Eminence Corporation (P) Limited, Bhubaneswar V. ITO,Ward-2(3), Bhubaneswar

ITA 227/CTK/2019

AI Insights

Eminence Corporation Pvt Ltd. appealed against the order of the CIT(A), Bhubaneswar, which confirmed the AO's decision. The AO had made an addition to the assessee's income for disallowing a payment of Rs.9,38,438 made in cash to landowners, which was not justified under the exceptions provided in Rule 6DD of the Income Tax Rules, 1962. The Tribunal found that the villagers, being close to urban areas, had better facilities to deposit cash exceeding Rs.20,000, thus not meeting the exception criteria of Rule 6DD. The Tribunal also dismissed the assessee's arguments regarding the arbitrary nature of the AO's order and the 10% adhoc disallowance of office expenditure.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300452 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2020
• Appeal Filed By: Assessee
• Order Result: DismissedAllowed
• Bench Allotted: DB
• Next Hearing Date: 09-01-2023
• Assessment Year: 2005-2006
• Appeal Filed On: 10-07-2019
• Laws Referred To: I.T.Act, 1961, I.T.Rules, 1962
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE SHRI Eminence Corporation Pvt Ltd., C-7, Saheed nagar Market Building, Bhubaneswar. PAN/GIR No. (Appellant This is an appeal filed by the assessee against the order of the CIT(A),1, Bhubaneswar 2. The assessee has raised “1. That the order passed u/s.143(3)/147 of the I.T.Act, 1961 by the AO on 30.9.2011 is arbitrary, illegal and devoid of merit, being unjustified deserves to be quashed in limine. 2. That 10% adhoc disallowance of office ex Rs.4,09,424/ produced during the course of assessment proceedings. 3. That the addition of an amount of Rs.9,38, added towards disallowance of payment to land owners i deserves to be deleted on the ground that not only it is unjustified on IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK ‘SMC’ BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL ITA No.227/CTK/2019 Assessment Year : 2005-06 Corporation Pvt Ltd., 7, Saheed nagar Market Building, Bhubaneswar. Vs. JCIT (OSD), Corporate Circle 1(1), Bhubaneswar. No. (Appellant) .. ( Respondent Assessee by : Shri A.K.Roy , AR Revenue by : Shri Subhendu Dutta, DR Date of Hearing : 6 /08/ 20 Date of Pronouncement : 6 /0 O R D E R This is an appeal filed by the assessee against the order of the CIT(A),1, Bhubaneswar dated 15.3.2019 for the assessment year The assessee has raised the following grounds of appeal: “1. That the order passed u/s.143(3)/147 of the I.T.Act, 1961 by the AO on 30.9.2011 is arbitrary, illegal and devoid of merit, being unjustified deserves to be quashed in limine. 2. That 10% adhoc disallowance of office ex Rs.4,09,424/- is bad in law as the bills which were asked for was produced during the course of assessment proceedings. 3. That the addition of an amount of Rs.9,38,438 to the total income added towards disallowance of payment to land owners i deserves to be deleted on the ground that not only it is unjustified on Page 1 | 3 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH, CUTTACK JUDICIAL MEMBER JCIT (OSD), Corporate Circle- 1(1), Bhubaneswar. Respondent) , AR Subhendu Dutta, DR / 2020 08/2020 This is an appeal filed by the assessee against the order of the for the assessment year 2005-06 . the following grounds of appeal: “1. That the order passed u/s.143(3)/147 of the I.T.Act, 1961 by the AO on 30.9.2011 is arbitrary, illegal and devoid of merit, being 2. That 10% adhoc disallowance of office expenditure of is bad in law as the bills which were asked for was produced during the course of assessment proceedings. 438 to the total income added towards disallowance of payment to land owners in cash deserves to be deleted on the ground that not only it is unjustified on ITA No.227/CTK/2019 Assessment Year : 2005-06 Page 2 | 3 the facts and in the circumstances of the case but also, unwarranted as per the statutory provisions.” 3. The appeal is filed by the assessee late by 31 days. The assessee has filed condonation petition dated 3.7.2019 explaining the cause of delay that due to Cyclone Funny, the documents could not be given to the legal consultant for filing of appeal and hence, there was delay of 31 days. Ld D.R. did not object to condone the delay. Hence, the delay is condoned and appeal is admitted for adjudication. 4. Ld A.R. submitted that there was no banking facility in the villages where the sellers/villagers of the land were residing and thus, the transaction is getting exemption u/r 6DD of the I.T.Rules, 1962 and reiterated the written submissions. 5. Ld D.R. drew our attention to the findings recorded by the AO at pages 3 to 8 of reassessment order dated 30.9.2011 and also to paras 4.1 to 4.4.1 of first appellate order and submitted that the case does not fall under exception of Rule 6DD of the I.T.Rules, 1962 as the villagers are residing close to urban areas of Bhubaneswar. 6. On consideration of rival submissions, I have carefully gone through the orders of lower authorities and written submissions filed by the assessee. The contention of the ld A.R. is not found to be acceptable because the villagers who have sold the land are residing close to urban areas and have better facilities to deposit the cash exceeding Rs.20,000/-. ITA No.227/CTK/2019 Assessment Year : 2005-06 Page 3 | 3 Therefore, the assessee has violated the provisions of section 40A(3) of the Act while paying the amount, hence, the assessee is not covered by the exception to section 40A(3) as provided in Rule 6DD of the I.T.Rules. In view of above, I uphold the findings of the lower authorities in confirming the addition made by the AO. 7. In the result, appeal of the assessee is dismissed. Order pronounced on 6 /08/2020. Sd/- (Chandra Mohan Garg) JUDICIAL MEMBER Cuttack; Dated 6 /8/2020 B.K.Parida, SPS Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : Eminence Corporation Pvt Ltd., C-7, Saheed nagar Market Building, Bhubaneswar 2. The Respondent. JCIT (OSD), Corporate Circle- 1(1), Bhubaneswar 3. The CIT(A)-1, Bhubaneswar 4. Pr.CIT-1 , Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//