Sumathi Manivannan, Vellore V. ITO Ward 2, Vellore

ITA 2537/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5128 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-04-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 20-10-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Keywords: Commercial expediency
• Section: 40A(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC A BENCH, CHENNAI . . . , ! .#$#%, ' !( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ./ ITA NO.2537/CHNY/2017 % *% / ASSESSMENT YEAR : 2013-14 SMT. SUMATHI MANIVANNAN, C/O M/S SUBBARAYA AIYAR PADMANABHAN & RAMAMANI ADVOCATES, NEW NO.114 (OLD NO.248), ROYAPETTAH HIGH ROAD, ROYAPETTAH, CHENNAI - 600 014. PAN : AKIPM 7574 M V. THE INCOME TAX OFFICER, WARD II, NO.2, BARRACKS CROSS STREET, OFFICERS LINE, VELLORE 632 001. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SH. SAROJ KUMAR PARIDA, ADVOCATE ./,- 0 1 / RESPONDENT BY : SHRI B. SAGADEVAN, JCIT 2 0 3' / DATE OF HEARING : 21.06.2018 45* 0 3' / DATE OF PRONOUNCEMENT : 26.06.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -13, CHENN AI, DATED 11.07.2017 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2 I.T.A. NO.2537/CHNY/17 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 40A(3) OF TH E INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 3. SH. SAROJ KUMAR PARIDA, THE LD.COUNSEL FOR THE A SSESSEE, SUBMITTED THAT A SUM OF 14,68,120/- WAS DISALLOWED BY THE ASSESSING OFFICER UNDER SECTION 40A(3) OF THE ACT. ACCORDING TO THE LD. COUNSEL, THE CASH WAS NOT DELIVERED TO ANYONE P HYSICALLY. HOWEVER, IT WAS DEPOSITED IN THE BANK ACCOUNT OF TH E RESPECTIVE PERSON, THEREFORE, THE PROVISIONS OF SECTION 40A(3) OF THE ACT IS NOT APPLICABLE AT ALL. MOREOVER, ACCORDING TO THE LD. COUNSEL, THERE WAS AN URGENCY IN MAKING THE PAYMENT. THE ASSESSEE MAD E PURCHASES TO THE EXTENT OF 5,35,02,956/-, OUT OF WHICH CASH PAYMENT EXCEEDING 20,000/- WAS ONLY TO THE EXTENT OF 14,68,120/-. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE CIT(AP PEALS) IS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE MADE BY TH E ASSESSING OFFICER. 4. WE HEARD SHRI B. SAGADEVAN, THE LD. DEPARTMENTAL REPRESENTATIVE ALSO. THE FACT THAT THE ASSESSEE DE POSITED CASH IN THE ACCOUNT OF M/S PANDY CERAMICS IS NOT IN DISPUTE . THE ONLY QUESTION ARISES FOR CONSIDERATION IS WHEN THE ASSES SEE HAS 3 I.T.A. NO.2537/CHNY/17 DEPOSITED 14,68,120/- IN CASH IN THE ACCOUNT OF M/S PANDY CERAMICS, WHETHER IT WOULD AMOUNT TO PAYMENT OF CAS H UNDER SECTION 40A(3) OF THE ACT? THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT HANDING OVER THE CASH PHYSICALLY TO M/ S PANDY CERAMICS OR DEPOSITING THE SAME IN THE BANK ACCOUNT OF M/S PANDY CERAMICS IS ONE AND SAME. HENCE, THE PAYMENT OF 14,168,120/- TO THE CREDIT OF M/S PANDY CERAMICS IN THE BANK ACC OUNT AMOUNTS TO VIOLATION OF SECTION 40A(3) OF THE ACT. MOREOVER, MERELY BECAUSE THE ASSESSEE HAS PURCHASED TO THE EXTENT OF 5,35,02,956/-, IT CANNOT BE SAID THAT THERE WAS COMMERCIAL EXPEDIENCY OR URGENCY IN MAKING PAYMENT TO THE EXTENT OF 14,68,120/- IN CASH. IN VIEW OF THE ABOVE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SA ME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 26 TH JUNE, 2018 AT CHENNAI. SD/- SD/- ( ! .#$#% ) ( . . . ) (ABRAHAM P. GEORGE) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 26 TH JUNE, 2018. KRI. 4 I.T.A. NO.2537/CHNY/17 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-13, CHENNAI-34 4. PRINCIPAL CIT-8, CHENNAI-34 5. 9< .3 /DR 6. =% > /GF.