SDC Foods India Ltd., New Delhi V. ACIT, New Delhi

ITA 5238/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98012 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 04-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR SENIOR
• Section: 40A(3); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE HONBLE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI A.T. VARKEY, JUDICIAL MEMBER ITA NO.5238/DEL./2012 (ASSESSMENT YEAR : 2008-09) M/S. SDC FOODS INDIA PVT. LTD., VS. ACIT, CC 19, (FORMERLY KNOWN AS STAPLE DISTRIBUTION CO.LTD.), NEW DELHI. UNIT NO, 134,1 ST FLOOR, RECTANGLE I, SAKET DISTRICT CENTRE , NEW DELHI 110 017. (PAN : AALCS1628L) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANAT KAPOOR, ADVOCATE REVENUE BY : SHRI B. R. R. KUMAR, SENIOR DR DATE OF HEARING : 04.11.2015 DATE OF PRONOUNCEMENT : 24.11.2015 ORDER PER A.T.VARKEY, JUDICIAL MEMBER : THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DI RECTED AGAINST THE ORDER OF CIT (APPEALS)-XXXIII, NEW DELHI DATED 07.08.2012 FO R THE ASSESSMENT YEAR 2008-09. 2. THE FACTS IN BRIEF ARE THAT ORIGINAL RETURN IN T HIS CASE WAS FILED ON 14.10.2008 DECLARING LOSS OF RS.6,86,736/-. A SEAR CH AND SEIZURE OPERATION WAS CARRIED OUT IN DAWAT GROUP OF CASES INCLUDING THE A SSESSEE ON 10.02.2009. ITA NO.5238/DEL./2012 2 ACCORDINGLY, STATUTORY NOTICE U/S 153A OF THE INCOM E-TAX ACT, 1961 (HEREINAFTER THE ACT) WAS ISSUED ON 07.10.2009 REQUIRING THE AS SESSEE TO FILE THE RETURN OF ITS INCOME FOR THE ABOVE ASSESSMENT YEAR WITHIN 16 DAYS OF SERVICE OF THE SAID NOTICE. THE ASSESSEE FILED THE RETURN OF ITS INCOME ON 11.1 2.2009 DECLARING TOTAL LOSS AT RS.6,86,736/- WHICH WAS DECLARED BY THE ASSESSEE IN THE ORIGINAL RETURN. PURSUANT THERETO, AO FRAMED ASSESSMENT AT A LOSS OF RS.6,01, 236/- AFTER MAKING A DISALLOWANCE OF RS.85,500/- U/S 40A(3) OF THE ACT. THE ABOVE DISALLOWANCE STOOD CONFIRMED ON APPEAL AND HENCE THIS APPEAL BY ASSESS EE BEFORE US. 3. GROUND NOS.1, 2 & 3 CHALLENGE THE VALIDITY OF NO TICE AND ORDER OF ASSESSMENT U/S 153A OF THE ACT ON THE GROUND THAT D ISALLOWANCE IS NOT BASED ON INCRIMINATING EVIDENCE FOUND AT THE PREMISES OF THE ASSESSEE DURING THE COURSE OF SEARCH. 4. ON CAREFUL CONSIDERATION, WE FIND THE PLEA NOT M AINTAINABLE AS IT IS A CASE WHERE PROCEEDINGS WERE PENDING BEFORE THE AO ON THE DATE OF SEARCH. IN FACT, NOTICE U/S 153A WAS ISSUED ON 07.10.2009 PRIOR TO THE LIMITATION FOR ISSUING NOTICE U/S 143(2) IN RESPECT OF ORIGINAL RETURN FIL ED ON 31.10.2008. THEREFORE, WE FIND NO MERIT IN THE AFORESAID GROUNDS OF THE ASSES SEE. 5. GROUND NOS.4 TO 6 RELATES TO DISALLOWANCE OF RS. 85,500/- U/S 40A(3). 6. THE LD. CIT(A) HAS UPHELD THE DISALLOWANCE BY HO LDING AS UNDER :- 2.3 I HAVE CAREFULLY CONSIDERED THE VIEWS OF THE A SSESSING OFFICER AND THE SUBMISSIONS OF THE APPELLANT ON THIS ISSUE. SECTION 40A(3) LAYS DOWN THAT NO DEDUCTION SHALL BE ALLOWED IN RES PECT OF EXPENDITURE THE PAYMENT FOR WHICH IS MADE OTHERWISE THEN BY A ITA NO.5238/DEL./2012 3 ACCOUNT PAYEE CHEQUE DRAWN ON A BANK OR ACCOUNT PAY EE BANK DRAFT, IF THE PAYMENT EXCEEDS RS.20,000/-. THE EXCEPTIONAL CIRCUMSTANCES UNDER WHICH CASH PAYMENT EXCEEDING RS.20,000/- IS A LLOWABLE ARE LISTED IN RULE 6DD OF THE INCOME TAX RULES, 1962. P AYMENT TO A LAWYER OR PAYMENT FOR LEGAL OR PROFESSIONAL SERVICE S IS NOT LISTED AS AN EXCEPTION IN RULE 6DD. IN VIEW OF THIS, THE ASSE SSING OFFICER WAS CORRECT IN DISALLOWING THE SUM OF RS.85,500/- U/S 4 0A(3). GROUND NO. 2 IS, THEREFORE, DISMISSED. 7. HAVING CONSIDERATION THE RIVAL SUBMISSION, WE FI ND THAT THE INSTANT PAYMENT DOES NOT FALL WITHIN THE EXCEPTIONS PROVIDED IN RUL E 6DD AND HENCE, THE DISALLOWANCE IS MADE IN CONFORMITY WITH THE SCOPE O F THE SECTION 40A(3) OF THE ACT. ACCORDINGLY, THESE GROUNDS HAVE NO MERITS AND ARE DISMISSED. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF NOVEMBER, 2015. SD/- SD/- (G.D.AGRAWAL) (A.T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED THE 24 TH DAY OF NOVEMBER, 2015 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXXIII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.