SREE HANUMAN BHANDAR, CUTTACK V. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1(1), CUTTACK, CUTTACK

ITA 73/CTK/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7620 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 28-04-2024
• Assessment Year: 2010-2011
• Appeal Filed On: 25-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed to accrue or arise in india
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE MANISH AGARWAL Sree Hanuman Bhandar, Malgodown, Cuttack. PAN/GIR No (Appellant Per Bench This is an appeal filed by the assessee against the order of the ld CIT(A), NFAC, Delhi dated Cuttack/10024/2016 2. Shri P.K.Mishra, S.C.Mohanty, 3. It was submitted by ld AR that the addition in the present case was on account of invoking the provisions of section 40A(3) of the Act. It was IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI GEORGE MATHAN, JUDICIAL AND MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.73/CTK/2024 Assessment Year : 2010-2011 Sree Hanuman Bhandar, Malgodown, Cuttack. Vs DCIT, Circle PAN/GIR No.AAEFS 6005 M (Appellant) .. ( Respondent Assessee by : Shri P.K.Mishra, Adv Revenue by : Shri S.C.Mohanty, ld Sr DR Date of Hearing : 29/0 Date of Pronouncement : 29/0 O R D E R This is an appeal filed by the assessee against the order of the ld CIT(A), NFAC, Delhi dated 27.12.2023 in Appeal No.CIT(A), Cuttack/10024/2016-17 for the assessment year 2010 P.K.Mishra, ld AR appeared for the assessee and Shri Ld Sr. DR appeared for the revenue. It was submitted by ld AR that the addition in the present case was on account of invoking the provisions of section 40A(3) of the Act. It was Page1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER , ACCOUNTANT MEMBER 2011 DCIT, Circle-1(1), Cuttack Respondent) , Adv : Shri S.C.Mohanty, ld Sr DR 04/2024 /04/2024 This is an appeal filed by the assessee against the order of the ld 27.12.2023 in Appeal No.CIT(A), 2010-2011. d AR appeared for the assessee and Shri It was submitted by ld AR that the addition in the present case was on account of invoking the provisions of section 40A(3) of the Act. It was ITA No.73/CTK/2024 Assessment Year : 2010-2011 Page2 | 4 the submission that the assessee is a wholesale dealer in pulses, edible oil and other grocery items. It was the submission that it was only on account of the demand of the seller, the assessee has paid cash. It was the submission that the trading results by the assessee have been accepted. The books of account of the assessee have also been accepted. The identity of the seller has also been established. Only because the assessee has paid cash, the disallowance has been made. It was the submission that if the disallowance is considered, the net profit of the assessee would go far high, it would be against the business norms. It was the submission that the assessee has not produced the letter, where the seller had demanded cash from the assessee. It was the submission that the issues may be restored to the file of the AO and the assessee would be in a position to substantive the reasons for the payment in cash. 4. In reply, ld Sr DR submitted that the provisions of Rule 6DD no more survives in the statute. It was the submission that the addition as made in the assessment order is not on account of any discrepancy in the books of account of the assessee. It was the submission that the cash payment has been made in excess of the prescribed limit, which is a statutory violation and this is a case of deemed income in the hands of the assessee. It was the submission that this deemed income being assessed does not only get the net profit of the assessee, therefore, the addition made by the AO and confirmed by the ld CIT(A) is liable to be sustained. ITA No.73/CTK/2024 Assessment Year : 2010-2011 Page3 | 4 5. We have considered the rival submissions. It has been clearly submitted by ld AR that the assessee would be in a position to substantiate the reasons for the payment of cash for the purchases. A perusal of the assessment order also clearly shows that the purchase has been made by the assessee from M/s. Jaganath Distributors and the Assessing Officer has categorically stated that the party Jaganath Distributors was genuine and the purchases were also genuine. The Assessing officer has also categorically recorded that the assessee had agreed to make payment in cash because the concession rate was charged by the party against cash payment. No evidence has been produced by the assessee that Jaganath Distributor has demanded cash. This being so, the issues in this appeal are restored to the file of the Assessing Officer to grant the assessee adequate opportunity to substantiate his case as to why he has paid cash against purchases. The assessee is directed to produce the evidence in support of the fact that the Jagannath Distributors has demanded payment in cash and thereafter, the AO will decide the issue as per law. 6 . In the result, appeal of the assessee stands allowed for statistical purposes . Order dictated and pronounced in the open court on 29/04/2024. Sd/- sd/- (Manish Agarwal) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER ITA No.73/CTK/2024 Assessment Year : 2010-2011 Page4 | 4 Cuttack; Dated 29/04/2024 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : Sree Hanuman Bhandar, Malgodown, Cuttack 2. The Respondent: DCIT, Circle-1(1), Cuttack 3. The CIT(A)- NFAC, Delhi 4. Pr.CIT, Bhubaneswar 5. DR, ITAT, 6. Guard file. //True Copy//