The Amroli Vibhag Vividh Karyakari Sahakari Mandli Ltd., Surat V. The Dy.CIT.,Circle-6, Surat

ITA 341/AHD/2013

• Counselvise Citation: 34120514 RSA 2013
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 25-07-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 04-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J P JHANGID
• Assessee Lawyers: RASESH SHAH
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI A. MOHAN ALANKAMONY, AM AND SHRI KUL B HARAT, JM) ITA NO.341/AHD/2013 ( A. Y.2009-10) THE AMROLI VIBHAG VIVIDH KARYAKARI SHAKHARI MANDALI LTD., UTRAN, AMROLI TALUKA, CHORYASI, SURAT 394 107 P. A. NO. AAAAT 3043M VS THE D. C. I. T., CIRCL-6, AAYAKAR BHAVAH, MAJURA GATE, SURAT (APPELLANT) (RESPONDENT) APPELLANT BY SHRI RASESH SHAH, AR RESPONDENT BY SHRI J. P. JHANGID, SR. DR DATE OF HEARING: 25-07- 2013 DATE OF PRONOUNCEMENT: 13-08-2013 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS FILED BY THE ASSESSEE BEING AGGRIEVED BY THE ORDER OF THE LEARNE D CIT(A)-I, SURAT IN APPEAL NO. CAS-I/TFR/6.101/240/12-13 DATED 07-11-20 12, PASSED U/S 250 READ WITH SECTION 143 (3) OF THE INCOME TAX ACT , 1961, FOR THE ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE IN HIS APPEAL HAS RAISED THREE GROU NDS WHEREIN GROUND NO.2 AND 3 ARE GENERAL IN NATURE AND DO NOT SURVIVE FOR ADJUDICATION. THE SOLE SURVIVING GROUNDS NO.1 IS RE PRODUCED HEREIN UNDER FOR REFERENCE:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) HAS ITANO.341/A/2013(AY-2009-10) THE AMROLI VIBHAG VIVIDH KARYAKARI SHAKHARI MANDALI LTD. VS DCIT, CIR-6,SURAT 2 ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFF ICER IN MAKING DISALLOWANCE OF RS.1,01,650/- U/S 40A(3) OF THE ACT . 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN AOP ENGAGED IN THE BUSINESS OF TRADING IN CONSUMER STORES AND MARK ETING OF AGRICULTURAL PRODUCE OF ITS MEMBERS FILED ITS E-RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 02-09-2009 DECLARING TOTAL INCOME O F RS.19,69,068/-. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT U/S 1 43(2) OF THE ACT AND ASSESSMENT ORDER WAS PASSED BY THE LEARNED AO U/S 1 43(3) OF THE ACT ON 28-10-2011 DETERMINING THE TOTAL INCOME OF THE A SSESSEE AT RS.20,70,720/- WHEREIN ADDITION OF RS.1,01,650/- WA S MADE U/S 40A(3) OF THE ACT ON ACCOUNT OF PAYMENTS MADE TO THE TRANS PORTERS IN CASH EXCEEDING RS.20,000/-. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE LEARNED AO NOTICED THAT THE ASSESSEE PURCHASED CRACKERS FROM SHIVAKASHI AND PAID TRANSPORTATION CHARGES. THE LEA RNED AO REQUIRED THE ASSESSEE TO FURNISH THE DETAILS OF EXPENSES INC URRED FOR PURCHASE OF CRACKERS. FROM THE RECEIPTS/VOUCHERS FURNISHED BY T HE ASSESSEE, THE LEARNED AO OBSERVED THAT THE ASSESSEE HAD MADE THE FOLLOWING PAYMENTS TO THE TRANSPORTERS IN CASH:- DATE AMOUNT REMARKS 14.08.2008 42,000/- PAYMENT TO TRANSPORTERS 18.08.2008 37,250/- PAYMENT TO TRANSPORTERS 13.10.2008 22,400/- PAYMENT TO TRANSPORTERS TOTAL 1,01,650 30.09.2008 46,250/- PAYMENT TO TRANSPORTERS EXEMPT U/R. 6DD(J) OF THE I. T. RULES, DUE TO BANK HOLIDAY ITANO.341/A/2013(AY-2009-10) THE AMROLI VIBHAG VIVIDH KARYAKARI SHAKHARI MANDALI LTD. VS DCIT, CIR-6,SURAT 3 ON THE BASIS OF THE ABOVE, THE LEARNED AO ADDED THE AFORESAID AMOUNT OF RS.1,01,650/- TO THE TOTAL INCOME OF THE ASSESS EE BY INVOKING PROVISIONS OF SECTION 40A(3) OF THE ACT. 3.1 THE ASSESSEE CARRIED THE MATTER BEFORE THE LEAR NED CIT(A) AND THE LEARNED CIT(A) SUSTAINED THE ADDITION MADE BY THE L EARNED AO BY HOLDING AS UNDER:- 6. THE ASSESSING OFFICER HAS MADE DISALLOWANCE U/S 40A (3) OF THE I T ACT TO THE EXTENT OF RS.1,01,650/- IN RESPECT OF PAYMENT MADE IN CASH TO TRANSPORTERS. THE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS SUBMITTED THAT THEY HAVE MADE PAYMENTS IN CASH TO THE TRANSPORTERS AND RELIED ON THE FOLLOWING CASE LAWS: - 1] CIT VS J. RAJMOHAN PILLAI (2004) 134 TAXMAN 168 (KER) (2004 186 CTR 296 (KER) 2. CIT VS. RHYDBURG PHARMACEUTICALS LTD. (2004) 187 CTR (DEL) 485. 6.1 THE APPELLANTS SUBMISSION HAS BEEN PERUSED. B OTH THE CASE LAWS RELIED UPON BY THE APPELLANT HELD THAT THE SPE CIAL CIRCUMSTANCES MENTIONED IN RULE 6DD (J) ARE SATISFIED AND, THEREF ORE, ADDITION CANNOT BE MADE. THE CASE LAW REPORTED IN 186 CTR 296 (KER) ALS RELIED ON CBDT CIRCULAR NO.220 DATED 31.5.1977. HOWEVER, RULE 6 DD(J) OF THE INCOME TAX RULE HAS BEEN AMENDED AFTER THE ASSESSME NT YEARS TO WHICH THE JUDGMENTS RELIED ON PERTAIN TO. CASE 186 CTR (KER) 296 PERTAINS TO ASSESSMENT YEAR 1990-91, WHILE THE JUDG MENT REPORTED IN 187 CTR (DEL) 485 ALSO PERTAINS TO PERIOD PRIOR TO THE AMENDMENT. 6.2 THE NEW RULE 6DD(J) ALLOWS THE PAYMENT IN CASH , ONLY IF THE BANKS ARE CLOSED ON THE DATE OF PAYMENT, ON ACCOUNT OF HOLIDAY OR STRIKE. THEREFORE, THE APPELLANTS CASE IS NOT COVE RED BY THE EXEMPTION AS PROVIDED IN RULE 6 DD(J) OF THE I T RULES. CONSE QUENTLY, THE APPEAL IS DISMISSED . 3.2 AGAINST THIS ORDER OF THE LEARNED CIT(A), THE A SSESSEE IS NOW IN APPEAL BEFORE US. 4. BEFORE US THE LEARNED AR ARGUED STATING THAT THE ASSESSEE HAD NOT PAID ANY AMOUNT EXCEEDING RS.20,000/- OR AGGREGATE OF PAYMENT EXCEEDING RS.20,000/- TO ANY PERSON IN A DAY. HE, T HEREFORE, PLEADED THAT THE LEARNED AO HAD WRONGLY INVOKED SECTION 40A (3) OF THE ACT AND ITANO.341/A/2013(AY-2009-10) THE AMROLI VIBHAG VIVIDH KARYAKARI SHAKHARI MANDALI LTD. VS DCIT, CIR-6,SURAT 4 THE ADDITION MADE THEREON MAY BE DELETED. THE LEARN ED DR ARGUED IN SUPPORT OF THE ORDER OF THE LEARNED CIT(A) AND PRAY ED THAT HIS ORDER MAY BE UPHELD. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE REVENUE AND CAREFULLY CONSIDERED THE MATERIALS AVAI LABLE ON RECORD. ON PERUSING THE ASSESSMENT ORDER WE FIND THAT THE LEAR NED AO HAD ONLY MENTIONED THAT THE AGGREGATE PAYMENTS MADE TO TRANS PORTERS ON A SINGLE DAY WHICH EXCEEDED RS.20,000/- WAS RS.42,000 /- ON 14-02-2008, RS.37,250/- ON 18-08-2008 AND RS.22,400/- ON 13-10- 2008 AND ACCORDINGLY THE LEARNED AO HAD MADE AN ADDITION OF RS.1,01,650/- BEING THE AGGREGATE OF THE SAME. FURTHER, THE LEARNED AO HAD REMARKED WHILE INVOKING THE PROVISIONS OF SECTION 40A (3) OF THE A CT THAT PERUSAL OF THE DETAILS FURNISHED REVEALED THAT THE ENTIRE PAYMENT WAS MADE IN CASH AND MOST OF THE PAYMENTS EXCEEDED RS.20,000/-. IN SOME CASES WHICH CONSTITUTE ONLY MINOR PORTION OF THE W HOLE PAYMENT, THE ASSESSEE HAS ALSO TRIED TO VIOLATE THE PROVISIO NS OF SECTION 40A (3) OF THE ACT BY SPLITTING UP THE CASH PAYMENT AND SHOWING THE SAME TO BE MADE IN THE AMOUNT LESS THAN RS.20,000/- ON THE SAME DAY. THE ASSESSEE WAS ASKED TO PRODUCE THE BILLS AN D VOUCHERS OF THE SAME. HOWEVER, THE ASSESSEE DID NOT FURNISH THE SAME. IN VIEW OF THE ABOVE FACTS, IT IS CRYSTAL CLEAR THAT THE AS SESSEE HAS CLEARLY VIOLATED THE PROVISIONS OF SECTION 40A (3). FROM THE ABOVE, IT IS EVIDENT THAT THE LEARNED AO HAD NOT SPECIFIED THE N AME OF THE TRANSPORTERS FOR WHOM PAYMENTS WERE MADE AGGREGATE OF WHICH IN A SINGLE DAY EXCEEDED RS.20,000/-. FURTHER, THE LEARN ED AO HAD REMARKED THAT IN MOST OF THE CASES PAYMENTS EXCEEDED RS.20,0 00/- WITHOUT CITING THE INSTANCES. HE ALSO COMMENTED THAT THE ASSESSEE HAD TRIED TO VIOLATE THE PROVISIONS OF SECTION 40A (3) OF THE ACT BY SPL ITTING UP CASH PAYMENTS ITANO.341/A/2013(AY-2009-10) THE AMROLI VIBHAG VIVIDH KARYAKARI SHAKHARI MANDALI LTD. VS DCIT, CIR-6,SURAT 5 TO DIFFERENT DATES WITHOUT DEMONSTRATING THE SAME I N HIS ORDER. THE LEARNED CIT(A) ENDORSED THE ORDER OF THE LEARNED AO WITHOUT MAKING ANY CLEAR CUT FINDING ON THE ISSUE. BEFORE US, THE LEARNED AR HAS LAMENTED THAT THE ASSESSEE HAS NOT MADE ANY PAYMENT EXCEEDING RS.20,000/- OR AGGREGATE OF WHICH EXCEEDED RS.20,00 0/- IN ORDER TO ATTRACT THE PROVISIONS OF SECTION 40A (3) OF THE AC T. THEREFORE, IN THESE CIRCUMSTANCES, IN THE INTEREST OF JUSTICE, WE ARE O F THE CONSIDERED VIEW THAT THE MATTER SHOULD BE REFERRED BACK TO THE FILE OF THE LEARNED AO TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE TO CLA RIFY THE FACTS. ACCORDINGLY, WE HEREBY REMIT BACK THE CASE TO THE F ILE OF THE LEARNED AO FOR DE NOVO CONSIDERATION AND TO PASS APPROPRIATE O RDER AS PER LAW AND MERITS. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 13-9-2013 SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD ITANO.341/A/2013(AY-2009-10) THE AMROLI VIBHAG VIVIDH KARYAKARI SHAKHARI MANDALI LTD. VS DCIT, CIR-6,SURAT 6 1. DATE OF DICTATION: DIRECT ON COMPUTER 14-08-13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER 14-08-13 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: