ITO-Ward-1, Kurukshetra V. Shri Jasvir Singh, Kurukshetra

ITA 94/CHANDI/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5009 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-02-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 27-01-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANAND JHA
• Assessee Lawyers: ASHWANI GARG
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice; Additional evidence; Assessment record; FORM 26AS
• Section: 40A(3); 191; 44AB; 43; 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A CHANDIGARH BEFORE: SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SH. R.L. NEGI, JUDICIAL MEMBER ./ ITA NO.94/CHD/2020 / ASSESSMENT YEAR : 2013-14 THE INCOME TAX OFFICER, WARD-1, KURUKSHETRA. VERSUS SH. JASVIR SINGH S/O RANDHIR SINGH, H.NO.287A, VILLAGE DIWANA, TEHSIL PEHOWA, DISTT. KURUKSHETRA. ./ PAN NO: CNQPS4895G / APPELLANT / RESPONDENT (VIRTUAL COURT) / ASSESSEE BY : SHRI ASHWANI GARG, CA ! / REVENUE BY : SHRI ANAND JHA, CIT ' # $/ DATE OF HEARING : 02.02.2021 %&'( $/ DATE OF PRONOUNCEMENT : 09.02.2021 / ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: THE ABOVE APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS), KARNAL [(IN SHORT REFERRED TO AS CIT(A) ] DATED 20.11.2019 RELATING TO ASSESSMENT YEAR 2013-14, PA SSED U/S 250(6)) OF THE INCOME TAX ACT, 1961 (HEREINAFTER RE FERRED TO AS ACT. 2. THE SOLITARY ISSUE IN THE PRESENT APPEAL RELATE S TO THE DISALLOWANCE OF PURCHASES OF RS.3,11,58,000/- MADE FOR THE REASON THAT THE PAYMENT RELATING TO THE SAME WERE M ADE IN ITA NO.94/CHD/2020 A.Y. 2013-14 PAGE 2 OF 10 CASH IN CONTRAVENTION OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT. 3. WE HAVE HEARD BOTH THE PARTIES. THE LD.CIT(A) HA S ALLOWED THE ASSESSEES APPEAL GIVING THE FOLLOWING FINDINGS AT PARA 3.2 OF HER ORDER AS UNDER: FINDINGS:- I HAVE EXAMINED THE FACTS OF THE CASE, THE SUBMISSIONS MADE BY THE APPELLANT AND THE REMAND REPORT OF THE ASSESSING OFFICER (A.O.) DATED 28.08.2019. IN THIS CASE, A SUM OF RS.3,11,58,000/- WAS ADDED U/S 40A(3) OF THE IT ACT. ADDITIONAL EVIDENCE WAS FILED UNDER RULE 46A OF THE IT RULES AND ADMITTED. THE A.O., AFTER EXAMINING THE EVIDENCES FILED BY THE APPELLANT ON THIS ISSUE, HAS NOT FOUND ANYTHING CONTRARY. HENCE, THE SOURCE OF CASH DEPOSI TS AS EMANATING OUT OF TRANSACTIONS WITH M/S PICCADILY AGRO INDUSTRIES WITH THE REASONS FOR THE SAME AND CONFIRMED BY THE LATTER IS ACCEPTED. THE ADDITION IS, THEREFORE, DELETED. THIS GROUND OF APPEAL IS ALLOWED. 4. AS IS EVIDENT FROM THE ABOVE THE ORDER PASSED BY THE LD.CIT(A) ON THE ISSUE IS CRYPTIC AND THE BASIS FOR ALLOWING THE ASSESSEES APPEAL DOES NOT COME OUT CLEARLY IN THE SAME. THE LD.CIT(A) STATES THAT THE ADDITIONAL EVIDENCES WERE FILED AND EXAMINED BY THE AO, BUT MAKES NO MENTION OF WHAT T HE ADDITIONAL EVIDENCES WERE. SHE FURTHER STATES THAT THE AO AFTER EXAMINING THE SAME FOUND NOTHING TO THE CONTRARY. N OW THIS FINDING OF THE LD.CIT(A) IS NEITHER HERE NOR THERE. WHAT WERE ITA NO.94/CHD/2020 A.Y. 2013-14 PAGE 3 OF 10 THE ADDITIONAL EVIDENCES, AND THE SAID EVIDENCES WH ATEVER THEY WERE, WERE FOUND NOT BEING CONTRARY TO WHAT? THERE IS NO CLARITY AT ALL REGARDING THE FACTS LEADING TO THE A FORESAID FINDINGS OF THE LD.CIT(A) NOR AS TO HOW THE CLAIM O F THE ASSESSEE IS ALLOWABLE AS PER PROVISIONS OF SECTION 40A(3) OF THE ACT. 5. A COPY OF THE REPORT OF THE AO ON THE ADDITIONAL EVIDENCES FILED BY THE AO, ON WHICH THE LD.CIT(A) HAS ALSO PL ACED RELIANCE FOR ALLOWING THE ASSESSEES APPEAL, WAS ALSO PLACED BEFORE US. THE SAID REPORT READS AS UNDER: KINDLY REFER TO YOUR OFFICE LETTER F.NO. CIT(A)/KNL/2018-19/75 DATED 06.04.2018 ON THE SUBJECT CITED ABOVE. 2. AS REGARD TO THE ADMISSIBILITY OF ADDITIONAL EVIDENCES UNDER RULE 46A, THE ASSESSEE HAS NOT GIVE N ANY REASONS FOR NOT FURNISHING THE EVIDENCES DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, COMMENTS ON THE SUBMISSIONS/ADDITIONAL EVIDENCES ON MERITS ARE AS UNDER: 2.1 BRIEF FACTS OF THE CASE ARE THAT THE CASE OF TH E ASSESSEE WAS SELECTED FOR SCRUTINY THROUGH CASS WIT H THE REASONS NON CORPORATE ASSESSEES HAVING INCOME FROM BUSINESS TO WHICH SECTION 44AB APPLIES LARGE CASH DEPOSITS & TAX CREDITS LAND RECEIPTS) IN ITR IS LESS THAN TAX CREDIT IN 26AS DURING THE YEAR. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD FILED AUDIT REPORT BALANCE SHEET, TRADING AND PROFIT AND LOSS ACCOUNT ALONGWITH TWO BANK STATEMENTS. THE ASSESSEE HAD CLAIMED EXPENDITURE OF RS.6,37,87,630/- AS PURCHASES IN THE TRADING ACCOUN T AND DID NOT PRODUCE BOOKS OF ACCOUNT BUT AGGREGATE OF PAYMENTS MADE FRO PURCHASES THROUGH CHEQUE/DD COMES TO RS.3,26,29,600/- AS AGAINST THE TOTAL PURCHASE OF RS.6,37,87,600/-. FURTHER, IT WAS ALSO ITA NO.94/CHD/2020 A.Y. 2013-14 PAGE 4 OF 10 NOTICED THAT THERE WERE NO SUNDRY CREDITORS IN THE BALANCE SHEET, THEREFORE, IT CONFIRMS THE FACT THAT THE ASSESSEE HAD MADE ALL THE PURCHASES IN CASH DURING THE YEAR HIMSELF. THEREFORE, THE BALANCE AMOUNT OF RS.3,11,58,000/- WAS ADDED TO THE RETURNED INCOME O F THE ASSESSEE TREATING THE SAME TO HAVE BEEN PAID THROUGH CASH BY THE ASSESSEE IN VIOLATION TO THE PROVISIONS OF SECTION 40A(3). FURTHER THE ASSESSEE HAD ADVANCED A LOAN OF RS.28,00,000/- TO A PERSON THROUGH CHEQUE DATED 12.03.2013. HOWEVER, IT WAS SEEN THAT AN EQUAL AMOUNT OF RS.28,00,000/- WAS DEPOSITED IN CASH IN THE SAID BANK ACCOUNT ON THE PRECEDING DAY I.E. ON 11.03.2013. THEREFORE, THE SOURCE OF AMOUNT OF CASH DEPOSIT OF RS.28,00,000/- REMAINED UNEXPLAINED AND WAS ADDED TO THE ASSESSEES TOTAL INCOME AS UNEXPLAINED INVESTMENT U/S 69 OF THE INCOME TAX ACT , 1961. 2.2 AGGRIEVED WITH THE ORDER OF THE THEN AO, THE ASSESSEE HAS FILED AN APPEAL BEFORE YOUR GOOD SELF AND SUBMITTED ADDITIONAL EVIDENCE IN THE SHAPE OF COPY OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF M/S PICCADILY AGRO INDUSTRIES LIMITED FOR THE FINANCIAL YEAR 2012-13. ON VERIFICATION OF ASSESSMENT RECORD, IT I S SEEN THAT THE SAME WAS NOT PRODUCED DURING THE ASSESSMENT PROCEEDINGS. DURING REMAND PROCEEDINGS, THE ASSESSEE WAS PROVIDED AN OPPORTUNITY OF BEING HEARD IN SUPPORT OF HIS CLAIM. IN RESPONSE, THE ASSESSEE HAS FILED THE SAME DOCUMENT AS FILED DURIN G APPELLATE PROCEEDINGS BEFORE YOUR GOOD OFFICE. IN T HE PRINCIPLE OF NATURAL JUSTICE, THE SAME MAY BE TAKEN ON RECORD. HOWEVER, THE ADDITION OF RS.3,11,58,000/- WAS MADE ON ACCOUNT OF DISALLOWANCE IN TERMS OF PROVISIONS OF SECTION 40A(3) AND ADDITION OF RS.28,00,000/- WAS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT U/S 69 OF THE I.T. ACT, 1961. 4. IN VIEW OF ABOVE MENTIONED FACTS, THE CASE OF TH E ASSESSEE MAY BE DECIDED ON MERITS. ACCORDINGLY, REPORT IS SUBMITTED FOR YOUR KIND PERUSAL. 6. ON GOING THROUGH THE SAME WE FIND THAT THE AO ME NTIONS ADDITIONAL EVIDENCE ONLY IN THE SHAPE OF COPY OF AC COUNT OF THE ASSESSEE IN THE BOOKS OF M/S PICCADILY AGRO INDUSTR IES LIMITED, ITA NO.94/CHD/2020 A.Y. 2013-14 PAGE 5 OF 10 THE PARTY ALLEGEDLY FROM WHOM THE IMPUGNED PURCHASE S WERE MADE, BUT HE MAKES NO OBSERVATION WITH REGARD TO TH E SAME EXCEPT FOR STATING THAT THE SAME WAS PRODUCED BEFOR E HIM AND MAY BY ADMITTED ON RECORD. HE FURTHER STATES THAT T HE DISALLOWANCE OF THE PURCHASES WERE MADE UNDER THE P ROVISIONS OF SECTION 40A(3) OF THE ACT. THESE ARE ONLY GENERA L /FACTUAL STATEMENTS AND WE FAIL TO UNDERSTAND HOW THE LD.CIT (A) HAS DERIVED FROM THE SAME THAT NOTHING CONTRARY WAS MENTIONED BY THE AO, SO AS TO ALLOW THE CLAIM OF THE ASSESSEE OF THE IMPUGNED PAYMENT OF PURCHASES AS NOT BEING COVERED U/S 40A(3) OF THE ACT. 7. THE LD. DR DURING THE COURSE OF HEARING BEFORE U S FURTHER POINTED OUT THAT THE CONDITIONS UNDER WHICH THE CAS H PAYMENTS FOR EXPENSES ARE ALLOWED ARE PRESCRIBED UNDER RULE 6DD OF THE INCOME TAX RULES, 1962 AND THE ASSESSEES CASE OF T HE PAYMENT BEING GENUINE, AS APPEARS FROM THE ADDITIONAL EVIDE NCE FILED BEING COPY OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THE SELLER, IS NOT COVERED IN SUCH INSTANCES. 8. THE LD.COUNSEL FOR THE ASSESSEE, ON THE OTHER HA ND, RESPONDED BY STATING THAT IT WAS NOT ONLY THE GENUI NENESS OF THE EXPENSES BUT ALSO THE URGENCY OF THE REQUIREME NT FOR PAYMENTS BEING MADE IN CASH WHICH WAS DEMONSTRATED BEFORE THE LD.CIT(A) AND PLEADED AS A GROUND OF ALLOWANCE OF THE ITA NO.94/CHD/2020 A.Y. 2013-14 PAGE 6 OF 10 EXPENSES U/S 40A(3) OF THE ACT. HE DREW OUR ATTENTI ON TO THE SUBMISSIONS MADE BEFORE THE LD.CIT(A), REPRODUCED A T PARA 3.1 OF THE ORDER AS UNDER: 3.1 A. R. SUBMISSIONS:- DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT SUBMITTED THE FOLLOWING :- 1. 'THE LD. A.O. HAD GROSSLY ERRED ON LAW AND ON FACTS IN DISALLOWING THE PAYMENTS MADE TO PURCHASE AMOUNTING TO INR 3,11,58, 000/- IN CASH WITHOUT ISSUING SHOW CAUSE NOTICE AND CONFRONTING T HE ISSUE TO THE APPELLANT FOR THE CIRCUMSTANCES AND THE REASONS FOR CASH PAYMENTS. A. WITH REGARD TO PAYMENTS MADE TO M/S PICCADILLY A GRO INDUSTRIES LIMITED, THE PAYMENTS WERE MADE FOR THE PURCHASE OF LIQUOR AND BEYOND DOUBT. THE SAME WAS MADE BY THE ASSESSEE TO PROCURE THE LIQUOR IMMEDIATELY AS THE ASSESSEE HAD TO PAY RS.5. 94 CRORES PLUS RS. 1.67 CR TO THE HARYANA STATE EXCISE FOR LICENSE FEES AND EXCISE DUTY I.E. MORE THAN RS. 2 LAKHS PER DAY . WHICH MEANS EVEN 4-5 DAYS, DELAY COULD HAVE AFFECTED THE BUSINESS OP ERATIONS OF THE ASSESSEE BADLY. THE ASSESSEE BEING THE FIRST YEAR I N TRADE HAVE NO SUCH CREDIBILITY WITH THE SUPPLIERS AND THEREFORE H AD TO WORK ON WHIMS AND WILLS OF SUPPLIER TO AVOID THE COST BURDEN AND TO EARN SOME PROFIT AS DELAY IN PROCUREMENT WOULD HAVE ADVERSE EFFECT ON BUSINESS. THE SUPPLIER HAS REFUSED TO SUPPLY THE GOODS, UNLESS TH E AMOUNT IS RECEIVED BY HIM IN HIS BANK ACCOUNT FURTHER ASSESSEE HAD DEP OSITED EVERY PAYMENT TO PICCADILLY IN ITS BANK ACCOUNT. B. SINCE THE SAME WAS CONTROLLED BY THE INCOME TAX DEPARTMENT AS WELL, THE PURCHASE OF SAME IS DULY REFLECTED IN THE FORM 26AS OF ASSESSEE, WHERE M/S PICCADILLY AGRO INDUSTRIES LIMI TED HAVE CONFIRMED THE PURCHASE TO PROVE THE GENUINENESS OF THE TRANSA CTIONS. C. THAT LD. A.O. IN PARA 3.1 AND PARA 3.2 O F HIS ORDER HAVE ALSO CONFIRMED THE GENUINENESS OF PURCHASE. FU RTHER HE HAD NEVER OPINED ON THE GENUINENESS OF THE TRANSACT ION AND WERE BEYOND DOUBT CONFIRMED IN VERIFICATION TO 26AS . D. THAT DISALLOWANCE OF THE ENTIRE CASH PURCHASE RE SULTS IN ABNORMAL TRADING PROFIT FOR THE ASSESSEE WHICH I T COULD NEVER EARN. THERE HAD NEVER BEEN ANY TAX EVASION WI TH THESE TRANSACTIONS. THE PRIMARY OBJECTIVE OF ENACTING SEC TION 40A(3) WAS TO PUTT A CHECK ON TRADING TRANSACTIONS WITH A MIND TO EVADE THE LIABILITY TO TAX ON INCOME EARNED OUT OF SUCH TRANSACTION AND THE PROVISION WAS DIRECTLY RELATED TO CURB THE EVASION OF TAX. THEREFORE, THE CONSEQUENCE, WHICH W ERE TO BEFALL ON ACCOUNT OF NON-OBSERVATION OF SECTION 40A (3) MUST HAVE NEXUS TO THE FAILURE OF SUCH OBJECT THE CBDT C IRCULAR NO. 6P DATED 06/07/1968 REITERATED THIS VIEW THAT 'THIS PROVISION IS DESIGNED TO COUNTER EVASION OF TAX THR OUGH CLAIMS ITA NO.94/CHD/2020 A.Y. 2013-14 PAGE 7 OF 10 FOR EXPENDITURE SHOWN TO HAVE BEEN INCURRED IN CASH WITH A VIEW TO FRUSTRATING PROPER INVESTIGATION BY THE DEPARTME NT AS TO THE IDENTITY OF THE PAYEE AND THE REASONABLENESS OF THE PAYMENT.' 2. THE ASSESSEE FURTHER RELIES ON THE FOLLOWING PRECEDENTS : A. ATTAR SINGH GURMUKH SINGH VS ITO REPORTED IN (1991) 191 ITR 667 (SC) IN PARA 3.3.4. INTER-ALIA STATES 'THE TERMS OF SECT ION 40A(3) ARE NOT ABSOLUTE. CONSIDERATION OF BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS ARE NOT EXCLUDED. GENUINE AND BONA FIDE TRA NSACTIONS ARE NOT TAKEN OUT OF THE, SWEEP OF THE SECTION. IT IS OPEN TO THE ASSESSEE TO FURNISH TO THE SATISFACTION OF THE ASSESSING OFFICE R THE CIRCUMSTANCES UNDER WHICH THE PAYMENT IN THE MANNER PRESCRIBED IN SECTION 40A(3) WAS NOT PRACTICABLE OR WOULD HAVE CAUSED GENUINE DIFFICULTY TO THE PAYEE. IT IS ALSO OPEN TO THE ASSESSEE TO IDENTIFY THE PERSON WHO HAS RECEIVED THE CASH PAYMENT. RULE 6DD PROVIDES THAT A N ASSESSEE CAN BE EXEMPTED FROM THE REQUIREMENT OF PAYMENT BY A CROSS ED-CHEQUE OR CROSSED-BANK DRAFT IN THE CIRCUMSTANCES SPECIFIED U NDER THE RULE. IT WILL BE CLEAR FROM THE PROVISIONS OF SECTION 40A(3) AND RULE 6DD THAT THEY ARE INTENDED TO REGULATE BUSINESS TRANSACTIONS AND TO PREVENT THE USE OF UNACCOUNTED MONEY OR REDUCE THE CHANCES TO USE B LACK MONEY FOR BUSINESS TRANSACTIONS.' B. CIT VS CPL TANNERY REPORTED IN (2009) 318 ITR 179 (CAL) THE CONTENTION OF THE ASSESSEE THAT HE PURCHASED GO ODS FROM SUPPLIERS WHO ARE PRODUCERS OF HIDES AND SKINS, HAS NOT BEEN REFUTED EITHER BY THE AO OR BY THE CIT(A). THE SECOND CONTENTION OF T HE ASSESSEE THAT OWING TO BUSINESS EXPEDIENCY, OBLIGATION AND EXIGEN CY, THE ASSESSEE HAD TO MAKE CASH PAYMENT FOR PURCHASE OF GOODS SO E SSENTIAL FOR CARRYING ON OF HIS BUSINESS, WAS ALSO NOT DISPUTED BY THE AO. THE GENUINITY OF TRANSACTIONS, RATE OF GROSS PROFIT OR THE FACT THAT THE BONAFIDE OF THE ASSESSEE THAT PAYMENTS ARE MADE TO M/S IFB AGRO INDUSTRIES LTD FOR PURCHASE OF COUNTRY SPIRIT ARE A LSO NEITHER DOUBTED NOR DISPUTED BY THE AO. ON THE BASIS OF THESE FACTS IT IS NOT JUSTIFIED ON THE PART OF THE AO TO DISALLOW 20% OF THE PAYMENTS MADE U/S 40A(3) IN THE PROCESS OF ASSESSMENT. WE, THEREFORE, DELETE TH E ADDITION OF RS.17,90,571/-AND GROUND NO.1 IS DECIDED IN FAVOUR OF THE ASSESSEE. C. A NUPAM TELE SERVICES VS ITO IN (2014) 43 TAXMANN.COM 199 (GUI) 'SECTION 40A(3) OF THE INCOME-TAX ACT, 1961 READ WI TH RULE 6DD OF THE INCOME-TAX RULES, 1962 BUSINESS DISALLOWANCE - CA SH PAYMENT EXCEEDING PRESCRIBED LIMIT RULE 6DD(J) ASSESSMENT Y EAR 2006-07 ASSESSEE WAS WORKING AS AN AGENT OF TATA TELE SERVI CES LIMITED FOR DISTRIBUTING MOBILE CARDS AND RECHARGE VOUCHERS -PR INCIPAL COMPANY TATA INSISTED THAT CHEQUE PAYMENT FROM ASSESSEE'S C O-OPERATIVE BANK WOULD NOT DO, SINCE REALIZATION TOOK LONGER TIME AN D SUCH PAYMENTS SHOULD BE MADE ONLY IN CASH IN THEIR BANK ACCOUNT - IF ASSESSEE WOULD NOT MAKE CASH PAYMENT AND MAKE CHEQUE PAYMENTS ALON E, IT WOULD HAVE RECEIVED RECHARGE VOUCHERS DELAYED BY 4/5 DAYS WHICH WOULD ITA NO.94/CHD/2020 A.Y. 2013-14 PAGE 8 OF 10 SEVERELY AFFECT ITS BUSINESS OPERATION - ASSESSEE, THEREFORE, MADE CASH PAYMENT - WHETHER IN VIEW OF ABOVE, NO DISALLOWANCE UNDER SECTION 40A (3) WAS TO BE MADE IN RESPECT OF PAYMENT MADE T O PRINCIPAL - HELD, YES [PARAS 21 TO 23] [IN FAVOUR OF THE ASSESSEE]'' D . SRI LAXMI SATVANARAVANA OIL MILL VS CIT REP ORTED IN (2014 ) 49 TAXMANN.COM 363 (ANDHRAPRADESH HIGH COURT) 'SECTION 40A(3) OF THE INCOME-TAX ACT, 1961, READ W ITH RULE 6DD OF THE INCOME-TAX RULES, 1962- BUSINESS DISALLOWANCE - CAS H PAYMENT EXCEEDING PRESCRIBED LIMIT (RULE 6DD) - ASSESSEE MA DE CERTAIN PAYMENT OF PURCHASE OF GROUNDNUT IN CASH EXCEEDING PRESCRIB ED LIMIT - ASSESSEE SUBMITTED THAT HE MADE PAYMENT IN CASH BECAUSE SELL ER INSISTED ON THAT AND ALSO GAVE INCENTIVES AND DISCOUNTS - FURTH ER, SELLER ALSO ISSUED CERTIFICATE IN SUPPORT OF THIS - WHETHER SINCE ASSE SSEE HAD PLACED PROOF OF PAYMENT OF CONSIDERATION FOR ITS TRANSACTION TO SELLER, AND LATER ADMITTED PAYMENT AND THERE WAS NO DOUBT ABOUT GENUI NENESS OF PAYMENT, NO DISALLOWANCE COULD BE MADE UNDER SECTIO N 40A(3) - HELD, YES [PARA 23 ] [IN FAVOUR OF THE ASSESSEE] E. CIT VS SMT.SHELLY PASSI REPORTED IN (013) 350 ITR 2 27 (P&H) ITA NO. 148/K/2015, ITA NOS. 185 & 186/KOL/2014 RAMNAGA R PACHWAI & (S) C.S. SHOP, AY2007-08,2008-09AND2010-1 1 IN THIS CASE, THE COURT UPHELD THE VIEW OF THE TRI BUNAL IN NOT APPLYING SECTION 40A(3) OF THE ACT TO THE CASH PAYMENTS WHEN ULTIMATELY SUCH AMOUNTS WERE DEPOSITED IN THE BANK BY THE PAYEE. 9. REFERRING TO THE SAME HE POINTED OUT THAT BESIDE S DEMONSTRATING THE FACT OF URGENCY FOR MAKING THE PA YMENT IN CASH THE ASSESSEE HAD ALSO REFERRED TO VARIOUS JUDG MENTS OF COURTS WHEREIN IN IDENTICAL SITUATION IT WAS HELD T HAT NO DISALLOWANCE U/S 40A(3) OF THE ACT WAS WARRANTED. 10. AT THIS JUNCTURE IT WAS POINTED OUT TO BOTH THE PARTIES THAT THE FINDINGS OF THE LD.CIT(A) MAKE NO MENTION OF THE PLEADINGS OF THE LD.COUNSEL FOR THE ASSESSEE WITH R EGARD TO THE URGENCY/BUSINESS EXIGENCY FOR MAKING THE PAYMENT IN CASH, NOR REFER TO ANY EVIDENCE FILED BY THE ASSESSEE DEM ONSTRATING ANY SUCH FACT. AS NOTED BY US ABOVE, THE ORDER OF THE LD.CIT(A) IS CRYPTIC, LACKS REASONING, MENTIONING NEITHER THE FACT NOR THE ITA NO.94/CHD/2020 A.Y. 2013-14 PAGE 9 OF 10 LEGAL POSITION REGARDING THE ISSUE. IN VIEW OF THE SAME, IT WAS POINTED OUT TO BOTH THE PARTIES, THAT IT WOULD BE I N THE FITNESS OF MATTER TO REFER THE ISSUE BACK TO THE COMMISSION ER OF INCOME TAX FOR PASSING A REASONED ORDER. BOTH THE PARTIES AGREED TO THE SAME. 11. IN VIEW OF THE ABOVE, WE RESTORE THE ISSUE BACK TO THE LD.CIT(A) DIRECTING HIM ADJUDICATE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER EXAMINING AND CONSIDERING ALL FACTS AND JURISPRUDENCE RELATING TO THE ISSUE. THE LD.CIT (A) IS DIRECTED TO PASS A WELL REASONED AND SPEAKING ORDER . NEEDLESS TO ADD THE ASSESSEE BE GIVEN DUE OPPORTUNITY OF HEA RING AND IS FREE TO ADDUCE ALL EVIDENCES IN SUPPORT OF HIS SUB MISSIONS. 12. IN THE RESULT, THE APPEAL OF THE REVENUE, THERE FORE, STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 9 TH FEBRUARY, 2021. SD/- SD/- (R.L. NEGI) (ANNAPURNA GUPTA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER DATED: 09 TH FEBRUARY, 2021 * * &)*+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) ITA NO.94/CHD/2020 A.Y. 2013-14 PAGE 10 OF 10 5. +./0 , $0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35# / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR