Assistant Commissioner of Income tax, V. M/s. Matsyodari Steel & Alloys Pvt.Ltd., Jalna

ITA 2569/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2996 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 11-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO. 2569/PUN/2016 / ASSESSMENT YEAR : 2012-13 THE ASSISTANT COMMISSIONER OF INCOME TAX, JALNA CIRCLE, JALNA. ....... / APPELLANT / V/S. M/S. MATSYODARI STEEL & ALLOYS PVT. LTD. D-32, ADDL. MIDC AREA, JALNA-431 203 PAN : AABCM9598D / RESPONDENT ASSESSEE BY : SHRI J.P. BAIRAGRA REVENUE BY : SHRI SANJAY PUNGLIA / DATE OF HEARING : 25.02.2019 / DATE OF PRONOUNCEMENT : 26.02.2019 / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE REVENUE EMANATES FROM THE ORDER OF LD. CIT(APPEALS)-1, AURANGABAD DATED 31.08.2016 FOR THE ASSES SMENT YEAR 2012- 13 AS PER FOLLOWING GROUNDS OF APPEAL ON RECORD: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A)-1, HAS ERRED IN RELYING THAT THE CASH PAYMENT HAS BEEN MADE FOR BUSINESS EXIGENCY, AS THIS NEED HAS NEVER BEEN QUESTIONED OR CRITICALLY EXAMINED BY THE CIT(A) AND HAS BEEN ACCEPTED ON ITS FACE VAL UE. IT IS THE RESPONSIBILITY OF THE TRANSPORT AGENCY AND NOT THE ASSESSEE TO TAKE CARE OF DRIVERS AND THE TRANSPORT AGENCY CAN ALWAYS GIVE THE BEARER CHEQUES OR CASH TO THE DRIVERS TO TAKE CARE OF THEIR NEEDS ON RETURN JOURNEY. 2 ITA NO. 2569/PUN/2016 A.Y.2012-13 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE GENUINENESS OF THE PAYMENT IS ALSO IN DOUBT IN VIEW OF THE SELF SE RVING VOUCHERS ONLY AND THUS THE ASSESSEE CANT SEEK RECOURSE TO EITHER OF THE TWO SITUATION LAID DOWN IN CLAUSE(J) OR THE RULE 6DD OF RULES. 3. THE ORDER OF THE AO BE RESTORED THAT THAT OF THE CIT(A) BE VACATED. 4.THE APPELLANT CRAVES LEAVE TO ADD, AMEND, OR ALTE R ANY OR WHOLE GROUNDS OF APPEAL. 2. THE CRUX OF THE GRIEVANCE OF THE REVENUE IS THE DELETIO N OF DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S.40A(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WITH REGARD TO AM OUNT OF RS.1,04,13,598/-. 3. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE C OMPANY IS ENGAGED IN THE MANUFACTURING OF M.S. BILLETS AND ITS BYPRODUCTS. IN THE YEAR UNDER REFERENCE, IT HAS PURCHASED SPONGE IRON (AN EXCISABLE COM MODITY) MAINLY FROM GONDIA, MADHYA PRADESH, SCRAP FROM GUJARAT AND OTHER ST ATES. THESE GOODS WERE TRANSPORTED THROUGH THE TRUCKS OF TRANSPORT AGE NCIES NAMELY M/S. BENGAL MAHARASHTRA ROADWAYS, G E ROAD, TATIBANDH, RAIPUR ; M/S. GURUKRUPA ROADWAYS, SHANTI CHAMBERS, OPP. GITA LODGE, BHA VNAGAR, DELHI; M/S. HARYANA ROADLINES, NANI KHODIYAR MANDIR, VARTEJ; M/S. V IJAY TRANSPORT CO., AJMER ROAD, JAIPUR; M/S. ASHOK TRANSPORT CO., MIDC, DHA TAV, DISTT. RAIGAD; M/S. SHIV SHAKTI ROAD TRANSPORT CORPORATION, AJMER BY-PASS ROAD, JAIPUR; M/S.GURUKRUPA TRANSPORT, NEAR MADHUBAN HOTEL, V ARTEJ, BHAVNAGAR; M/S. NARESH ROADWAYS, MANGULI , CUTTACK; M/S. PARADISE ROAD LINES, ANGUL, ORISSA; M/S. ADARSH ROADWAYS, SADGURU COMPLEX, NARI CHOKDI, BHAVNAGAR ETC. THESE TRANSPORT AGENCIES HAVE SUPPLIED TRUCKS TO T HE ASSESSEE FOR TRANSPORTATION OF ITS MATERIAL. AFTER UNLOADING OF MATERIAL AT PREMISES OF THE COMPANY AT JALNA, THE CONCERNED DRIVERS DEMANDED MONEY FROM THE ASSESSEE TO MEET THE DIESEL EXPENSES, FOOD EXPENSES, REPAIRS EXPEN SES ETC. ON THEIR 3 ITA NO. 2569/PUN/2016 A.Y.2012-13 RETURN JOURNEY. THE ASSESSEE COMPANY INSTEAD OF MAKING CASH PAYMENTS HAS PAID THE AMOUNTS TO THE SAID DRIVERS THROUGH BEARER CH EQUES. THE PAYMENT VOUCHERS IN RESPECT OF SUCH EXPENDITURES HAVE BEEN DUL Y MAINTAINED BY THE ASSESSEE COMPANY WHICH BEARS VEHICLE NUMBERS, NAMES OF D RIVERS; DATES AND AMOUNTS. THE SIGNATURES OF THE RECIPIENTS ARE ALSO AVAILA BLE ON THE SAID VOUCHERS. ON PERUSAL OF BANK STATEMENT OF COSMOS BANK, IT IS NOTICED THAT THE AMOUNTS ARE WITHDRAWN BY THE DRIVERS ONLY. THE CAS E OF ASSESSEE IS COVERED UNDER PROVISO TO SECTION 40A(3) WHICH STIPULATES ' IN SUCH CASES AND UNDER SUCH CIRCUMSTANCES AS MAY BE PRESCRIBED, HAVI NG REGARD TO THE NATURE AND EXTENT OF BANKING FACILITIES AVAILABLE, CONSIDERATIONS OF BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS' . IT IS NOT IN DISPUTE THAT BEARER CHEQUES WERE GIVEN TO THE DRIVERS WHO WERE AGE NTS OF THE TRANSPORT COMPANIES. SINCE THE DRIVERS DID NOT HAVE BANK ACCOUNTS AT JALNA THESE PAYMENTS WERE MADE THROUGH BEARER CHEQUES OUT OF BUS INESS EXPEDIENCY ONLY. 4. THE LD. ASSESSING OFFICER HAS DISCUSSED THE ISSUE IN PAR AS 4, 5 AND 6 OF THE ASSESSMENT ORDER AND HAVE INCORPORATED THE FACT T HAT THE ASSESSEE HAS SUPPLIED ALL THE DETAILS AS PER QUESTIONNAIRE ISSUED AND ALS O PRODUCED BOOKS OF ACCOUNTS, BILLS, VOUCHERS AND CONFIRMATION. THE ASSESSING O FFICER HELD THAT THE ASSESSEE HAD MADE PAYMENT TO THE TRANSPORTER BY BEARER CHEQUE TO THE TRUCK DRIVERS AND THE SAID PAYMENT IN EXCESS OF RS.35,000 /- ON SINGLE DAY TO THE SAME TRANSPORTER TOTALING TO RS.1,04,13,598/-. THE ASS ESSEE WAS ASKED TO EXPLAIN WHY THESE PAYMENTS SHOULD NOT BE DISALLOWED U/S.40 A(3) OF THE ACT. SINCE THE ASSESSEE DID NOT FURNISH ANY EXPLANATION, THEREFO RE, SAME WAS DISALLOWED. 4 ITA NO. 2569/PUN/2016 A.Y.2012-13 5. BEFORE THE LD. CIT(APPEALS), DETAILED WRITTEN SUBMISSION WAS SUBMITTED BY THE ASSESSEE. THE LD. CIT(APPEALS) AFTER CONSIDERING TH E ASSESSMENT ORDER, FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESSEE OB SERVED THAT THE GENUINENESS OF THESE PAYMENT HAS NOT BEEN DOUBTED BY THE ASSESSING OFFICER. THE PAYMENTS MADE TO THE DRIVERS IS COVERED BY THE PR OVISO TO SECTION 40A(3) OF THE ACT ON THE GROUND OF BUSINESS EXPEDIENCY BECAUSE THE PAYMENT IS MADE TO THE DRIVER WHO DOES NOT HAVE BANK ACCOUNT IN THE TOWN WHERE GOODS HAVE BEEN DELIVERED. THE HON'BLE APEX COURT IN THE CASE OF ATTAR SINGH GURUMUKH SINGH, 59 TAXMAN 11 HAS HELD THAT WHERE THE PAYMENT BY CROSSED CHEQUE OR CROSSED BANK DRAFT WAS INSISTED UPON BY THE PAYEE, THE ASSESSING OFFICER HAD TO ASCERTAIN WHETHER THE PAYMENT W AS GENUINE OR NOT AND WHETHER IT WAS OUT OF THE INCOME FROM DISCLOSED SOURC ES OR NOT. IT WAS HELD THAT THE TERMS OF SECTION 40A(3) WERE NOT ABSOLUTE. C ONSIDERATION OF BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTS WERE NOT E XCLUDED. THE GENUINENESS AND BONA FIDE TRANSACTIONS WERE TAKEN OUT O F THE SWEEP OF THE SECTION. IT WAS OPEN TO THE ASSESSEE TO FURNISH TO THE SATISFACTION OF THE ASSESSING OFFICER THE CIRCUMSTANCES UNDER WHICH THE PAYME NT IN THE MANNER PRESCRIBED IN SECTION 40A(3) WAS NOT PRACTICABLE OR WOULD HAVE CAUSED GENUINE DIFFICULTY TO THE PAYEE. IT WAS ALSO OPEN TO THE AS SESSEE TO IDENTIFY THE PERSON WHO HAD RECEIVED THE CASH PAYMENT. RULE 6DD PRO VIDED THAT THE ASSESSEE COULD BE EXEMPTED FROM THE REQUIREMENTS OF THE PAYMENT BY A CROSS CHEQUE OR CROSSED DRAFT IN THE CIRCUMSTANCES SPECIFIED UN DER THE RULE. IT WAS CLEAR FROM THE PROVISIONS OF SECTION 40A(3) AND RULE 6DD THA T THEY WERE INDEED PROVIDED TO REGULATE THE BUSINESS TRANSACTIONS AN D TO PREVENT THE USE OF UNACCOUNTED MONEY OR REDUCE CHANCES TO USE BLACK M ONEY FOR BUSINESS TRANSACTIONS. THEREFORE, THE PURPOSE OF SECTION 40A(3) WA S NOT TO PENALIZE THE ASSESSEE FOR MAKING CASH PAYMENTS EXCEEDING SPECIFIED AMO UNT. THE PURPOSE WAS ONLY PREVENTIVE AND TO CHECK EVASION OF TAX AND FLOW OF UNACCOUNTED 5 ITA NO. 2569/PUN/2016 A.Y.2012-13 MONEY OR TO CHECK TRANSACTIONS WHICH WERE NOT GENUINE AND MIGHT BE PUT AS CAMOUFLAGE TO EVADE TAX BY SHOWING FICTITIOUS OR FALSE TRANSACTIONS. IN THE PRESENT CASE, ALL THE BILLS, VOUCHERS AND BANK STA TEMENT WAS SUBMITTED SHOWING GENUINENESS OF THE PAYMENT TO DRIVERS OF THE TRANSPORTER COMPANY AND IT WAS THE DRIVERS WHO HAVE GONE TO THE B ANK FOR WITHDRAWING MONEY WHICH IS ALSO EVIDENT FROM BANK STATEMENT FURNISHE D BEFORE THE REVENUE AUTHORITY. THE LD. CIT(APPEALS), THEREAFTER, RELIED O N THE DECISION IN THE CASE OF M/S. DHANSHREE ISPAT, VISHAL CORNER, MIDC, AURANGABAD ROAD, JALNA IN APPEAL NO.ABD/CIT(A)/106/2011-12 DATED 24.01.2013 FOR ASSESSMENT YEAR 2009-10 AND HELD AS UNDER: 5 .1 THE ISSUE UNDER CONSIDERATION IS COVERED BY THE ORDER OF MY PREDECESSOR IN THE CASE OF M/S.DHANSHREE ISPAT, VIS HAL CORNER, MIDC, AURANGABAD ROAD, JALNA IN APPEAL NO.ABD/CIT(A)/106/ 2011-12 DATED 24.01.2013 FOR AY 2009-10. THE OBSERVATIONS O F THE CIT(A) IN PARA 6 TO 6.5 ARE REPRODUCED AS UNDER: '6. GROUND NO.1 IS IN RESPECT OF ADDITION OF RS.60, 73,403/- ON ACCOUNT OF DISALLOWANCE OF CASH PAYMENTS U/S.40A(3) OF THE ACT. ON PERUSAL OF THE ASSESSMENT ORDER AND ANNEXURE THE RETO, IT HAS BEEN NOTICED THAT THE APPELLANT HAS PURCHASED SPONG E IRON ETC. MATERIAL FROM VARIOUS PARTS OF THE COUNTRY AND HAS RECEIVED THE SAID GOODS FOR TRADING ON DELIVERY BY VARIOUS TRUCK S THROUGH THE TRUCK DRIVERS. THE SAID DELIVERY BY VARIOUS TRUCKS HAS BEEN ARRANGED BY VARIOUS TRANSPORT AGENCIES LOCATED IN T HE AREA OF SUPPLIERS. THE SAID DELIVERIES OF GOODS HAVE BEEN A RRANGED THROUGH VARIOUS TRANSPORT AGENCIES. ON RECEIPT OF DELIVERY OF GOODS FROM THE TRUCK DRIVERS, THE APPELLANT HAS PAID AMOUNTS TO TR UCK DRIVERS OF SPECIFIC TRUCK AND EACH PAYMENT IS NOT EXCEEDING RS .20,000/-. IT HAS ALSO BEEN NOTICED THAT THE PAYMENTS WERE MADE T O VARIOUS PERSONS I.E. TRUCK DRIVERS OF SPECIFIC TRUCKS ON TH E SAME DAY FOR THE DELIVERY OF GOODS ARRANGED BY THE SAME TRANSPORT AG ENCY. THE PAYMENT ON THE SAME DAY FOR THE DELIVERY OF GOODS TO TRUCK DRIVERS THOUGH DID NOT EXCEED RS.20,000/- EACH, THE PAYMENT MADE IN RESPECT OF DELIVERY OF GOODS ARRANGED BY A TRANSPORT AGENCY EX CEEDED RS.20,000/-. THE AO HAS, THEREFORE, HELD THAT PAYMENT TO THE TRA NSPORT AGENCY MADE THROUGH VARIOUS TRUCK DRIVERS FOR VARIOUS DELIVERIE S ON THE SAME DAY EXCEEDED RS.20,000/- AND HENCE THE SAME IS LIABLE F OR DISALLOWANCE U/S 40A(3) OF THE ACT. THE AO HAS ACCORDINGLY WORKED OU T THE SAID PAYMENTS ON THE SAME DAY TO EACH TRANSPORT AGENCY TOTALING T O RS.60,73,403/- AND HAS DISALLOWED THE SAME U/S 40A(3) OF THE ACT. 6.1 DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AS WELL AS DURING THE COURSE OF APPELLATE PROCEEDINGS, THE LD. AR OF THE APPELLANT HAS STATED THAT THERE EXISTED EXCEPTIONAL AND UNAVOIDAB LE CIRCUMSTANCES DUE TO WHICH CASH PAYMENTS HAVE BEEN MADE TO THE TRUCK OWNERS AND IN VIEW OF THE RATIO LAID DOWN BY HON'BLE SUPREME COUR T IN THE CASE OF ATTAR 6 ITA NO. 2569/PUN/2016 A.Y.2012-13 SINGH GURUMUKH SINGH VS. ITO (1991) 97 CTR 251 (SC) , THE DISALLOWANCE U/S 40A(3) IS NOT JUSTIFIED. THE CONTENTIONS OF THE APPELLANT ARE SUMMARIZED BY THE A.O. IN HIS REPORT DATED 05/11/20 12 AS UNDER- (I) EXPENDITURE INCURRED TOWARDS PAYMENT OF FREIGH T ON PURCHASE OF RAW MATERIAL; (II) RAW MATERIAL SUPPLIERS LOCATED MORE THAN 1500 KMS; (III) PAYMENTS OF FREIGHT MADE TO THE TRUCK OWNER O N BEHALF OF THE TRANSPORTERS AS PER THE NORMAL PRACTICE OF TRADE; (IV) VEHICLE AND THE TRANSPORTER IS ARRANGED BY THE SUPPLIERS OF GOODS AND ONLY FREIGHT PAID AT JALNA; (V) TRANSPORTERS OR THE TRUCK OWNERS ARE LOCATED AT A DISTANCE PLACE FROM JALNA AND NOT HAVE BANK ACCOUNT AT JALNA: (VI) ASSESSEE DOES NOT HAVE BANK ACCOUNT AT PLACE W HERE THE TRANSPORTER OR THE TRUCK OWNER EXISTS; (VII) THOUGH THE EXPENDITURE HAS BEEN PAID OTHERWIS E THAN BY ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE DRAFT, BUT PAYMENTS A RE GENUINE AND THERE IS IDENTITY OF PAYEE AS STAMPED, SIGNED PAYME NT VOUCHERS INDICATES THE NAME OF THE PAYEE AND ( VIII) THE ASSESSEE HAS ALSO PLACED A RELIANCE ON CE RTAIN DECISIONS RELATING TO BUSINESS EXPEDIENCY AND PAYMENT MADE AR E UNDER EXCEPTIONAL CIRCUMSTANCES IN RULE 6DD(J) OF THE INC OME-TAX RULES, 1962 WHICH INCLUDES DECISION IN THE CASE OF ATTAR S INGH GURMUKH SINGH VS. ITO (1991) 97 CTR(SC) 251. 'THE APPELLANT HAS FURTHER CLAIMED DURING THE ASSES SMENT AS WELL AS APPELLATE PROCEEDINGS THAT AS EACH PAYMENT TO EA CH TRUCK OWNER ON THE SAME DAY DID NOT EXCEED RS.20,000/- AND HENC E THE DISALLOWANCE IS NOT JUSTIFIED. THE APPELLANT HAS FI LED WRITTEN SUBMISSION ON 26/12/2012. 6.2 IN THE ASSESSMENT ORDER AS WELL AS IN THE REPOR T DATED 05/11/2012, THE AO HAS REJECTED ALL THE ABOVE CONTE NTIONS RAISED BY THE APPELLANT STATING THAT THE CASH PAYMENTS AMO UNTING TO RS.60,73,403/- ARE DISALLOWABLE U/S 40A(3) AS PER T HE PROVISIONS OF THE ACT; THE SAID PAYMENTS ARE ALSO NOT COVERED BY ANY OF THE EXCEPTIONS MENTIONED IN RULE-6DD OF I.T. RULES, 196 2; THE DECISION RELIED ON BY THE APPELLANT IS DISTINGUISHABLE ON FA CTS AND IS NOT APPLICABLE TO THE CASE OF THE APPELLANT; THE APPELL ANT HAS NOT ESTABLISHED ANY EXCEPTIONAL CIRCUMSTANCES FOR MAKIN G CASH PAYMENT AND HENCE THE DISALLOWANCE U/S 40A(3) IS JU STIFIED AS HELD IN VARIOUS DECISIONS. 6.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE AND RIVAL CONTENTIONS. IN ORDER THE DECIDE THE ISSUE UNDER AP PEAL, THE PROVISIONS OF SECTION 40A(3) ARE RELEVANT AND THE S AME READS AS UNDER 'WHERE THE ASSESSEE INCURS ANY EXPENDITURE IN RESPE CT OF WHICH A PAYMENT OR AGGREGATE OF PAYMENTS MADE TO A PERSON I N A DAY, OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE OR DRAWN ON A BANK OR ACCOUNT PAYEE BANK DRAFT, EXCEEDS TWENTY THOUSAND R UPEES, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF SUCH EXPEN DITURE.' THE ONLY CRUX OF THE ISSUE TO BE DECIDED IS WHETHER A PERSON 7 ITA NO. 2569/PUN/2016 A.Y.2012-13 MENTIONED IN THE ABOVE PROVISION IS TO BE CONSIDERE D AS EACH INDIVIDUAL TRUCK DRIVER SEPARATELY OR A TRANSPORT A GENCY WHO HAS ARRANGED DELIVERY THROUGH VARIOUS TRUCKS. IN ORDER TO DECIDE THE ABOVE ISSUE, THE INTENTION OF THE LEGISLATURE, THE PURPOSE FOR WHICH THE SECTION HAS BEEN INTRODUCED AND ALSO THE PECULI AR FACTS OF THE CASE ARE TO BE CONSIDERED. THE SECTION HAS BEEN INT RODUCED TO CURB THE TENDENCY OF THE ASSESSEES TO MAKE CASH PAYMENTS WITHOUT RECORDING THE SAME IN THE BOOKS OF ACCOUNTS WHICH E NCOURAGES THE GENERATION OF BLACK MONEY AND ALSO GIVES RISE TO TA X AVOIDANCE. IN THE CASE UNDER APPEAL, THE APPELLANT HAS RECORDED A LL THE CASH PAYMENTS IN HIS BOOKS AND THE DETAILS OF PAYMENT MA DE TO VARIOUS TRANSPORTERS ARE ALSO AVAILABLE ON RECORD AND ON TH E SAID PAYMENTS, TDS HAS BEEN DEDUCTED AND HENCE THERE IS NO LIKELY HOOD OF NON- RECORDING OF ENTRIES IN THE BOOKS OF ACCOUNTS AND G ENERATION OF BLACK MONEY. SECONDLY, THE SUPPLIERS HAVE ARRANGED THE DE LIVERY OF GOODS THROUGH TRANSPORT AGENCIES WHICH ARE LOCATED AT FAR AWAY PLACES AND AS PER THE TRADE PRACTICE, THE APPELLANT HAS TO MAKE CASH PAYMENT ON RECEIPT OF DELIVERY OF GOODS TO THE TRUC K DRIVERS. THEREFORE, IT CANNOT BE SAID THAT THE PAYMENT MADE BY THE APPELLANT IN CASH NOT EXCEEDING RS.20,000/- TO EACH TRUCK DRI VER ON RECEIPT OF DELIVERY OF GOODS HAS RESULTED INTO GENERATION OF B LACK MONEY OR HAS ENCOURAGED AVOIDANCE OF INCOME TAX. 6.4 THE TERM 'PERSON' MENTIONED IN SECTION 40A(3) R EFERS TO AN INDIVIDUAL (TRUCK DRIVER IN THE CASE UNDER APPEAL) TO WHOM THE PAYMENT HAS BEEN MADE AND NOT EACH ASSESSEE ASSESSE D UNDER DIFFERENT CATEGORY SUCH AS PARTNERSHIP FIRM, COMPAN Y, AOP ETC. THE TERM 'PERSON' HAS BEEN DEFINED IN THE INCOME TAX AC T WITH REFERENCE TO THE STATUS OF THE ASSESSEE WHICH IS NOT RELEVANT FOR DECIDING THE TERM 'PERSON' REFERRED TO IN SECTION 40A(3) OF THE ACT. FOR EXAMPLE IF AN ASSESSEE WHO IS A COMPANY OR PARTNERSHIP FIRM HA S OPENED VARIOUS BRANCHES AT DIFFERENT PLACES AND IF GOODS A RE PURCHASED FROM EACH BRANCH ON THE SAME DAY BY AN ASSESSEE THR OUGH HIS DIFFERENT EMPLOYEES BY MAKING CASH PAYMENTS IN EACH BRANCH NOT EXCEEDING RS.20,000/- THEN IT WILL BE UNREASONABLE TO DISALLOW THE SAID PAYMENT U/S.40A(3) ON THE GROUND THAT ON THE SAME DAY THE PAYMENTS EXCEEDS RS.20,000/- HAVE BEEN MADE TO THE SAME ASSESSEE OWNING DIFFERENCE BRANCHES AT DIFFERENT PL ACES EXCEEDING RS.20,000/-. 6.5 IN VIEW OF THE ABOVE FACTS AND DISCUSSION, I AM OF THE CONSIDERED VIEW THAT THE APPELLANT HAS MADE PAYMENT TO DIFFERE NT PERSONS I.E. TRUCK DRIVERS FOR EACH DELIVERY NOT EXCEEDING RS.20 ,000/- AT A TIME ON A SINGLE DAY AND HENCE THE DISALLOWANCE U/S.40A( 3) IS NOT JUSTIFIED. THE ADDITION OF RS.60,73,403/- IS, THEREFORE, DELETED. THE AO IS DIRECTED ACCORDINGLY. GROUND NO.1 STANDS ALLO WED'. 6. AT THE TIME OF HEARING, THE LD. AR APPRAISED THE BENCH THAT THE LD. CIT(APPEALS) HAS PROVIDED RELIEF TO THE ASSESSEE SINCE THE HON'BLE APEX COURT JUDGMENT IN THE CASE OF ATTAR SINGH GURUMUKH SINGH (SUPR A.) WHILE ANALYSING SECTION 40A(3) R.W.R 6DD, IT WAS OPINED BY THE HO N'BLE APEX COURT THAT THE PURPOSE OF THE PROVISIONS WAS TO PREVENT THE USE OF UNACCOUNTED 8 ITA NO. 2569/PUN/2016 A.Y.2012-13 MONEY. HOWEVER, IT IS NEVER TO PENALIZE THE ASSESSEE WHO IS DOING GENUINE TRANSACTION AND IN SUPPORT OF HIS BUSINESS EXPEDIENCY, HAS MADE PAYMENT TO THE CONCERNED PARTIES. THAT THE VARIOUS DETAILS FILED ON R ECORD I.E. BANK STATEMENT, BILLS AND VOUCHERS SHOWS THE GENUINENESS OF TH E TRANSACTIONS MADE BY THE ASSESSEE AND THE PAYMENTS WERE ACTUALLY MADE THROUGH BEARER CHEQUE TO THE DRIVERS OF THE TRANSPORTER COMPANY. THIS FACT HAS NOT BEEN EVEN DOUBTED BY THE ASSESSING OFFICER. FURTHERMORE, THE LD. CIT (APPEALS) HAS RELIED ON THE DECISION IN THE CASE OF M/S. DHANSHREE ISPA T (SUPRA.) WHICH HAS BEEN UPHELD BY THE CO-ORDINATE BENCH OF THE TRIBUNAL, PUN E IN THE CASE OF ITO VS. DHANSHREE ISPAT IN ITA NO.794/PUN/2013 FOR THE ASSESSMENT YEAR 2009-10 AND THE SAID DECISION WAS GIVEN IN FAVOUR OF THE A SSESSEE. IT WAS OBSERVED BY THE TRIBUNAL THAT WHERE THE CASH PAYMENT S ARE MADE UNDER BONA-FIDE CONDITIONS AND NO DOUBT IS RAISED OVER GENUINEN ESS OF THE PAYMENTS AND THE PAYEES ARE IDENTIFIABLE, NO DISALLOWANCE U/ S.40A(3) IS WARRANTED. 7. PER CONTRA, LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER. 8. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIV AL CONTENTIONS AND GIVEN CONSIDERABLE THOUGHT TO THE FINDINGS OF THE LD. CIT(AP PEALS). IT IS FOUND THAT ON THE ANALYSIS OF FACTS AND CIRCUMSTANCES ON RECO RD, THERE IS NO DOUBT RAISED BY THE REVENUE REGARDING GENUINENESS OF THE PAYM ENT MADE BY THE ASSESSEE TO THE VARIOUS PAYEES, IN THIS CASE DRIVERS OF T HE TRANSPORTER COMPANY. THESE PAYMENTS WERE MADE VIDE BEARER CHEQUES AND ALL THE RELEVANT DOCUMENTS FILED BEFORE US IN THE FORM OF PAPER BOO K SUCH AS LEDGER ACCOUNT, BILLS, VOUCHERS AND STATEMENT OF ACCOUNT GOES ON TO PROVE THAT PAYMENTS MADE WERE GENUINE AND PAYEES DID NOT HAVE BA NK ACCOUNT AT THE PLACE WHERE PAYMENTS WERE MADE I.E. JALNA. ONCE THEY HAVE BEEN ISSUED BEARER CHEQUE, THEY HAD THEMSELVES WITHDRAWN MONEY FROM THE BANK WHICH 9 ITA NO. 2569/PUN/2016 A.Y.2012-13 IS ALSO REFLECTED IN THE BANK STATEMENTS FILED BY THE ASSES SEE BEFORE US. THAT FURTHER, LD. CIT(APPEALS) HAS BASED HIS REASONING ON THE D ECISION OF M/S. DHANSHREE ISPAT (SUPRA.) WHICH HAS BEEN UPHELD IN FAVOUR O F THE ASSESSEE BY THE CO-ORDINATE BENCH OF THE TRIBUNAL, PUNE. THEREIN, IT HAS BEEN OBSERVED THAT WHERE THE CASH PAYMENTS ARE MADE UNDER BONA-FIDE CONDITIONS AND NO DOUBT IS RAISED OVER GENUINENESS OF THE PAYMENTS AND TH E PAYEES ARE IDENTIFIABLE, NO DISALLOWANCE U/S.40A(3) IS WARRANTED. THAT LOOKING INTO TOTALITY OF THE LEGAL SCENARIO ON THE IS SUE, WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE LD. CIT(APPEALS) AND RELIE F PROVIDED TO THE ASSESSEE IS, THEREBY, SUSTAINED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 26 TH DAY OF FEBRUARY, 2019. SD/- SD/- ANIL CHATURVEDI PA RTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 26 TH FEBRUARY, 2019. SB !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEAL)-1, AURANGABAD. 4. THE PR. CIT-1, AURANGABAD. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 10 ITA NO. 2569/PUN/2016 A.Y.2012-13 DATE 1 DRAFT DICTATED ON 25 .0 2 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 25 .0 2 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER