Sh. Kishor Kumar Agarwal, Firozabad V. I.T.O.- 5(2), Firozabad

ITA 290/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0517 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 10 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-01-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 29-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.290/AGR/2012 ASSESSMENT YEAR: 2008-09 SHRI KISHORE KUMAR AGARWAL, VS. INCOME TAX OFFIC ER 5(2), 252, KISHANGANJ, AGRA GATE, FIROZABAD. FIROZABAD. (PAN: AFKPA 0551 R). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SAHIB P. SATSANGEE, C.A. RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 10.01.2013 DATE OF PRONOUNCEMENT OF ORDER : 08.02.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER DATED 01.03.2012 PASSED BY THE LD. CIT(A)-II, AGRA FOR THE ASSESSMEN T YEAR 2008-09. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. BECAUSE THE LEARNED AUTHORITIES BELOW HAVE ERRE D ON FACTS AND IN LAW IN DISALLOWING A SUM OF RS.4,76,000/- UNDER SECTION 40A(3) WITHOUT APPRECIATING THE POSITION OF LAW AS ON THE DATE OF PAYMENT MADE THAT THERE WAS NO CONTRAVENTION OF PROVISIONS OF SECTION 40A(3) OF THE INCOME TAX ACT, 1961. ITA NO.290/AGR/2012 A.Y. 2008-09 2 2. BECAUSE THE LEARNED AUTHORITIES BELOW HAVE ERRED ON FACTS AND IN LAW IN IGNORING THE EXCEPTIONAL AND UNAVOIDABLE CIRCUMSTANCES AND THE CONSIDERATION OF BUSINESS EXPEDIENCY FOR WHICH THE PAYMENT HAS BEEN MADE FOR PURCHASE OF BRICKS AND CEMENT HAVING REGARD TO THE NATURE OF CIVIL CONSTRUCTION WORK EXECUTED DURING T HE YEAR UNDER CONSIDERATION. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD TO OR DEL ETE ANY OF THE GROUNDS HEREINBEFORE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E DERIVES INCOME FROM CONTRACT FOR LABOUR SUPPLY. THE A.O. MADE THE ADDITION OF R S.4,76,000/- INVOKING SECTION 40A(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREI NAFTER). DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE B RICKS WERE PURCHASED FROM M/S. KRISHNA INT UDYOG, FIROZABAD. THE A.O. NOTICED THA T CASH PAYMENT OF RS.2,52,000/- WAS PAID. SIMILARLY, THE ASSESSEE HA S SHOWN PURCHASE OF CEMENT IN CASH EXCEEDING RS.20,000/- FOR RS.2,24,000/-. 4. THE CIT(A) CONFIRMED THE ORDER OF THE A.O. 5. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE CONTENTION OF THE ASSESSEE WAS THAT THE PURCHAS E OF BRICKS FOR RS.2,52,000/- THOUGH MADE IN CASH BUT EACH VOUCHER WAS FOR BELOW RS.20,000/-. THE LD. AUTHORISED REPRESENTATIVE REFERRED PAGE NO.7 OF ASS ESSEES PAPER BOOK IN SUPPORT OF HIS CONTENTION. AN AFFIDAVIT HAS ALSO BEEN FURN ISHED, OF WHICH COPY HAS BEEN ITA NO.290/AGR/2012 A.Y. 2008-09 3 PLACED AT PAGE NO.8 OF ASSESSEES PAPER BOOK. SIMI LAR IS THE POSITION IN RESPECT OF PURCHASE OF CEMENT, A COPY OF LEDGER HAS BEEN PLACE D AT PAGE NOS.9 & 10 OF THE PAPER BOOK. IT IS ALSO SUBMISSION OF THE LD. AUTHO RISED REPRESENTATIVE THAT THE ASSESSEE HAS FURNISHED SUFFICIENT MATERIAL IN THE F ORM OF CONFIRMATION BY WAY OF AFFIDAVIT AFFIRMING THE SUPPLY OF GOODS ALONG WITH DETAILS OF PAYMENTS. THERE IS NO DISPUTE ABOUT THE IDENTITY OF THE PAYEES. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT BEFORE THE AMENDMENT W.E.F. A.Y. 200 9-10 SECTION 40A(3) IS NOT APPLICABLE IF EACH PAYMENT IS MADE OF LESS THAN RS. 20,000/-. THE AMENDMENT IN SECTION 40A(3) WAS MADE BY THE FINANCE ACT, 2008 W. E.F. 2009-10. THE LD. AUTHORISED REPRESENTATIVE HAS ALSO REFERRED A C.B.D .T. CIRCULAR NO.1/2009 DATED 27.03.2009 EXPLANATORY NOTES TO THE PROVISIONS OF T HE FINANCE ACT 2008. IN THE CASE UNDER CONSIDERATION, THE ADMITTED FACTS OF THE CASE ARE THAT EACH VOUCHER OF EXPENDITURE WAS THOUGH PAID IN CASH BUT THAT WAS FO R LESS THAN RS.20,000/- BEFORE THE AMENDMENT IN SECTION 40A(3) WHICH IS APPLICABLE FROM A.Y. 2009-010. VARIOUS COURTS HAVE APPROVED SUCH SPLITTING BY INTE RPRETING THE WORDS IN A SUM USED IN THE SECTION TO MEAN A SINGLE SUM THEREBY AP PLYING THE LIMIT TO EACH TRANSACTION. SINCE THE AMENDMENT IS W.E.F. A.Y. 20 09-10 AS PER C.B.D.T. CIRCULAR NO.1/2009 DATED 27.03.2009, THUS, THE AMENDED PROVI SIONS IS NOT APPLICABLE IN A.Y. 2008-09. THE CASE OF THE ASSESSEE UNDER CONSI DERATION IS FOR A.Y. 2008-09. THE CASE OF THE ASSESSEE IS COVERED BY THE JUDGMENT OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. TRIVENIPRASAD PAN NALAL, 228 ITR 680 (M.P.) AND ITA NO.290/AGR/2012 A.Y. 2008-09 4 JUDGEMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. KOTHARI SANITATION & TILES (P). LTD., 282 ITR 117 (MAD.) WHEREIN IT HA S BEEN HELD THAT THE WORDS USED ARE IN A SUM I.E. SINGLE SUM, THEREFORE, IRRESPEC TIVE OF ANY NUMBER OF TRANSACTIONS WHERE THE AMOUNT DOES NOT EXCEED THE AMOUNT IN EACH TRANSACTION, SECTION 40A(3) WILL NOT APPLY. WE RESPECTFULLY FOLLOW THE ABOVE J UDGEMENT OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. TRIVENI P RASAD PANNA LAL (SUPRA) AND THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE O F CIT VS. KOTHARI SANITATION AND TILES PVT. LTD. (SUPRA) AND FIND THAT THE ADDIT ION IS NOT WARRANTED UNDER SECTION 40A(3) OF THE ACT FOR A.Y. 2008-09. THEREFORE, THE ADDITION MADE BY THE A.O. OF RS.4,76,000/- IS DELETED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY