Smt. M.J. Mumtaj, Erode V. ITO, Erode

ITA 1914/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73649 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-02-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Section: 40A(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ I.T.A. NO. 1913/MDS/2013 / ASSESSMENT YEAR : 2010-11 M.K. JAFER SADIQUE, C/O.MR. S.SRIDHAR, ADVOCATE , 112/1, PERIYAR STREET, ERODE 638 0001 [PAN: AEGPJ 1111 F] VS INCOME TAX OFFICER, WARD-II(1), ERODE ./ I.T.A. NO. 1914/MDS/2013 / ASSESSMENT YEAR : 2010-11 SMT. M.J.MUMTAJ, C/O.MR. S.SRIDHAR, ADVOCATE , 112/1, PERIYAR STREET, ERODE 638 0001 [PAN: ABLPH 8651 C] ( !% /APPELLANT) VS INCOME TAX OFFICER, WARD-II(1), ERODE ( &'!% /RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE / RESPONDENT BY : SHRI SHAJI P. JACOB , ADDL.CIT / DATE OF HEARING : 13-02-2014 /DATE OF PRONOUNCEMENT : 13-02-2014 #( / O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEALS ARE ARISING FROM TWO SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX(APPEALS)-I, COIMBATORE B OTH DATED ITA. NOS. 1913 & 1914/MDS/13 2 28-08-2013 IN RESPECT OF ASSESSMENT YEAR (AY) 2010- 11 IN APPEALS FILED BY TWO ASSESSEES. BOTH THE ASSESSEES ARE RELATED AND IN BOTH THE APPEALS, IDENTICAL ISSUE IS INVOLVE D. THEREFORE, THE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION. 2. SINCE FACTS IN BOTH THE CASES ARE ALSO IDENTICAL , THE FACTS ARE TAKEN FROM ITA NO.1913/2013. THE ASSESSEE IS IN TH E BUSINESS OF TRADING IN READY-MADE GARMENTS. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE AY.2010-11 ON 28-03-2011 ADMITTING H IS TOTAL INCOME AS ` 1,25,770/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE INCOME TAX A CT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) WAS ISSUED TO THE A SSESSEE ON 26-09-2011. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS MA DE CASH PAYMENT IN EXCESS OF ` 20,000/- IN A DAY TO CERTAIN PARTIES. THE ASSESSING OFFICER DIS-ALLOWED THE EXPENDITURE BY IN VOKING THE PROVISIONS OF SECTION 40A(3). IN ITA NO.1913/2013 ` 1,62,786/- AND IN ITA NO.1914/2013, ` 4,16,940/- HAS BEEN DIS-ALLOWED ON SAME GROUNDS. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESSE ES PREFERRED APPEALS BEFORE CIT(APPEALS) IN THEIR RESP ECTIVE CASES. ITA. NOS. 1913 & 1914/MDS/13 3 THE CIT(APPEALS) AFTER EXAMINING THE FACTS IN APPEA L AND THE PROVISIONS OF LAW, DISMISSED BOTH THE APPEALS. AGGRIEVED AGAINST THE ORDERS OF THE CIT(APPEALS), T HE ASSESSEES HAVE COME IN SECOND APPEAL BEFORE THE TRI BUNAL. 3. WE HAVE HEARD THE SUBMISSIONS MADE BY THE LD.COU NSEL FOR THE ASSESSEE AND HAVE ALSO PERUSED THE ORDERS OF TH E AUTHORITIES BELOW IN BOTH THE CASES. THE LD.COUNSEL HAS SUBMIT TED THAT THE PAYMENTS MADE BY THE ASSESSEES IN CASH TO THE SAME PARTIES ON THE SAME DAY RELATE TO DIFFERENT INVOICES. WE DO N OT FIND FORCE IN THE ARGUMENT OF THE LD.COUNSEL FOR THE ASSESSEE. T HE PROVISIONS OF SECTION 40A(3) OF THE INCOME TAX ACT ARE RE-PROD UCED HEREIN BELOW: EXPENSES OR PAYMENTS NOT DEDUCTIBLE IN CERTAIN CIRCUMSTANCES: 40A(3): WHERE THE ASSESSEE INCURS ANY EXPENDITURE IN RESPECT OF WHICH A PAYMENT OR AGGREGATE OF PAYMENTS MADE TO A PERSON IN A DAY, OTHERWISE THAN BY AN ACCOUNT BY CHEQUE DRAWN ON A BANK OR ACCOUNT PAYEE BANK DRAFT, EXCEED S ` 20,000/-, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF SUCH EXPENDITURE. THE ABOVE PROVISION UN-AMBIGUOUSLY STATES THAT WHER E PAYMENT OR AGGREGATE OF THE PAYMENTS FOR ANY EXPENDITURE IS MA DE TO A PERSON IN A DAY BY WAY OF CASH IN EXCESS OF ` 20,000/-, NO ITA. NOS. 1913 & 1914/MDS/13 4 DEDUCTION SHALL BE ALLOWED IN RESPECT OF SUCH EXPEN DITURE. THE SPLITTING UP OF INVOICES AND CORRESPONDING CASH PAY MENTS, THE AGGREGATE OF WHICH IS IN EXCESS OF ` 20,000/- TO THE SAME PERSON/PARTY IN A DAY SHALL ATTRACT THE PROVISIONS OF SECTION 40A(3). DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE HAS TRIED TO TAKE SHELTER OF RULE 6DD. HOWEVER, THE AS SESSEE COULD NOT PROVE THE IDENTITY OF THE AGENT TO WHOM ALLEGED CASH PAYMENTS WERE MADE. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND T HE PROVISIONS OF SECTION 40A(3), THERE IS NO MERIT IN THE APPEALS OF THE ASSESSEES. THE ORDER OF THE CIT(APPEALS) IS WELL R EASONED AND DETAILED, WE DO NOT FIND ANY REASON TO INTERFERE WI TH THE SAME. THE APPEALS OF THE ASSESSES ARE DISMISSED BEING DEVOID OF MERIT. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON THURSDAY, THE 13 TH FEBRUARY, 2014 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 13 TH FEBRUARY, 2014 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR