TOSHIKA REAL ESTATE PVT.LTD., Jaipur V. ITO, Jaipur

ITA 26/JPR/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1902 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 08-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S NEHRA CIT DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Non-deduction of tax
• Section: 40A(3); 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 26/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12. TOSHIKA REAL ESTATE PVT. LTD. D-135, AMBA BARUM JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 4(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACCT 6737 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR(ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI A.S. NEHRA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 27.10.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 10/11/2017. VKNS'K@ VKNS'K@ VKNS'K@ VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS FILED AGAINST THE O RDER OF LD. CIT (A)-2, JAIPUR DATED 15.12.2014 PERTAINING TO ASSESSMENT YEAR 2011 -12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THAT THE LD. CIT(A)-II, JAIPUR ERRED IN LAW AS WELL AS FACTS AND CIRCUMSTANCES OF THE CASE BY SUSTAINING ADDITION OF RS. 15,67,406/- MADE BY THE ASSESSING OFFICER U/S 40(A)(IA) FOR INT EREST PAID WITHOUT DEDUCTING TDS TO NON BANKING FINANCE COMPANIES WITH OUT CONSIDERING THE FACT THAT THE ASSESSEE HAS MADE PAYMENT OF THOS E AMOUNT THROUGH MONTHLY EMI AND THUS THE SAME IS LIABLE TO BE DELET ED. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS -II), JAIPUR ERRED IN LAW AS WELL AS FACTS AND CIRCUMSTANCES OF THE CASE BY SUSTAINING ADDITION OF RS. 1,71,000/- U/S 40A(3) FOR CASH PAYM ENT MADE AGAINST PURCHASES OF PROPERTY WHICH DULY REGISTERED BEFORE SUB REGISTRAR WHICH IS LIABLE TO BE DELETED. 2 ITA NO. 26/JP/2015. TOSHIKA REAL ESTATE PVT. LTD., JAIPUR. 3. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL- II), JAIPUR ERRED IN LAW AS WELL AS FACTS AND CIRCUMSTANCES OF THE CASE SUSTAINING ADDITION OF RS. 3,55,000/- U/S 40A(3) FOR CASH PAYMENT MADE AGAINST PURCHASES OF PROPERTY WHICH DULY REGISTERED BEFORE SUB REGISTRAR WHICH IS LIABLE TO BE DELETED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL- II), JAIPUR ERRED IN LAW AS WELL AS FACTS AND CIRCUMSTANCES OF THE CASE SUSTAINING ADDITION OF RS. 27,50,000/- U/S 40A(3) FOR CASH PAYMENT MADE AGAINST PURCHASES OF PROPERTY WHICH DULY REGISTERED BEFORE SUB REGISTRAR WHICH IS LIABLE TO BE DELETED. 5. THAT THE APPELLANT HAS RESERVE THE RIGHT TO INC LUDE, AFTER AND AMEND ALL OR ANY OF THE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 14.02.2014. WHILE FRAMING THE ASSESSMENT, THE AO M ADE DISALLOWANCE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF RS. 15,67,40 6/- FOR NON-DEDUCTION OF TAX. FURTHER, THE ASSESSING OFFICER INVOKED THE PROVISIO N OF SECTION 40A(3) OF THE ACT TO MADE ADDITION OF RS. 1,71,000/-, 3,55,000/-, 27,50, 000/- RESPECTIVELY. AGGRIEVED BY THIS, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE L D. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS PARTLY ALLOWED THE APPEAL. WHILE PA RTLY ALLOWING THE APPEAL THE LD. CIT(A) REJECTED THE SUBMISSIONS OF THE ASSESSEE IN RESPECT OF THE INVOCATION OF PROVISION OF SECTION 40(A)(IA) OF THE ACT. FURTHER , THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY INVOKING THE PROVISION OF SECTION 40A(3) IN RESPECT OF THE ADDITION OF RS. 27,50,000/- OTHER ADDITIONS MADE WERE PARTLY SUSTAINED. AGGRIEVED BY THIS, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBU NAL. 3. GROUND NO. 1 IS AGAINST INVOKING THE PROVISION OF SECTION 40A(I A) OF THE ACT. 3 ITA NO. 26/JP/2015. TOSHIKA REAL ESTATE PVT. LTD., JAIPUR. 3.1 LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. LD. COUNSEL CONTENDED THAT TH E RECIPIENT I.E FINANCE COMPANIES HAVE DISCLOSED THE INCOME IN THEIR RESPECTIVE RETUR N. THEREFORE, HE SUBMITTED THAT THE ISSUE MAY BE RESTORED TO THE ASSESSING OFFICER FOR VERIFICATION. 3.2 ON THE CONTRARY, LD. D/R OPPOSED THE SUBMISSION S AND SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 3.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD. ONE OF THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE RECIPIENTS COMPANIES HAVE DECLARED THIS AMOUNT IN T HEIR RESPECTIVE RETURN. AFTER CONSIDERING THE TOTALITY OF THE FACT AND CASE LAWS RELIED BY THE LD. COUNSEL FOR THE ASSESSEE, WE THEREFORE, RESTORE THIS GROUND TO THE ASSESSING OFFICER FOR DECISION AFRESH. THE AO WOULD VERIFY WHETHER THE RECIPIENT S NON-BANKING FINANCE COMPANIES HAD DECLARED THE AMOUNT PAID BY THE ASSESSEE IN THE IR RESPECTIVE RETURN AS THEIR INCOME. THE ASSESSEE WOULD FURNISH THE REQUISITE C ERTIFICATE IN THIS BEHALF BEFORE THE AO. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED FO R STATISTICAL PURPOSE. 4. GROUND NOS. 2 TO 4 ARE AGAINST MAKING ADDITION BY INVOKING THE PROVIS ION OF SECTION 40A(3) OF THE ACT. 4.1 LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. THE WRITTEN SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED AS UNDER:- II. AS REGARDS GROUNDS OF APPEAL NOS. 2, 3,AND 4: DISALLOWANCE MADE U/S 40A(3) THE ASSESSING OFFICER MADE DISALLOWANCE U/S 40A(3), FOR THE FOLLOWING PAYMENTS MADE IN CASH BY THE APPELLANT: 4 ITA NO. 26/JP/2015. TOSHIKA REAL ESTATE PVT. LTD., JAIPUR. PURCHASE OF SHOPE NO. 17, 5,00,000/- VIDHYADHAR NAGAR, JAIPUR PURCHASE OF SHOPE NO. 44 VINAYAK TOWER, JAIPUR 4,81,000/- PURCHASE OF PLOT AT DOCTORS COLONY, AJMER RD, JAIPUR. 27,50,000/ TOTAL 37,31,000/- IN THE FIRST APPEAL, THE LEARNED CIT(A), PARTLY DEL ETED THE DISALLOWANCE, BY ACCEPTING THE PLEA OF THE APPELLANT, TO THE EXTENT THAT THE ABOVE FIGURES INCLUDED CERTAIN PAYMENTS WHICH WERE ACTUALLY MADE IN EARLIER YEARS, AND CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OF FICER , IN RESPECT OF ENTIRE PAYMENTS WHICH WERE MADE IN THE RELEVANT YEA R. THUS, THE DISALLOWANCES U/S 40A(3) CONFIRMED BY THE LEARNED C IT(A) STANDS AS UNDER:- CASH PAID FOR PURCHASE OF SHOP NO. 17 VIDHYADHAR NAGAR, JAIPUR 1,71,000/- CASH PAID FOR PURCHASE OF SHOP NO. 44 VINAYAK TOWER, JAIPUR 3,55,000/- CASH PAID FOR PURCHASE OF PLOT AT DOCTOR'S COLONY, AJMER RD, JAIPUR 27,50,000/- TOTAL 32,76,000/- THE FACTS AS REGARDS THE SHOPS PURCHASED BY THE APP ELLANT ARE IDENTICAL AND ARE THEREFORE DEALT TOGETHER AS UNDER: BOTH THE SHOPS AT VIDHYADHAR NAGAR AND VINAYAK TOWE RS WERE PURCHASED BY THE APPELLANT THROUGH POA HOLDERS OF THE ABOVE SHOP S. THE INITIAL PAYMENTS IN BOTH CASES WERE MADE THROUG H CHEQUES. THE POA HOLDERS OF BOTH THE SHOPS REFUSED TO ACCEPT FURTHER CHEQUES, AND AGREED TO REGISTER THE SALE DEEDS ONLY ON PAYMENT O F THE BALANCE AMOUNT IN CASH. 5 ITA NO. 26/JP/2015. TOSHIKA REAL ESTATE PVT. LTD., JAIPUR. THE VALIDITY OF BOTH THE POA WAS EXPIRING IN THE CU RRENT YEAR AND SINCE THE DEAL WAS FINALIZED WITH THE POA HOLDERS, IT WAS NEC ESSARY FOR THE APPELLANT TO GET THE SALE DEEDS REGISTERED BEFORE THE EXPIRY OF POA IN BOTH THE CASES. THUS, IT WAS IN THESE CIRCUMSTANCES THAT THE APPELL ANT HAD AGREED TO MAKE PAYMENTS IN CASH, AS CANCELLATION OF THE DEALS WOUL D HAVE HAMPERED THE BUSINESS OF THE APPELLANT. THE APPELLANT HAD SUBMITTED BOTH THE REGISTERED SAL E DEEDS BEFORE THE ASSESSING OFFICER AND THE LEARNED CIT(A) WHICH CLEA RLY MENTIONS THE RECEIPT OF BALANCE AMOUNT IN CASH BY THE POA HOLDERS. SINCE THE SALE DEEDS ARE REGISTERED WITH THE SUB-RE GISTRAR, THE IDENTITY OF THE SELLER IS ALSO ESTABLISHED, AND IS NOT IN DISPUTE. THE ABOVE FACTS ARE ALSO FULLY ACCEPTED BY THE LEAR NED CIT(A) AS STATED IN PARA 3.3 (II) PAGE 9 AND PARA 4.3 (II) PAGE 14 OF T HE APPELLATE ORDER. THE LEARNED CIT(A) DID NOT APPRECIATE THE PLEA OF T HE APPELLANT ON THE GROUNDS THAT, THE EXCEPTIONAL CIRCUMSTANCES PROVIDE D IN RULE 6DD, AND RELIED UPON BY THE ASSESSEE, AS APPLICABLE TO IT, IN FACT DOES NOT APPLY TO THE APPELLANT AS, ACCORDING TO THE LEARNED CIT(A), THE CIRCUMSTANCES OF THE APPELLANT FALLS UNDER THE PURVIEW OF RULE 6DD(J) AS IT STOOD PRIOR TO THE AMENDMENT ON 25.07.1995, AND NOT AS IT STOOD DURING THE RELEVANT YEAR. THE APPELLANT HUMBLY SUBMITS THAT, THE OBJECT OF S. 40A (3) IS NOT TO DISALLOW GENUINE PAYMENTS AND THE RULE 6DD HAS TO BE INTERPR ETED KEEPING IN VIEW THE OBJECT OF THE MAIN PROVISION. THE SECOND PROVIS ION TO S. 40A (3) REFERS TO 'THE NATURE AND EXTENT OF BANKING FACILITIES AVAILA BLE, CONSIDERATIONS OF BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS', WH ICH MEANS THAT THE OBJECT OF THE LEGISLATURE IS NOT TO MAKE DISALLOWANCE OF S UCH CASH PAYMENTS WHICH HAVE TO BE COMPULSORILY MADE BY THE ASSESSEE IN VIE W OF THE NATURE AND BUSINESS EXPEDIENCY. THERE IS NO DISPUTE REGARDING THE IDENTITY OF THE P AYEES AND THE GENUINENESS OF THE LAND TRANSACTIONS IN RESPECT OF WHICH PAYMEN TS HAVE BEEN MADE . IT IS NOTABLE THAT R. 6DD(K) PROVIDES AN EXCEPTION IN RESPECT OF CASH PAYMENT WHICH IS MADE ON A DAY ON WHICH THE BANKS WERE CLOS ED. THIS PROVES THAT THE 6 ITA NO. 26/JP/2015. TOSHIKA REAL ESTATE PVT. LTD., JAIPUR. OBJECT OF THE LEGISLATURE IS TO PROVIDE EXCEPTION I N RESPECT OF SUCH PAYMENT WHICH IS REQUIRED TO BE MADE IN CASH OR ABSENCE OF BANKING FACILITIES. RULE 6DD(J) MUST BE INTERPRETED KEEPING IN VIEW THIS OBJ ECT AND PURPOSE. THE ASSESSING OFFICER DID NOT DOUBT THE GENUINENESS OF THE TRANSACTION OR THE IDENTITY OF THE SELLERS. IF THE PAYMENTS ARE GENUIN E AND IF THE BUSINESS EXPEDIENCY SO REQUIRES AND THE ASSESSEE MAKES THE P AYMENTS IN CASH, THE TECHNICAL REQUIREMENT SHOULD NOT COME IN THE WAY OF CLAIMING IT AS EXPENDITURE IN VIEW OF THE PROVISO TO SECTION 40A(3 ). AS ALSO HELD BY THE HON'BLE ITAT, JAIPUR IN THE CASE OF ACE INDIA ABODE S LTD. ITA NO. 79/JP/2011, PROVISIONS OF SEC 40A(3) ARE NOT APPLICABLE TO COLO NIZERS. ALSO THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE O F HARSHITA CHORDIA; 298 ITR 349 HAS HELD THAT EXCEPTIONS CONTAINED IN RULE 6DD(J) ARE NOT EXHAUSTIVE AND THESE RULES SHOULD BE CONSTRUED LIBERALLY AND SHOULD BE TAKEN AS GUIDE TO APPRECIATE THE CIRC UMSTANCES THAT COMPEL AN ASSESSEE TO MAKE CERTAIN PAYMENTS IN CASH , AND SHOULD NOT AMOUNT TO VIOLATION OF PROVISIONS OF SEC 40A(3). SOME OF SUCH RECENT CASE LAWS WHEREIN SUCH EXCEPTI ONS HAVE BEEN ACCEPTED AS FALLING WITHIN THE PURVIEW OF RULE 6DD ARE AS UN DER: M/S TIRUPATI CONSTRUCTIONS VS. CIT [ITAT INDORE ITA NO. 420/2014, DATE OF PRONOUNCEMENT 30.09.20151 HERE IT WAS HELD THAT, 'IN THE ASSESSEE'S CASE TRAN SACTION WAS GENUINE, THE CONVEYANCE DEED WAS EXECUTED BEFORE THE REGISTRAR, THE NAME AND ADDRESS OF THE SELLER WAS MENTIONED IN THE SALE DEED ITSELF , THE IDENTITY OF THE PERSONS WAS NOT IN DOUBT. IN THESE CIRCUMSTANCES, THE ASSES SING OFFICER MUST HAVE COME TO THE CONCLUSION THAT THE PROVISIONS OF SECTI ON 40A(3) OF THE ACT WERE NOT APPLICABLE. CONSIDERING ALL THESE ASPECTS, WHER E GENUINENESS OF TRANSACTION IS NOT IN QUESTION, THE IDENTITY OF PAY EES IS ALSO WELL ESTABLISHED, 7 ITA NO. 26/JP/2015. TOSHIKA REAL ESTATE PVT. LTD., JAIPUR. THE PAYMENTS HAVE BEEN MADE TO THE SELLER OF THE LA ND IN RURAL AREAS, IN OUR VIEW, THE ASSESSING OFFICER RIGHTLY ACCEPTED THE CL AIM OF THE ASSESSEE AND FOUND THAT THE PROVISIONS OF SECTION40A (3) ARE NOT APPLICABLE IN THE CASE OF PURCHASE OF LAND BY THE ASSESSEE EVEN IF IT WAS ACQ UIRED AS A STOCK IN TRADE.' M/S. SUBH BUILDERS ET DEVELOPERS, VS DCIT, [ ITA NO . 131 TO 135/JODH/2014, DATE OF PRONOUNCEMENT : 28/07/2014] ANUPAM TELESERVICES VS. ITO;[ 218 ITR 46] ACE INDIA ABODES LTD.[ ITAT JAIPUR ITA NO. 79/JP/2 011] NOW, AS REGARDS THE DISALLOWANCE MADE U/S 40A(3) FO R THE PURCHASE OF PLOT IN DOCTOR'S COLONY, JAIPUR: RS. 27,50,000/- THE APPELLANT HAD PURCHASED THE SOLD PLOT FOR RS. 3 3 LACS, AGAINST WHICH A SUM OF RS. 550,000/- WAS PAID IN CHEQUE AS ADVANCE. THE SE LLER REFUSED TO ACCEPT ANY FURTHER PAYMENTS IN CHEQUE, AS HE WISHED TO BACK OU T FROM THE DEAL, AS HE THOUGHT THE LAND WAS SOLD AT A LESSER VALUE TO THE APPELLANT. THUS, WITH AN INTENTION OF AUTOMATIC CANCELLATION OF THE DEAL, TH E SELLER REFUSED TO ACCEPT ANY FURTHER AMOUNT IN CHEQUE, AND PROPOSED TO HONOUR TH E DEAL ONLY IF THE APPELLANT MADE PAYMENT IN CASH. SINCE THE APPELLANT HAD GOT A GOOD DEAL AND DID NOT WANT TO DO AWAY WITH IT, IT HAD NO OPTION BUT TO AGREE F OR THE PAYMENT OF THE BALANCE AMOUNT IN CASH. FOR MAKING THIS PAYMENT THE APPELLA NT HAD MADE A WITHDRAWAL OF CASH FROM HIS BANK A/C. THUS, THE APPELLANT HAS AMPLY PROVED THE CIRCUMSTANCES, WHICH COMPELLED IT TO MAKE THE CASH PAYMENT AND SO THIS MATTER IS ALSO COVERED BY THE SUBMISSIONS GIVEN ABOVE AS R EGARDS THE APPLICABILITY OF RULE 6DD. FURTHER, THIS FACT OF RECEIPT OF CASH IS ALSO MENTIONED IN THE REGISTERED SALE DEED OF THE PLOT. NONE OF THE ABOVE FACTS ARE DISPUTED BY THE LEARNED CIT(A), EXCEPT THAT THE LEARNED CIT(A) DID NOT APPR ECIATE THE PLEA THAT, THE CASE OF THE APPELLANT FALLS WITHIN THE EXCEPTIONS APPEAR ING IN RULE 6DD. 8 ITA NO. 26/JP/2015. TOSHIKA REAL ESTATE PVT. LTD., JAIPUR. THE APPELLANT ONCE AGAIN PLACES RELIANCE ON THE SUB MISSIONS MADE ABOVE FOR THE APPLICABILITY OF RULE 6DD, AND THUS, BASED ON ABOVE SUBMISSIONS AND THE JUDICIAL CITATIONS, THE APPELLANT HUMBLY SUBMITS TH AT THE CASE OF THE APPELLANT FALLS SQUARELY WITHIN THE AMBIT OF RULE 6 DD, AS THE BUSINESS EXPEDIENCY, CANNOT BE IGNORED WHILE JUDGING THE TRA NSACTION. AND WHEN THE MAIN PURPOSE OF ENACTING THE PROVISIONS OF SEC 40A(3) [I.E CURBING THE INVOLVEMENT OF BLACK MONEY] IS NOT DEFEATED, IN SO FAR AS THE APPELLANT HAS FILED THE BANK STATEMENT SHOWING THE WITHDRAWAL OF MONEY FOR THE PURPOSE OF MAKING CASH PAYMENTS, MAKI NG DISALLOWANCE MECHANICALLY WOULD TANTAMOUNT TO VIOLATION OF NATUR AL JUSTICE, AND THE APPELLANT SUBMITS ACCORDINGLY ALSO, SINCE THE GENUI NENESS AND IDENTITY OF THE SELLER IS NOT DISPUTED, THE ENTIRE DISALLOWA NCE MADE NEEDS TO BE FULLY DELETED AND THE APPELLANT PRAYS ACCORDINGLY AND PLEADS YOUR HONORS' TO KINDLY DIRECT THE DELETION OF DISALLOWAN CES MADE U/S 40A(3) OF THE ACT, AND OBLIGE. LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF ANUPAM T ELE SERVICE VS. ITO [2014] 268 CTR 121 (GUJ.). 4.2 ON THE CONTRARY, LD. D/R OPPOSED THE SUBMISSION S AND SUBMITTED THAT THE FACTS OF THE PRESENT CASE ARE DISTINGUISHABLE OF TH E FACTS OF THE CASE AS RELIED BY THE LD. COUNSEL FOR THE ASSESSEE. HE PLACED RELIANCE O N THE DECISION OF THE SPECIAL BENCH RENDERED IN THE CASE OF ITO VS. KENARAM SAHA & SUBHASH SAHA (2009) 116 ITD 0001. HE SUBMITTED THAT THE RATIO OF DECISION OF HONBLE HIGH COURT IS NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. 4.3 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . AS PER THE ASSESSEE THE SELLER OF THE PROPERTY INSISTED FOR PAYMENT IN CASH. IT I S ALSO CONTENDED THAT THE MONEY 9 ITA NO. 26/JP/2015. TOSHIKA REAL ESTATE PVT. LTD., JAIPUR. WAS WITHDRAWN FROM THE BANK ACCOUNT; IT HAS BEEN DU LY DISCLOSED WITH THE INCOME TAX DEPARTMENT. THE LD. COUNSEL FOR THE ASSESSEE H AS HEAVILY RELIED ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF ANUPAM TELE SERVICES VS. ITO (SUPRA). THE HONBLE HIGH COURT I N PARA 20 TO 24 HELD AS UNDER:- 20. IN THE PRESENT CASE, NEITHER THE GENUINENESS OF THE PAYMENT NOR THE IDENTITY OF THE PAYEE WERE IN ANY CASE DOUBTED. THE SE WERE THE CONCLUSIONS ON FACTS DRAWN BY THE APPELLATE COMMISSIONER. THE T RIBUNAL ALSO DID NOT DISTURB SUCH FACTS BUT RELIED SOLELY ON RULE 6DD (J ) OF THE RULES TO HOLD THAT SINCE THE CASE OF THE ASSESSEE DID NOT FALL UNDER T HE SAID EXCLUSION CLAUSE NOR WAS COVERED UNDER ANY OF THE CLAUSES OF RULE 6DD, C ONSEQUENCES ENVISAGED IN SECTION 40A(3) OF THE ACT MUST FOLLOW. 21. IN OUR OPINION, THE TRIBUNAL COMMITTED AN ERROR IN COMING TO SUCH A CONCLUSION. WE WOULD BASE OUR CONCLUSIONS ON THE FO LLOWING REASONS : (A) THE PARAMOUNT CONSIDERATION OF SECTION 40A(3) IS TO CURB AND REDUCE THE POSSIBILITIES OF BLACK MONEY TRANSAC TIONS. AS HELD BY THE SUPREME COURT IN ATTAR SINGH GURMUKH SINGH (SUPRA), SECTION 40A(3) OF THE ACT DOES NOT E LIMINATE CONSIDERATIONS OF BUSINESS EXPEDIENCIES. (B) IN THE PRESENT CASE, THE APPELLANT ASSESSEE WAS COM PELLED TO MAKE CASH PAYMENTS ON ACCOUNT OF PECULIAR SITUAT ION. SUCH SITUATION WAS AS FOLLOW - (I) THE PRINCIPAL COMPANY, TO WHICH THE ASSESSEE WAS A DISTRIBUTOR, INSISTED THAT CHEQUE PAYMENT FROM A COOPERATIVE BANK WOULD NOT DO, SINCE THE REALIZATIO N TAKES A LONGER TIME; (II) THE ASSESSEE WAS, THEREFORE, REQUIRED TO MAKE CASH PAYMENTS ONLY; (III) TATA TELESERVICES LIMITED ASSURED THE ASSESSEE THAT SUCH AMOUNT SHALL BE DEPOSITED IN THEIR BANK ACCOUNT ON BEHALF OF THE ASSESSEE; 10 ITA NO. 26/JP/2015. TOSHIKA REAL ESTATE PVT. LTD., JAIPUR. (IV) IT IS NOT DISPUTED THAT THE TATA TELESERVICES LIMIT ED DID NOT ACT ON SUCH PROMISE; (V) IF THE ASSESSEE HAD NOT MADE CASH PAYMENT AND RELIE D ON CHEQUE PAYMENTS ALONE, IT WOULD HAVE RECEIVED THE RECHARGE VOUCHERS DELAYED BY 4/5 DAYS AND THEREBY SEVERELY AFFECTING ITS BUSINESS OPERATIONS. 22. WE WOULD FIND THAT THE PAYMENTS BETWEEN THE ASS ESSEE AND THE TATA TELESERVICES LIMITED WERE GENUINE. THE TATA TELESER VICES LIMITED HAD INSISTED THAT SUCH PAYMENTS BE MADE IN CASH, WHICH TATA TELE SERVICES LIMITED IN TURN ASSURED AND DEPOSITED THE AMOUNT IN A BANK ACCOUNT. IN THE FACTS OF THE PRESENT CASE, RIGORS OF SECTION 40A(3) OF THE ACT M UST BE LIFTED. 23. WE NOTICE THAT THE DIVISION BENCH OF THE RAJAST HAN HIGH COURT IN CASE OF SMT. HARSHILA CHORDIA V. ITO [2008] 298 ITR 349 (RA J) HAD OBSERVED THAT THE EXCEPTIONS CONTAINED IN RULE 6DD ARE NOT EXHAUSTIVE AND THAT THE SAID RULE MUST BE INTERPRETED LIBERALLY. 24. BEFORE CLOSING, WE MAY CLARIFY THAT THE ABOVE O BSERVATIONS WOULD APPLY ONLY TO THE CASH PAYMENTS MADE BY THE ASSESSEE TO T HE TATA TELESERVICES LIMITED. NO SUCH PECULIAR FACTS ARISE IN CASE OF PA YMENTS MADE TO THE OTHER TWO AGENCIES VIZ., RAJVI ENTERPRISE AND R.D INFOCOM . LEARNED COUNSEL FOR THE APPELLANT ALSO CLARIFIED THAT THIS APPEAL IS CONFIN ED TO ONLY THE PAYMENTS MADE TO TATA TELESERVICES LIMITED AND NO OTHERS. IN THE PRESENT CASE, THE CONTENTION OF THE LD. COUN SEL FOR THE ASSESSEE IS THAT THE SELLER OF THE PROPERTY INSISTED FOR PAYMENT IN CASH . IT IS ALSO CONTENDED THAT SINCE THE POWER OF ATTORNEY WAS GOING TO BE EXPIRED THE A SSESSEE HAD NO OPTION BUT TO MAKE PAYMENT IN CASH. THE ASSESSEE HAS NOT PLACED ANY WRITTEN COMMUNICATION ON BEHALF OF THE SELLER OF PROPERTY TO REQUESTING FOR MAKE PAYMENT IN CASH. THE SUBMISSIONS OF THE ASSESSEE ARE MERELY BASED UPON T HE STATEMENT OF THE ASSESSEE 11 ITA NO. 26/JP/2015. TOSHIKA REAL ESTATE PVT. LTD., JAIPUR. ITSELF. THE JUDGMENT RELIED BY THE LD. COUNSEL FOR THE ASSESSEE, THE HONBLE GUJARAT HIGH COURT HAS SPECIFICALLY OBSERVED THAT THERE WAS A WRITTEN REQUEST FROM TATA TELESERVICES LIMITED VIDE CIRCULAR DATED 22 ND AUGUST 2005 AND LETTER DATED 1 ST SEPTEMBER 2005. UNDER THESE FACTS, THE DECISION OF THE HONBLE GUJARAT HIGH COURT WOULD BE APPLICABLE ONLY WHEN THE ASSESSEE IS ABLE TO DEMONSTRATE THAT SUCH PAYMENT WAS MADE AT THE INSTANCE OF THE SELLER OF T HE PROPERTY. THEREFORE, WE DEEM APPROPRIATE IN THE INTEREST OF JUSTICE TO REST ORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR DECISION AFRESH. THE ASSESSE E WOULD FURNISH CONFIRMATION FROM THE SELLER OF THE PROPERTY THAT THEY HAD INSISTED T O MAKE PAYMENT IN CASH. THE AO WOULD ALSO MAKE ENQUIRY TO VERIFY THE VERACITY OF S UCH SUBMISSIONS FROM THE SELLER OF THE PROPERTY. THESE GROUNDS I.E. 2 TO 4 ARE ALLOWE D FOR STATISTICAL PURPOSE. 5. GROUND NO. 5 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDIC ATION. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 10 TH DAY OF NOVEMBER 2017. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 10 /11/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- TOSHIKA REAL ESTATE PVT. LTD., JA IPUR. 2. THE RESPONDENT- THE ITO, WARD 4(2), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 12 ITA NO. 26/JP/2015. TOSHIKA REAL ESTATE PVT. LTD., JAIPUR. 6. GUARD FILE (ITA NO. 26/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR