SHREE RAM CARGO PRIVATE LIMITED,PUNE V. .INCOME TAX OFFICER, WARD 6(5), PUNE, PMT BUILDING, SHANKAR SHET ROAD, PUNE

ITA 1568/PUN/2024

AI Insights

The case involves Shree Ram Cargo Private Limited, which appealed against the disallowance of Rs.19,83,621 by the Assessing Officer (AO) under section 40A(3) of the Income Tax Act, 1961, for alleged cash payments exceeding the threshold limit of Rs.35,000 for hiring goods carriages. The AO's disallowance was upheld by the CIT(A)/NFAC, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal examined the details of the transactions and found that the payments, although made on a single day, were for different transactions and thus each did not exceed the threshold limit individually, leading to the decision in favor of the assessee.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 24725 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Other Referred Cases: M/s. Excel Engineers Vs. JCIT, Attar Singh Gurmukh Singh vs ITO, CIT vs CPL Tannery, CIT vs Crescent Export Syndicate, Anupam Teleservices vs ITO, Sri Laxmi Satyanarayana Oil Mill vs CIT, Raja & Co vs DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR KESHARI
• Assessee Lawyers: NIKHIL MUTHA
• Keywords: Set aside
• Section: 143(2); 43; 40A(3); 191

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1568/PUN/2024 \u000bनधा\u000fरण वष\u000f / Assessment Year : 2015-16 Shree Ram Cargo Private Limited, 3-A & B, Archies Court, Shankar Shet Road, Pune 411 037 Maharashtra PAN : AALCS3844A Vs. ITO, Ward-6(5), Pune Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : This appeal filed by the assessee pertaining to the Assessment Year (in short \"AY\") 2015-16 is directed against the order passed u/s.250 of the Income Tax Act, 1961 [in short “the Act\"] by the National Faceless Appeal Centre, Delhi [ in short “NFAC”] dated 28.05.2024 arising out of the Assessment order passed u/s.143(3) of the Act, dated 29.12.2017. Assessee by : Shri Nikhil Mutha Revenue by : Shri Ajay Kumar Keshari Date of hearing : 11.12.2024 Date of pronouncement : 16.12.2024 ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 2 2. The only grievance of the assessee is that the Ld.CIT(A)/NFAC erred in upholding the disallowance of Rs.19,83,621/- made by the Assessing Officer (AO) invoking section 40A(3) of the Act for the alleged cash payments made for plying, hiring or leasing goods carriages exceeding threshold limit of Rs.35,000/-. 3. Facts in brief are that the assessee is a Private Limited company engaged in the business of Transportation /Logistics. Income of Rs.77,67,000/- was declared in the e-return for A.Y. 2015-16 furnished on 28.09.2015. The case was selected for scrutiny followed by valid issue of notices u/s.143(2)/142(1) to which necessary compliance was made by assessee. So far as the issue raised in the instant appeal is concerned, it is noticed by the AO while examining the details of freight payment that certain payments made to the Truck owners towards hiring goods carriages exceeded Rs.35,000/- per day which in view of the AO resulted in contravention of provisions of section 40A(3) of the Act. It was contended by the assessee that disallowance is attracted for the single transaction exceeding Rs.35,000/- and that the case of assessee is that payments have been made to the Truck owners during a single day but for each transaction the limit of Rs.35,000/- was not crossed. However, the AO has ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 3 not satisfied and he made the disallowance u/s.40A(3) of the Act at Rs.19,83,621/-. 4. The assessee challenged the said disallowance before the ld.CIT(A)/NFAC but failed to succeed. The ld.CIT(A)/NFAC dismissed the grounds raised by the assessee on the said issue observing as follows : “6. Decision: 6.1 The appellant vide its appeal has assailed the AO for making an addition of Rs.59,86,921/- in its returned income by invoking the provisions of section 40A (3). 6.1.1 Brief facts of the case are that the appellant company had filed its return of income for A.Y. 2015-16 on 28.9.2015 declaring a total income of Rs.77,67,000/- The case of the appellant was selected for scrutiny manually and notice u/s 143(2) was issued to the appellant. The appellant is engaged in the business of transportation and hires trucks from the market and lifts goods from the consignor and send it to consignee. During the assessment proceedings the AO examined the cash book of the appellant and observed that the appellant was making freight payments in a single day which were violative of the provisions of section 40 A (3) of the Income Tax Act. The total of such payments paid during the year was Rs.19,83,621/-. The AO issued a SCN dated 8.12.2017 to the appellant asking as to why the Rs.19,83.621/- should not be disallowed and added back to the income of the appellant. The appellant submitted its reply which was not accepted by the AO who proceeded with making an addition of Rs. 19,83,621/- to the returned income of the appellant. Secondly the AO observed that the appellant had made payments towards freight expense under the guise of the branch transfer which was also violative of section 40A(3) of the Income Tax Act. The total of such payments was Rs.40,03,300/-. The AO did not accept the contention of the appellant filed on this issue and added back Rs.40,03,300/- by ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 4 stating that the issue has already been decided in the favour of the department by the CIT(A) Pune in the case of the appellant for A.Y. 2013-14. 6.2 The ground of appeal 1 is general in nature hence is not being commented upon. 6.3 The appellant in its ground of appeal 2 has assailed the AO for making the disallowance u/s. 40A(3) without appreciating the fact that the rigours of provisions of section 40A(3) are not applicable to genuine payments. 6.3.1 The appellant in its submission has stated that the provisions of section 40A(3) are not applicable in its case as no adverse finding has been noticed with respect to the genuiness of the transactions in its case either during the survey or during the assessment proceedings. The appellant has also given details of the persons to whom the payments have been made and the appellant has submitted that it is engaged in a business where cash payments are vehemently insisted. The appellant has also relied on catena of judgments in support of its contention. 6.3.2 I have considered the assessment order of the AO and the submission made by the appellant. The contention of the appellant that it does not fall within the ambit of Section 40A(3) is not acceptable as no such exception has been provided for by the section. However w.e.f. 1.10.2009 in case of payment made for plying, hiring or leasing goods carriage disallowance is to be made if the payment made is in excess of Rs.35,000/- otherwise by way of account payee cheque or account payee draft. It is seen that the only relief provided for assesse engaged in the business of plying, hiring or leasing goods carriage is that the limit of cash payment allowed in their case is Rs.35,000/- as compared to the limit of Rs.20,000/- for other assesses. The appellant has relied on the judgments but it is seen that the judgments are not squarely applicable to the facts of the case in hand. 6.3.3 It is seen that in the case of the appellant similar addition was also made in A.Y. 2013-14 and the same has been sustained by the Hon'ble ITAT vide its order ITA No.262/PUN/2018 dated 30.8.2022. In view of the discussion above and the decision of the Hon'ble ITAT in ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 5 the appellant's own case I do not find any force in the ground of appeal raised by the appellant and the addition of Rs.19,83,621/-is sustained. The ground of appeal 2 is dismissed.” 5. Aggrieved assessee is now in appeal before this Tribunal. 6. Ld. Counsel for the assessee apart from placing reliance on various decisions of Coordinate Benches including that of Coordinate Bench, Kolkata in the case of M/s. Excel Engineers Vs. JCIT in ITA No.1588/Kol/2013, dated 25.11.2016 further referred to the written submissions stating that the threshold limit needs to be assessed qua the transaction/expenditure and not qua a particular person and that in its case the AO has given thrust only to the usage of the term “Aggregate of payments made to a person in a day but did not take cognizance of the precondition that it needs to be in respect of a particular expenditure. He also referred to the details furnished in the paper book containing 112 pages with specific chart placed at pages 65 to 67 of the paper book exhibiting the detail of the transaction with particular Truck Number during a day giving bifurcation of the payments that were made in respect of sale invoice/transaction. Reference was also made to various sample vouchers (copies of which are placed in the paper book) to support its contention. ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 6 7. On the other hand, the ld. Departmental Representative (DR) vehemently argued supporting the orders of the AO/CIT(A)/NFAC and referred to some cash vouchers/journal vouchers where amounts mentioned are more than the threshold limit of Rs.35,000/- and the payments against the same has been made to the Truck numbers and there is no reference of any Truck driver. 8. We have heard the rival contentions and perused the record placed before us. The only issue raised by the assessee before us is that the ld.CIT(A)/NFAC erred in confirming the disallowance made u/s.40A(3) of the Act at Rs.19,83,621/-. So far as the genuineness of the expenditure incurred towards plying, hiring/leasing of goods carriage is concerned, the same has not been disputed by the Revenue authorities at any stage. The only reason for the disallowance is that the payment mentioned against the Truck number on a single day on few occasions is more than Rs.35,000/- and for this reason section 40A(3) of the Act has been invoked. Ld. Counsel for the assessee has submitted that the case is squarely covered by the decision of Coordinate Bench in the case of M/s. Excel Engineers Vs. JCIT (supra) and the finding of the Tribunal reads as under : ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 7 “4.6. We have heard the rival submissions and perused the materials available on record including the paper book of the assessee comprising of group summary of purchases vide page 134 of PB Volume I , ledger of purchases (broad area wise) in the books vide pages 135 to 186 of the PB Volume I and details of purchases (area wise) vide pages 187 to 211 of PB Volume I. The facts stated hereinabove remain undisputed and hence the same are not reiterated for the sake of brevity. Admittedly the payments were made to the aforesaid parties in cash by the assessee. It is not in dispute before us that the said suppliers had also duly acknowledged the receipt of monies from the assessee which is also quite evident from the subsequent supplies made by them to the assessee at different sites during the year and also in subsequent year. The ledger accounts also support the contention that the cash payments made have been duly reflected in their accounts. The assessee submitted that the payments were forced to be made in cash for procuring the materials at different sites situated in remote villages as the project is to be executed and completed within 3 to 4 weeks of allotment and that the said suppliers were not willing to supply the materials if the payments were made by cheques and they insisted for payments in cash. It is not in dispute that the supply of materials had happened through out the year at different sites but at each site, the job allotted to the assessee was supposed to be executed within a short duration of 3 to 4 weeks. These facts have not been controverted by the revenue before us. Accordingly the payments were made to the parties in cash by the assessee through his employees who were site in charge / supervisors at various sites and it is not in dispute that the bulk payments were transferred to the employees by the assessee and those employees inturn make payment for purchase of materials as and when needed by making cash payments. It is not in dispute that the individual purchase bill for which payment was made was much below Rs 20,000/- for which expenditure was incurred. All the purchase bills were also produced by the ld AR in his paper book filed. 4.6.1. We find that the Hon’ble Supreme Court had held in the case of Attar Singh Gurmukh Singh vs ITO reported in (1991) 191 ITR 667 (SC) had held as below:- It will be clear from the provisions of section 40A(3) and Rule 6DD that they are intended to regulate the business transactions ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 8 and to prevent the use of unaccounted money or reduce the chances to use black money for business transactions. In interpreting a taxing statute the court cannot be oblivious of the proliferation of black money which is under circulation in the country. Any restraint intended to curb the chances and opportunities to use or create black money should not be regarded as curtailing the freedom of trade or business. It is not in dispute before us that the said suppliers of materials had disclosed these sums in their accounts and assessee had not induced those parties for generation of any black money or unaccounted money. In the instant case, the ld AR argued that the suppliers insisted for payments in cash and not by cheques for supply of materials at distant village destinations where projects were executed by the assessee. It is not in dispute that the employees of the assessee who were site in charge / supervisors situated at different site locations had approached these suppliers who do not know each other and hence the suppliers insisting on cash payments thereon has to be accepted and cannot be doubted / faulted with. It has already been stated that the site in charge / supervisors do not know the fact as to whether the materials were purchased from the same suppliers by different / other site in charge. We also find that the provisions of section 40A(3) of the Act contains a proviso which says as under :- “Provided that no disallowance shall be made and no payment shall be deemed to be the profits and gains of business or profession under sub-section (3) and this sub-section where a payment or aggregate of payments made to a person in a day, otherwise, than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, in such cases and under such circumstances as may be prescribed, having regard to the nature and extent of banking facilities available, considerations of business expediency and other relevant factors.” It could be seen that the consideration of business expediency factors have not been dispensed with in the amended provisions of section 40A(3) of the Act w.e.f. 1.4.09. ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 9 4.6.2. We draw support from the following case laws in support of the aforesaid contentions :- CIT vs CPL Tannery reported in (2009) 318 ITR 179 (Cal) The second contention of the assessee that owing to business expediency, obligation and exigency, the assessee had to make cash payment for purchase of goods so essential 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 producers of hides and skin are also 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 the addition of Rs. 17,90,571/- and ground no.1 is decided in favour of the assessee. CIT vs Crescent Export Syndicate in ITA No. 202 of 2008 dated 30.7.2008 – Calcutta High Court “It also appears that the purchases have been held to be genuine by the learned CIT(Appeal) but the learned CIT(Appeal) has invoked Section 40A(3) for payment exceeding 20,000/- since it is not made by crossed cheque or bank draft but by hearer cheques and has computed the payments falling under provisions to Section 40A(3) for 78,45,580/- and disallowed @20% thereon 15,69,116/-. It is also made clear that without the payment being made by bearer cheque these goods could not have been procured and it would have hampered the supply of goods within the stipulated time. Therefore, the genuineness of the purchase has been accepted by the Id. CIT(Appeal) which has also not been disputed by the department as it appears from the order so passed by the learned Tribunal. It further appears from the assessment order that neither the Assessing Officer nor the CIT(Appeal) has disbelieved the genuineness of the transaction. There was no dispute that the purchases were genuine.\" ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 10 Anupam Teleservices vs ITO reported in (2014) 43 taxmann.com 199 (Guj) “\"Section 40A(3) of the Income-tax Act, 1961, read with rule 600 of the Income-tax Rules, 1962-Business disallowance - Cash payment exceeding prescribed limits (Rule 6DD(j)- Assessment year 2006-07 - Assessee was working as an agent of Tata Tele Services Limited for distributing mobile cards and recharge vouchers - Principal company Tata insisted that cheque payment from assessee's co-operative bank would not do, since realization took longer time and such payments should be made only in cash in their bank account - If assessee would not make cash payment and make cheque payments alone, it would have received recharge vouchers delayed by 415 days which would 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 to principal - Held, yes [ Paras 21 to 23J [ in favour of the assessee.\" Sri Laxmi Satyanarayana Oil Mill vs CIT reported in (2014) 49 taxmann.com 363 (AP) \"Section 40A(3) of the Income-tax Act, 1961, read with Rule 600 of the Income-tax Rules, 1962- Business disallowance - Cash payment exceeding prescribed limit (Rule 600) - Assessee made certain payment of purchase of ground nut in cash exceeding prescribed limit - Assessee submitted that her made payment in cash because seller insisted on that and also gave incentives and discounts - Further, seller also issued certificate in support of this - Whether since assessee had placed proof of payment of consideration for its transaction to seller, and later admitted payment and there was no doubt about genuineness of payment, no disallowance could be made under section 40A(3) - Held, yes [ Para 23J [In favour of the assessee]\" ) 4.6.3. Another argument advanced by the ld AR was that section 40A(3) of the Act uses the word ‘any expenditure’ which only pertains to single invoice and if the single invoice is less than Rs 20,000/-, then the provisions of section 40A(3) of the Act should not be invoked. In ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 11 support of this proposition, he placed reliance on the co-ordinate bench of Cochin Tribunal in the case of Raja & Co vs DCIT in ITA No. 534/Coch/2011 dated 22.3.2013 , wherein the amended provisions of section 40A(3) of the Act w.e.f. 1.4.2009 together with the purpose of the said amendment as explained by CBDT was duly considered as under:- “The purpose of amendment was explained by the CBDT as under:- \"13.1 Clause Ca) of sub-section (3) of section 40A of the Income tax Act, 1961 provides that any expenditure incurred in respect of which payment is made in a sum exceeding Rs.20,000/- otherwise than by an account payee cheque drawn on a bank or by an account payee bank draft, shall not be allowed as a deduction. Clause (b) of sub-section (3) of section 40A also provides for deeming a payment as profits and gains of business or profession if the expenditure is incurred in a particular year but the payment is made in any subsequent year in a sum exceeding Rs.20,000/- otherwise than by an account payee cheque or by an account payee bank draft. However, the provisions of this section are subject to exceptions as provided in rule 600 of the Income tax Rules, 1962. 13.2 Sub-section (3) of section 40A is an anti tax evasion measure. By requiring payments to be made by an account payee instrument, it is possible to verify the genuineness of the transaction. Thereby the risk of evasion is substantially mitigated. Field formations have reported that assessees tend to circumvent the provisions of sub-section (3) of section 40A by splitting a particular high value payment to one person into several cash payments, each below Rs.20,000/-. This splitting is also resorted to for payments made in the course of a single day. The courts have approved such splitting by interpreting the words \"in a sum\" used in the section to mean a single sum thereby applying the limit to each transaction. This interpretation is against the legislative intent and has, consequently, adversely affected the efficacy of this anti-abuse provision. ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 12 13.3 Therefore, the provisions of sub-section (3) of section 40A have been amended providing that the provisions of sub-section (3) shall also be attracted where the aggregate of payments made to a single party otherwise than by an account payee cheque drawn on a bank or account payee draft exceeds twenty thousand rupees in a day. 13.4 Applicability:- This amendment has been made applicable with effect from 1st April 2009 and shall accordingly apply for the assessment year 2009-2010 and subsequent years\" 16. It is pertinent to note here that the rate of disallowance was 20% for the year under consideration, i.e., assessment year 2007-08. The Finance Act, 2007 enhanced the disallowance to 100% w.e.f. 1.4.2008. Again the amendment cited above was brought by Finance Act 2008 w.e.f. 1.4.2009. The Ld CIT(A) has taken the view that the amendment made by Finance Act, 2008 w.e.f.1.4.2009 shall apply to the year under consideration also, as the said amendment is clarificatory in nature. In our view, there are two major differences between the provisions as applicable to the year under consideration and the provisions amended by Finance Act, 2008. (a) As per the provisions of sec. 40A(3) as applicable to the year under consideration, the payments of less than Rs.20,000/- made during the course of a day to a single person is not hit by the said provisions. However, as per the amended provisions, the said provisions shall apply only if the aggregate amount of payments made to single party in a day exceeds Rs.20,000/-. For example, if the value of a bill is Rs.1,00,000/- and an assessee makes five payments of Rs.20,000/- each during the course of a day, then the said payments shall not be hit by the provisions of sec. 40A(3) as applicable to the year under consideration. However, under the amended provisions, they would be hit. However, if an assessee makes payment of Rs.20,000/- in a day and he so makes payments in five days, then such splitting up of payments would not be hit even by amended provisions. ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 13 (b) The rate of disallowance was 20% as per the provisions applicable to the year under consideration and the rate of disallowance is 100% as per the amended provisions. The question that arises is whether the amendment brought out by Finance Act, 2008 w.e.f. 1.4.2009 can be considered as clarificatory in nature so that it shall have retrospective operation? As discussed earlier, the amendment only debars making several payments of less than or equal to Rs.20,000/- in a day to a single person, but does not debar making several payments of less than or equal to Rs.20,000/- on different dates to a single person, meaning thereby, the splitting up of payments during the course of a day to a single person is only debarred. Further, as stated earlier, there is significant variance in the quantum of disallowance to be made for violation of sec. 40A(3) of the Act. We notice that the Ld CIT(A) , though held that the amendment is retrospective in operation, however, has restricted to disallowance only to 20% of the expenditure as per the old provisions., i.e., the Ld CIT(A) has applied the amended provisions only in part. In our view, an amendment cannot have retrospective operation in part. Since the amendment only debars splitting up of payments made to a person during the course of a day and did not debar splitting up in toto and since there is significant variance in the rate of disallowance, in our view, the amendment brought out by Finance Act, 2008 can only be considered as substantive in nature and shall have prospective operation only. 17. The CBDT circular (referred supra) refers to \"a particular high value payment\". The necessity to make payment to a party would arise only after conclusion of a transaction, say a \"purchase\" and the said deal would culminate into rising of a bill/invoice. Hence the term \"high value payment\" apparently refers to the concerned bill/invoice in respect of which the payment is required to be made, meaning thereby, the concerned bill/invoice should also be of a higher value. However, if the value of bill/invoice itself is less than Rs.20,000/-, it cannot be considered as a high value transaction in the context of sec. 40A(3) and hence the payment effected in respect of that kind of bill/invoice cannot be considered as high value payment. ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 14 Accordingly, in our view, if the purchase is effected from a single person by way of several bills/invoices and if the value of each bill/invoice is less than Rs.20,000/-, then payments made to settle each bill/invoice would not be hit by the provisions of sec. 40A(3), as each bill/invoice has to be considered as a separate contract. The question of splitting up of the payment also does not arise in respect of such type of bills/invoices, as the value of each bill is less than Rs.20,000/-. In view of the above, we are unable to agree with the decision of Ld CIT(A) in holding that the purchases effected through several bills/invoices from a person shall also be hit by the provisions of sec. 40A(3) and accordingly set aside the said view of the tax authorities.” 4.6.4. Hence considering the totality of the facts and circumstances and going by the intention of introduction of section 40A(3) of the Act together with its amendments and decided judicial precedents relied upon hereinabove, we hold that no disallowance u/s 40A(3) of the Act is warranted in the facts and circumstances of the case. Accordingly, the Ground No. 3 raised by the assessee is allowed.” 9. Now examining the facts of the instant facts in the light of the decision referred above and also details filed by the assessee in the paper book at pages 65 to 109, we find that although the payment made to the Truck number on a single day is exceeding Rs.35,000/- but the payment includes the payment towards different transactions which can be understood with an example. In the assessment order, the ld. AO has referred that on 04.11.2014 Rs.40,000/- has been paid to Truck No. RJ21GA 8081 in two parts viz., Rs.5,000/- and Rs.35,000/-. Now the details furnished by the assessee indicates that on 04.11.2014 ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 15 Rs.5,000/- was paid towards the balance freight payment of an old sale invoice and Rs.35,000/- was paid as a part payment towards the sale invoice No. SRCPL/13-14/KSR/FRT/21, dated 30.11.2014. There is further payment of Rs.20,750/- on 05.11.2014 and Rs.5,000/- on 19.11.2014 for the said sale invoice dated 30.11.2014. In other words, the advance payment was made on 04.11.2014 then certain more payments on 05.11.2014 and 19.11.2014 and the final invoice was prepared on 30.11.2014. Similar is the situation for the remaining payments which though prima-facie indicate that on a single day the payment in cash to single truck exceeds Rs.35,000/- but when we go into the details of such payment then it shows that the payments are for separate transactions. So first thing is to be seen that there is expenditure and then the payment part comes. The payments in the instant case are on a single day against different expenses booked in the books of account. These details further indicate that for a single transaction cash amount has not been paid exceeding Rs.35,000/- to a particular person in a single day. We are satisfied with the details provided by the assessee and in light of the decision referred above as well as the facts demonstrated before us, we find that there is no violation of section 40A(3) of the Act, therefore, the disallowance ITA No.1568/PUN/2024 Shree Ram Cargo Private Limited 16 deserves to be deleted. Findings of the ld.CIT(A)/NFAC is set aside. Grounds of appeal raised by the assessee are allowed. 10. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 16th day of December, 2024. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 16th December, 2024. Satish आदेश क\u0002 \u0003ितिलिप अ\tेिषत / Copy of the Order forwarded to : 1. अपीलाथ\f / The Appellant. 2. \r\u000eयथ\f / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय \rितिनिध, आयकर अपीलीय अिधकरण, “B” ब\u0013च, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "