M/s. Gaurav Export Trades Pvt. Ltd., CHENNAI V. ITO, CHENNAI

ITA 3075/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7769 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 03-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANAT KUMAR RAHA
• Assessee Lawyers: A S SRIRAMAN
• Section: 40A(3)

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL C / SMC BENCH, CHENNAI . . . , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NO. 3075/MDS/2016 / ASSESSMENT YEAR : 2012-13 M/S. GAURAV EXPORT TRADES P LTD, C/O. SHRI A.S. SRIRAMAN, ADVOCATES, NEW NO.14, OLD NO.82, FLAT NO.5, 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI 600 020. PAN : AABCG0846Q V. THE INCOME TAX OFFICER, COMPANY WARD - 2, COIMBATORE ( /APPELLANT) ( /RESPONDENT) /APPELLANT BY : SHRI A.S. SRIRAMAN, ADVOCATE /RESPONDENT BY : SHRI SANAT KUMAR RAHA, JCIT /DATE OF HEARING : 25.01.2017 /DATE OF PRONOUNCEMENT : 23.02.2017 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 1, COIMB ATORE DATED 15.07.2016 AND PERTAINS TO THE ASSESSMENT YEAR 2012 -13. 2. THERE WAS A DELAY OF 03 DAYS IN FILING THIS APP EAL BY THE ASSESSEE. THE ASSESSEE HAS NOT FILED A PETITION FO R CONDONATION OF DELAY. I HEARD THE LD. COUNSEL FOR ASSESSEE AND TH E LD. D.R. I FIND THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE THE 2 I.T.A. NO. 3075/MDS/2016 STIPULATED TIME. THEREFORE, THE DELAY IS CONDONED AND THE APPEAL IS ADMITTED. 3. SHRI A.S. SRIRAMAN, THE LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SE CTION 40A(3) OF THE INCOME TAX ACT, 1963 (IN SHORT THE ACT). ACCORDING TO THE LD. COUNSEL, THE ASSESSEE ENGAGED ITSELF IN THE BUS INESS OF MANUFACTURING AND EXPORT OF READYMADE GARMENTS. DU RING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS PAID 23,14,227/- BY CASH TO VARIOUS PARTIES IN EXCESS OF 20,000/-. THE ASSESSEE HAS ALSO CLAIMED THE SAME AS EXPENDITURE IN THE PROFIT & LOS S ACCOUNT. ACCORDING TO THE LD. COUNSEL MANY OF THE PAYMENTS W ERE MADE ON SATURDAYS AND SUNDAYS. THEREFORE, THE ASSESSEE COU LD NOT PAY THE MONEY THROUGH BANKING CHANNEL. THE LD. COUNSEL FUR THER SUBMITTED THAT THE EXPENDITURE ARE GENUINE IN NATURE. THE PA YMENTS ARE IN RESPECT OF CONTRACT WORK MADE TO M/S. DEVA FASHIONS TO THE EXTENT OF 21,85,000/-, THE LD. COUNSEL SUBMITTED THAT THE PAY MENT WAS IN FACT MADE TO MRS. SUNITA GUPTA PROPRIETRIX OF THE D EVA FASHIONS TOWARDS ADVANCE FOR PURCHASE OF LAND. THEREFORE 21,85,000/- WAS ALSO NOT CLAIMED AS EXPENDITURE WHILE COMPUTING THE TAXABLE 3 I.T.A. NO. 3075/MDS/2016 INCOME. HENCE, THE CIT (APPEALS) IS NOT JUSTIFIED IN NOT ALLOWING THE CLAIM OF THE ASSESSEE. 4. ON THE CONTRARY, SHRI SANAT KUMAR RAHA, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSE SSEE HAS PAID MAJORITY OF THE PAYMENT TO THE VERY SAME PARTIES TH ROUGH BANKING CHANNEL. THE CLAIM OF THE ASSESSEE THAT THE PAYMEN TS WERE MADE ON SATURDAY AND SUNDAY WERE NOT JUSTIFIED. THE PA YMENTS WERE MADE IN EXCESS OF 20,000/- CONTRARY TO THE PROVISIONS OF SECTION 40A OF THE ACT. THEREFORE, THE CIT (APPEALS) HAS R IGHTLY DISALLOWED THE CLAIM OF THE ASSESSEE. REFERRING TO THE CLAIM OF THE ASSESSEE THAT A SUM OF 21,85,000/- WAS PAID FOR PURCHASE OF LAND, THE LD. D.R., SUBMITTED THAT THE PAYMENT MADE TO M/S. SUNIT A OR M/S. DEVA FASHIONS IS NOT THE SUBJECT MATTER OF ANY DISALLOWA NCE UNDER SECTION 40A(3) OF THE ACT. THEREFORE, THE CIT (APP EALS) HAS RIGHTLY CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OF FICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDL Y, THE ASSESSING OFFICER DISALLOWED 23,14,227/- UNDER SECTION 40A(3) OF THE ACT. THE PAYMENTS WERE MADE TO THE FOLLOWING PARTIES AS FOLLOWS: 4 I.T.A. NO. 3075/MDS/2016 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. SHREE DEEPAM PRINTERS VELAN KNITS S M EXPORTS SRI ANNAMALAI EXPORTS AKSHARA GARMENTS ALLWYN FABS A R FASHION TIRUPATHI TEX DEVA AGENCIES GAURAV EXPORT TRADES SREE SAKTHI MURUGAN PROCESS HARIKARAN APPARELS THE KOTHARI FABS TOTAL : : : : : : : : : : : : : : RS. 1,50,000 RS. 1,75,000 RS. 1,00,000 RS. 2,30,000 RS. 75,000 RS. 2,50,000 RS. 2,55,000 RS. 50,000 RS. 4,25,000 RS. 4,80,000 RS. 60,000 RS. 25,000 RS. 39,227 -------------------- RS.23,14,227 -------------------- AS RIGHTLY SUBMITTED BY THE LD. D.R., THE PAYMENT O F 21,85,000/- TO M/S. DEVA FASHIONS IS NOT THE SUBJEC T MATTER OF DISALLOWANCE UNDER SECTION 40A(3) OF THE ACT. WHAT WAS DISALLOWED IS VARIOUS PAYMENTS AS REPRODUCED ABOVE TO THE EXTENT OF 23,14,227/-. THE EXPLANATION OF THE ASSESSEE THAT THE PAYMENTS WERE MADE ON SATURDAYS AND SUNDAYS IS NOT SATISFACTORY. IT IS FOR THE ASSESSEE TO EXPLAIN WH AT ARE THE COMPELLING CIRCUMSTANCES TO MAKE THE PAYMENT IN CAS H. IN THE ABSENCE OF ANY EXPLANATION, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT (APPEALS) HAS RIGHTLY CONFIRME D THE ADDITION MADE BY THE ASSESSING OFFICER. 5 I.T.A. NO. 3075/MDS/2016 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED ON 23 RD FEBRUARY, 2017 AT CHENNAI. SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, /DATED, THE 23 RD FEBRUARY, 2017. JR. ! ' ! /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. #$% ( )/CIT(A)-1, COIMBATORE 4. #$% /CIT 5. ! /DR 6. &' /GF.