The ITO, Ward-3(4), Ahmedabad V. M/s. Amrut Rice & Pulse Mill, Ahmedabad

ITA 1938/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7991 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 30-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K DEV
• Assessee Lawyers: A C SHAH
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 1938/AHD/2015 & C.O. NO. 150/AHD/2015 (ASSESSMENT YEAR: 2007-08) INCOME TAX OFFICER, WARD- 7 (2)(1), AHMEDABAD M/S. AMRUT RICE & PULSE MILL 34 GIDC PHASE-I, NARODA, AHMEDABAD- 382330 V/S V/S M/S. AMRUT RICE & PULSE MILL 34 GIDC PHASE-I, NARODA, AHMEDABAD- 382330 INCOME TAX OFFICER, WARD- 7 (2)(1), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAHFA2532N APPELLANT BY : SHRI S. K. DEV, SR. D.R. RESPONDENT BY : SHRI A.C. SHAH, A.R. ( )/ ORDER DATE OF HEARING : 13 -12-201 7 DATE OF PRONOUNCEMENT : 18 -12-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 1938 & C.O. 150/AHD/2015 . A.Y. 2007-0 8 2 1. ITA NO. 1938/AHD/2015 & C.O. NO. 150/AHD/2015 ARE A PPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE DIRECTE D AGAINST THE ORDER OF THE LD. CIT(A)-7, AHMEDABAD DATED 20.04.2015 PERTAINING TO A.Y. 2007-08. 2. THE APPEAL AND THE CROSS OBJECTION WERE HEARD TOGET HER AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND B REVITY. 3. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD. C IT(A) ERRED IN DELETING THE ADDITION OF RS. 58,59,377/- MADE U/S. 40A(3) OF THE ACT. 4. DURING THE COURSE OF THE RE-ASSESSMENT PROCEEDINGS, THE A.O. FOUND THAT THE ASSESSEE HAS MADE VARIOUS PAYMENTS THROUGH CROSS CH EQUES TO THE SUPPLIERS FOR THE PURCHASE OF PADDY AND RICE. THE A.O. FOUND THAT THE SUPPLIERSHAS DISCOUNTED THE CHEQUES THROUGH MUDRA FINANCE. THE T OTAL PAYMENTS MADE THROUGH CROSS CHEQUES WERE OF RS. 66,43,872/-. THE A.O. WAS OF THE FIRM BELIEF THAT THE PAYMENTS HAVE BEEN MADE IN CONTRAVENTION T O THE PROVISIONS OF SECTION 40A(3) OF THE ACT AND ACCORDINGLY ASKED THE ASSESSEE TO EXPLAIN WHY THE SAME SHOULD NOT BE DISALLOWED. 5. IN ITS REPLY, THE ASSESSEE STATED THAT ALL THE PAYM ENTS HAVE BEEN MADE THROUGH CROSS CHQUES OF NUTAN NAGARIK CO.OP. BANK AND UNION CO.OP. BANK AND WERE ISSUED IN FAVOUR OF SUPPLIERS WHICH HAVE BEEN PAID FROM THE BANK ACCOUNT OF THE ASSESSEE. THEREFORE, THERE IS NOT VIOLATION OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT. 6. THE CONTENTION OF THE ASSESSEE DID NOT FIND ANY FAV OUR WITH THE A.O. WHO WAS OF THE OPINION THAT THE MANDATE OF SECTION 40A(3) I S VERY CLEAR IN WHICH IT HAS BEEN SPECIFICALLY MENTIONED THAT ANY EXPENDITURE EX CEEDING RS. 20,000/- ITA NO. 1938 & C.O. 150/AHD/2015 . A.Y. 2007-0 8 3 INCURRED IN RESPECT OF WHICH A PAYMENT MADE TO THE PERSON OTHERWISE THAN ACCOUNT PAYEE CHEQUE, THE EXPENSES ARE NOT DEDUCTAB LE. THE A.O. ACCORDINGLY MADE THE ADDITION OF RS. 66,43,872/-. 7. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT( A) AND REITERATED THAT THE PAYMENTS HAVE BEEN MADE THROUGH CROSS CHEQUES AND T HE AMENDMENT BROUGHT TO SECTION 40A(3) IS WITH EFFECT FROM 13.07.2006 WH EREAS THE IMPUGNED PAYMENTS HAVE BEEN MADE PRIOR TO 13.07.2006 AND THE REFORE, THE REQUIREMENT THAT THE PAYMENT SHOULD BE MADE BY ACCOUNT PAYEE CH EQUES IS NOT APPLICABLE ON THE IMPUGNED PAYMENTS. 8. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) FOUND THAT PAYMENT OF RS. 58,59,377/- WERE MADE BY CROSS CHEQU ES PRIOR TO 13.07.2006. THEREFORE, THERE IS NO VIOLATION TO THE PROVISIONS OF SECTION 40A(3) OF THE ACT FOR PAYMENT MADE BEFORE THAT DATE. HOWEVER, ON FIND ING THAT RS. 7,84,495/- WAS PAID AFTER 13.07.2006, THE LD. CIT(A) DISALLOWE D 20% AND SUSTAINED THE ADDITION OF RS. 1,56,899/-. 9. BEFORE US, THE LD. D.R. VEHEMENTLY STATED THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE TO DEMONSTRATE THAT PAYMENT OF RS. 58, 59,377/- WAS MADE PRIOR TO 13.07.2006. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES. 10. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTH ORITIES BELOW. IT IS TRUE THAT THE PROVISIONS OF SECTION 40A(3) HAS BEEN AMENDED W ITH EFFECT FROM 13.07.2006 BY WHICH CROSS CHEQUE WAS SUBSTITUTED BY ACCOUNT PAYEE CHEQUE. THE FIRST APPELLATE AUTHORITY HAS GIVEN A CATEGORICAL FINDING THAT RS. ITA NO. 1938 & C.O. 150/AHD/2015 . A.Y. 2007-0 8 4 58,59,377/- WAS PAID BEFORE 13.07.2006. ON SUCH CAT EGORICAL FINDING OF THE FACT, WE DO NOT FIND ANY REASON TO INTERFERE WITH T HE FINDINGS OF THE LD. CIT(A). ADDITION OF RS. 1,56,899/- HAS NOT BEEN CONTESTED B Y THE ASSESSEE AND THEREFORE HAS ATTAINED FINALITY. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. 12. THE LD. COUNSEL DID NOT PRESS THE CROSS OBJECTION O F THE ASSESSEE AND THE SAME IS DISMISSED AS NOT PRESSED. ORDER PRONOUNCED IN OPEN COURT ON 18 - 12- 20 17 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 18 /12/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD