ITO ,W-1, Dewas, Dewas V. Shri Yashwant Karkare, Dewas

ITA 737/Ind/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7289 (ITAT-INDORE)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 07-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Section: 40A(3); 143(3)

Judgement Text

[ITA NO.737/IND/2018] [SHRI YASHWANT KARKARE, DEWAS] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.737/IND/2018 ASSESSMENT YEAR: 2010-11 ITO WARD - 1 DEWAS / VS. SHRI YASHWANT KARKARE 337, ALKAPURI, DEWAS ( APPELLANT ) ( REVENUE ) P.A. NO. AJVPK8958M APPELLANT BY SHRI R.P. MAURYA, CIT (DR) RESPONDENT BY SHRI SANJAY AGRAWAL, A.R. DATE OF HEARING: 27.06.2019 DATE OF PRONOUNCEMENT: 29.07.2019 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE REVENUE AGAINST ORDER OF THE CIT(A ), UJJAIN DATED 20.6.2018 PERTAINING TO THE ASSESSMENT YE AR 2010-11. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: [ITA NO.737/IND/2018] [SHRI YASHWANT KARKARE, DEWAS] 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.5,46,0 36/- MADE U/S 40A(3) OF THE I.T. ACT. IGNORING THE FACT THAT THE ASSESSING OFFICER HAS VERIFIED THE BOOKS OF ACCOUNTS DURING THE ASSESSMEN T PROCEEDINGS AND CAME TO THE CONCLUSION THAT THE PAYMENTS MADE W ERE IN CONTRAVENTION OF PROVISIONS OF SECTION 40A(3) OF TH E I.T. ACT, 1961 . 2. THE REVENUE HAS RAISED SOLITARY GROUND AGAINST DELETING THE ADDITION OF RS.5,46,036/- MADE BY THE A .O. BY INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE IN COME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT). THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT CASE OF THE ASSESSEE WAS REOPENED AND THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT WAS FRAMED BY ORDER DATED 29.12.2016. THE A.O. H AS OBSERVED THAT THE ORIGINAL ORDER U/S 143(3) OF THE AC T WAS PASSED ON 13.3.2013 ASSESSING INCOME AT RS.7,81,290/-. SUBSEQUENTLY, IT WAS NOTICED BY THE A.O. THAT THE ASSES SEE MADE A PAYMENT OF RS.5,46,036/- IN CASH ON ACCOUNT OF INCENTIVE, SWEET PURCHASE AND UNIFORM EXPENSES. THEREFORE, IT WAS PROPOSED TO REOPEN THE ASSESSMENT AN D THEREAFTER AFTER OBTAINING THE REQUISITE APPROVAL FROM TH E [ITA NO.737/IND/2018] [SHRI YASHWANT KARKARE, DEWAS] 3 LD. CIT, UJJAIN, THE ASSESSMENT WAS REOPENED. THE A.O . MADE ADDITION OF RS.5,46,036/- BY DISALLOWING THE EXPENSES BY INVOKING THE PROVISIONS OF SECTION 40A( 3) OF THE ACT. AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEF ORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS DE LETED THE ADDITIONS. 3. LD. D.R. RELIED UPON THE ASSESSMENT ORDER AND SUBMITTED THAT THE A.O. HAS RIGHTLY DISALLOWED THE EXPENDITURE AND ADDED TO THE INCOME OF THE ASSESSEE AS THE PAYMENT WAS MORE THAN THE PRESCRIBED LIMIT. 4. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE BEFORE THE LD. CI T(A) AND ALSO RELIED UPON THE DECISION OF THE LD. CIT(A). LD. COUNSEL SUBMITTED THAT THE ASSESSING OFFICER GROSSLY ERRED IN INVOKING THE PROVISIONS OF SECTION 40A(3) OF THE ACT AS THERE WAS NO VIOLATION OF PROVISIONS OF SECTION 40A(3 ) OF THE ACT. [ITA NO.737/IND/2018] [SHRI YASHWANT KARKARE, DEWAS] 4 5. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIALS AVAILABLE ON RECORDS AND GONE THROUGH THE ORDER S OF THE AUTHORITIES BELOW. THE LD. CIT(A) HAS GIVEN A FINDING OF FACT IN HIS ORDER AT PARA NO.4.2, WHICH IS REPRODUC ED AS UNDER FOR THE SAKE OF CLARITY:- 4.2 GROUND NO.6:- THROUGH THIS GROUND OF APPEAL THE APPELLANT HAS CHALLENGED THE ADDITION OF RS.5,46,036/- U/S 40 A(3) OF THE I.T. ACT ON ACCOUNT OF CASH PAYMENT. THE A.O. HAS NOT V ERIFIED THE VOUCHERS REGARDING EXPENSES. THE APPELLANT HAS WIT HDRAWN THE CASH FROM THE BANK FOR THE PAYMENT OF VARIOUS EXPEN SES RELATED TO BUSINESS. THIS PAYMENT WAS WITHDRAWN BY THE PERSON RELATED TO BUSINESS. AFTER WITHDRAWAL THE CASH PAYMENT WAS MA DE TO VARIOUS PERSONS. THE CASH PAYMENT MADE TO THE INDIVIDUAL P ERSON IS BELOW RS.20,000/-. THE APPELLANT FURNISHED THE VOUCHERS IN SUPPORT OF HIS CLAIM. THE APPELLANT HAS NOT MADE ANY PAYMENT EXCE EDING RS.20,000/- TO ONE PERSON IN A SINGLE DAY. THEREFO RE, THE PROVISIONS OF SECTION 40A(3) ARE NOT APPLICABLE. THEREFORE, T HE ADDITION MADE BY THE A.O. AMOUNTING TO RS.5,46,036/- IS DELETED . THEREFORE, THE APPEAL ON THIS GROUND IS ALLOWED . 6. FROM THE ABOVE FINDING, IT IS CLEAR THAT THE ASSESSE E HAS NOT MADE ANY PAYMENT EXCEEDING RS.20,000/- TO ONE PERSON IN A SINGLE DAY. THIS FINDING IS NOT REBUTTE D BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD, THEREFORE, I DO NOT SEE ANY REASON TO INTERFERE IN T HE FINDING [ITA NO.737/IND/2018] [SHRI YASHWANT KARKARE, DEWAS] 5 OF THE LD. CIT(A). THE GROUND RAISED BY THE REVENUE IN THIS APPEAL IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 29. 07.2019. SD/- (KUL BHARAT) JUDICIALMEMBER INDORE; DATED : 29/07/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE