A PLACE WHETHER EITHER THE PURCHASER OR THE SELLER DOES NOT HAVE A BANK ACCOUNT; OR (C) THE TRANSACTIONS AND PAYMENTS ARE MADE ON A BANK HOLIDAY; OR (D) THE SELLER IS REFUSING TO ACCEPT THE PAYMENT BY WAY OF CROSSED CHEQUE/DRAFT AND THE PURCHASER'S BUSINESS INTEREST WOULD SUFFER DUE TO NON - AVAILABILITY OF GOODS OTHERWISE THAN FROM THIS PARTIC ULAR SELLER ; OR (E) THE SELLER, ACTING AS A COMMISSION AGENT, IS REQUIRED TO PAY CASH IN TURN TO PERSONS FROM WHOM HE HAS PURCHASE THE GOODS; OR 6 ITA NO. 183/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 (F) SPECIFIC DISCOUNT IS GIVEN BY THE SELLER FOR PAYMENT TO BE MADE BY WAY OF CASH. 15. IT WAS FURTHER CLARIFI ED IN PARAGRAPH 6 THAT THE ABOVE CIRCUMSTANCES ARE NOT EXHAUSTIVE BUT ILLUSTRATIVE. 16. THEREFORE, IN OUR OPINION, THE TRIBUNAL WAS CLEARLY IN ERROR IN NOT TRAVELLING BEYOND THE CIRCUMSTANCES REFERRED TO IN PARAGRAPH 4 OF THE CIRCULAR AND TO CONSIDER THE E XPLANATION SUBMITTED BY THE ASSESSEE ON ITS OWN MERIT. 17. SIGNIFICANTLY PARAGRAPH 5 REPRODUCED HEREIN BELOW GIVES A CLEAR INDICATION THAT RULE 6DD(I) HAS TO BE LIBERALLY CONSTRUED AND ORDINARILY WHERE THE GENUINENESS OF THE TRANSACTION AND THE PAYMENT AND IDENTITY OF THE RECEIVER IS ESTABLISHED, THE REQUIREMENT OF RULE 6DD(I) MUST BE DEEMED TO HAVE BEEN SATISFIED. PARAGRAPH 5 OF THE CIRCULAR READS AS UNDER [1977] 108 ITR (ST.) 8, 9: 5. IT CAN BE SAID THAT IT WOULD, GENERALLY, SATISFY THE REQUIREMENTS OF RU LE 6DD(J), IF A LETTER TO THE ABOVE EFFECT IS PRODUCED IN RESPECT OF EACH TRANSACTION FALLING WITHIN THE CATEGORIES LISTED ABOVE FROM THE SELLER GIVING FULL PARTICULARS OF HIS ADDRESS, SALES TAX NUMBER/PERMANENT ACCOUNT NUMBER, IF ANY, FOR THE PURPOSES OF PROPER IDENTIFICATION TO ENABLE THE INCOME - TAX OFFICER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE TRANSACTION. THE INCOME - TAX OFFICER WILL, HOWEVER, RECORD HIS SATISFACTION BEFORE ALLOWING THE BENEFIT OF RULE 6DD(J). 18. IT APPEARS THAT FULFILLMENT OF THE CONDITIONS OF PARAGRAPH 5 OF THE CIRCULAR HAS CLEARLY ESCAPED THE ATTENTION OF THE TRIBUNAL. THE CIRCULAR CLEARLY INDICATES THAT ORDINARILY WHERE THE INCOME - TAX OFFICER IS SATISFIED ABOUT THE GENUINENESS OF THE TRANSACTION AND PAYMENT AND IDENTIFICAT ION OF THE CASH PAYMENT IS ESTABLISHED, THE INCOME - TAX OFFICER SHALL RECORD HIS SATISFACTION ABOUT THE FULFILMENT OF THE CONDITIONS FOR ALLOWING THE BENEFIT OF RULE 6DD(J). APPARENTLY, SECTION 40A(3) WAS INTENDED TO PENALIZE THE TAX EVADER AND NOT THE HONEST TRANSACTIONS AND THAT IS WHY AFTER FRAMING OF RULE 6DD (J), THE BOARD STEPPED IN BY ISSUING THE AFORESAID CIRCULAR. 19. THIS CLARIFICATION, IN OUR OPINION, IS IN CONFORMITY WITH THE PRINCIPLE ENUNCIAT ED BY THE SUPREME COURT IN CTO V. SWASTIK ROADWAYS AS NOTICED ABOVE. 20. IN THIS CASE, THERE IS NO DISPUTE ABOUT THE GENUINENESS OF THE TRANSACTIONS AND THE PAYMENT AND IDENTITY OF THE RECEIVER ARE 7 ITA NO. 183/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 ESTABLISHED. THEREFORE, THE CASE CLEARLY FELL WITHIN THE P ARAMETERS OF PARAGRAPHS 4 AND 5 OF THE AFORESAID CIRCULAR READ TOGETHER.' 8. THE RESPONDENT'S CASE IS ALSO SUPPORTED BY THE JUDGMENT OF THE SUPREME COURT IN ATTAR SINGH GURMUKH SINGH V. ISO [1991] 191 1TR 667/59 TAXMAN 11. AFTER REFERRING TO RULE 6DD, THE SUPREME COURT HELD: - '7. IN OUR OPINION, THERE IS LITTLE MERIT IN THIS CONTENTION. SECTION 40 - A(3) MUST NOT BE READ IN ISOLATION OR TO THE EXCLUSION OF RULE 6 - DD. THE SECTION MUST BE READ ALONG WITH THE RULE. IF READ TOGETHER, IT WILL BE CLEAR THAT THE PROVISIONS ARE NOT INTENDED TO RESTRICT THE BUSINESS ACTIVITIES. THERE IS NO RESTRICTION ON THE ASSESSEE IN HIS TRADING ACTIVITIES. SECTION 40 - A (3) ON LY EMPOWERS THE ASSESSING OFFICER TO DISALLOW THE DEDUCTION CLAIMED AS EXPENDITURE IN RESPECT OF WHICH PAYMENT IS NOT MADE BY CROSSED CHEQUE OR CROSSED BANK DRAFT. THE PAYMENT BY CROSSED CHEQUE OR CROSSED BANK DRAFT IS INSISTED ON TO ENABLE THE ASSESSING A UTHORITY TO ASCERTAIN WHETHER THE PAYMENT WAS GENUINE OR WHETHER IT WAS OUT OF THE INCOME FROM DISCLOSED SOURCES. THE TERMS OF SECTION 40 - A(3) ARC NOT ABSOLUTE. CONSIDERATION OF BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS ARE NOT EXCLUDED. THE GENUINE AND BONA FIDE TRANSACTIONS ARE NOT TAKEN OUT OF THE SWEEP OF THE SECTION. IT IS OPEN TO THE ASSESSEE TO FURNISH TO THE SATISFACTION OF THE ASSESSING OFFICER THE CIRCUMSTANCES UNDER WHICH THE PAYMENT IN T HE MANNER PRESCRIBED IN SECTION 40 - A(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 THE CASH PAYMENT . RULE 6 - DD PROVIDES THAT AN ASSESSEE CAN BE EXEMPTED FROM THE REQUIREMENT OF PAYMENT BY A CROSSED CHEQUE OR CROSSED BANK DRAFT IN THE CIRCUMSTANCES SPECIFIED UNDER THE RULE. IT WILL BE CLEAR FROM THE PROVISIONS OF SECTION 40 - A(3) AND RULE 6 - DD THAT THEY ARC INTENDED TO REGULATE THE BUSINESS TRANSACTIONS AND TO PREVENT THE USE OF UNACCOUNTED MONEY OR REDUCE THE CHANCES TO USE BLACK MONEY FOR BUSINESS TRANSACTIONS. [SEE: MIIDIAM OIL COMPANY V. ITO [(1973) 92 ITR 519 (API] ]. IF THE PAYMENT IS MADE BY A CROSSED CHEQUE DRAWN ON A BANK OR A CROSSED BANK DRAFT THEN IT WILL BE EASIER TO ASCERTAIN, WHEN DEDUCTION IS CLAIMED, WHETHER THE PAYMENT WAS GENUINE AND WHETHER IT WAS OUT OF THE INCOME FROM DISCLOSED SOURCES. IN INTERPRETING A TAXING STATUTE THE COURT CANNOT BE OBLIVIOUS OF THE PROLIFERATION OF BLACK MONEY WHICH IS UNDER CIRCULATION IN OUR COUNTRY. ANY RESTRAINT INTENDED TO CURB THE CHANCES AND 8 ITA NO. 183/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 OPPORT UNITIES TO USE OR CREATE BLACK MONEY SHOULD NOT BE REGARDED AS CURTAILING THE FREEDOM OF TRADE OR BUSINESS.' 9. AT THE COST OF REPETITION, THE TRIBUNAL HAS NOT DISBELIEVED THE TRANSACTIONS OR THE GENUINENESS THEREOF. NOR HAS IT DISBELIEVED THE FACT OF PAYM ENTS HAVING BEEN MADE. MORE IMPORTANT, THE REASONS FURNISHED BY THE APPELLANT FOR HAVING MADE THE CASH PAYMENTS, WHICH WE HAVE ALREADY ADVERTED TO, HAVE NOT BEEN DISBELIEVED. IN OUR VIEW, ASSUMING THESE REASONS TO BE CORRECT, THEY CLEARLY MAKE OUT A CASE OF BUSINESS EXPEDIENCY. 10. IN THE CIRCUMSTANCES, THE ORDER OF THE TRIBUNAL IN THIS REGARD IS SET ASIDE. THE PAYMENTS CANNOT BE DISALLOWED UNDER SECTION 40A(3) OF THE ACT.' IN THE PRESENT CASE, THE GENU INENESS OF PAYMENT HAS NOT BEEN DOUBTED AS ASSESSING OFFICER HIMSELF HAS HELD THAT SALE DEEDS OF PROPERTIES WERE REGISTERED WITH THE REVENUE DEPARTMENT OF GOVT. THEREFORE, THE CASE OF THE ASSESSEE IS FULLY COVERED BY THE ABOVE DECISION OF HON'BLE PUNJAB AN D HARYANA HIGH COURT. THEREFORE, RESPECTFULLY FOLLOWING THE SAME WE ALLOW THE GROUND OF APPEAL FILED BY ASSESSEE. 17. IN THE INSTANT CASE ALSO, WE FIND THAT THE GENUINENESS OF PAYMENT HAS NOT BEEN DOUBTED BY THE ASSESSING OFFICER. THEREFORE, THE CASE OF THE ASSESSEE IS FULLY COVERED BY THE DECISION OF THE ABOVE QUOTED DECISION OF THE AMRITSAR BENCH OF THE TRIBUNAL AND ALSO THE DECISION OF P&H HIGH COURT IN THE CASE OF GURDAS GARG VS CIT, 63 TAXMAN. 289 (P&H). FOR THE ABOVE REASONS ALSO, NO DISALLOWANCE UNDER SECTION 40A(3) OF THE ACT CAN BE MADE OUT OF TRANSPORT CHARGES PAID BY THE ASSESSEE. HENCE, WE SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND ALLOW THIS PART OF THE GROUND OF APPEAL ALSO. 10. IN THE INSTANT CASE ALSO, THERE IS NO FINDING OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT THE PAYMENTS MADE ARE NOT GENUINE. FURTHER, IT IS NOT IN DISPUTE THAT THE SALE DEEDS FOR PURCHASE OF LAND WERE REGISTERED WITH THE REVENUE DEPARTMENT OF THE GOVERNMENT. THEREFORE, THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF SUBHASHREE ENTERPRISES (SUPRA) SQUARELY APPLIES TO THE FACTS OF THE ASSESSEES CASE. HENCE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DELETE THE 9 ITA NO. 183/CTK/2016 ASSESSMENT YEAR : 2011 - 2012 DISALLOWANCE OF RS.1,67,69,200/ - MADE U/S. 40A(3) OF THE ACT AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE. 11. GROUND NOS.3 & 4 ARE NOT PRESSED BY LD A.R. OF THE ASSESSEE, THEREFORE, SAME ARE DISMISSED AS NOT PRESSED. 1 2 . IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUN CED IN THE OPEN COURT ON 12 /10 /2017. SD/ - SD/ - ( PAVAN KUMAR GADALE) ( N.S SAINI) JUDICIALMEMBER A CCOUNTANT MEMBER CUTTACK; DATED 12 /10 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : SUBHAM ESTCON PVT LTD., HIG - B/128, BDA DUPLEX BARAMUNDA, BHUBANESWAR 2. THE RESPONDENT. JCIT, RANGE - 2, BHUBANESWAR. 3. THE CIT(A) - 3, BHUBANESWAR 4. PR.CIT - 3, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//