SRI DHIREN KUMAR SAHOO,DHENKANAL vs. ITO, DHENKANAL, DHENKANAL

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ITA 167/CTK/2019Status: DisposedITAT Cuttack10 March 2021AY 2014-154 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the Pr. CIT's order setting aside the assessment. However, it directed the Assessing Officer to consider the assessee's contention regarding payments made in multiple transactions, where individual transactions did not exceed the specified limit, before disallowing them under Section 40A(3).

What were the facts?

The Principal CIT invoked revisionary powers under Section 263, finding the Assessing Officer's assessment order erroneous and prejudicial to revenue. This was due to a lack of proper inquiry regarding cash payments exceeding Rs. 20,000 in a single day, contravening Section 40A(3) of the Act.

What were the issues?

Whether the assessment order was erroneous and prejudicial to the revenue due to inadequate inquiry into cash payments exceeding the prescribed limit. The issue also involved the applicability of Section 40A(3) to payments made in multiple transactions.

Which sections of the Income-tax Act were involved?

Section 263,Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: S/SHRI CHANDRA MOHAN GARG & LAXMI PRASAD SAHU

For Appellant: Shri Damodar Pati, AR
For Respondent: Shri M.K.Gautam, CIT DR

This is an appeal filed by the assessee against the order of the Pr.

CIT-2, Bhubaneswar, Bhubaneswar u/s.263 of the Act for the assessment year .2014-15.

2.

Facts in brief are that in this case the assessment u/s.143(3)/147 was completed on 28.3.2016 by the Assessing Officer. Thereafter, Pr. CIT- 2, Bhubaneswar, on perusal of assessment record, found that the Assessing

P a g e 1 | 4 67/CTK/201 9 Assessm ent Y ear : 20 14- 15 Officer has passed the assessment order without making proper enquiry in respect of payment to M/s. Swarna Sarita Jewellery that the assessee has made payment of Rs.17,29,989/- in cash in a day exceeding Rs.20,000/- and to M/s. Minakshi Jeweller pvt Ltd., cash payment of Rs.1,61,409/- in contravention of provisions of section 40A(3) of the Act. However, out of Rs.1,61,409/-, the AO has only disallowed Rs.41,990/- in the assessment order, which makes the assessment erroneous and prejudicial to the interest of the revenue. Therefore, the Pr. CIT set aside the assessment order and restored the matter back to the file of the AO to redo the assessment order after making necessary verification on the points noted by Ld. Pr. CIT.

3.

At the time of hearing, ld A.R. of the assessee submitted that he has no objection in setting aside the order by the pr. CIT-2, Bhubaneswar in directing the AO to redo the assessment but he submitted that the Assessing officer be directed to consider while passing the assessment order in pursuance to the direction of the Pr. CIT that if the assessee has made payment in multiple transaction which is exceeding limit of Rs.20,000/-, the single transaction not exceeding the specified limit should not be added back u/s.40A(3) of the Act.

4.

Replying to above, ld CIT DR supported the order u/s.263 of the Act.

P a g e 2 | 4 67/CTK/201 9 Assessm ent Y ear : 20 14- 15

5.

On careful consideration of the rival submissions, we find that the ld Pr. CIT by virtue of revisionary order u/s.263 directed the AO to pass the fresh assessment order on the ground that while making the assessment order, the AO has not considered the payment made in a single day in contravention of provisions of section 40A(3) of the Act. Before us, the contention of the ld A.R. is that the Assessing Officer while passing the assessment order in pursuance to order u/s.263 of the Act, should consider that if the assessee has made payment in multiple transaction which is exceeding the limit of Rs.20,000/-, the single transaction not exceeding the specified limit should not be disallowed u/s.40A(3) of the Act. Therefore, we uphold the order u/s.263 of the Act with the rider that while making the assessment order, the AO is directed to consider the contention of the assessee as noted above.

6.

In the result, appeal of the assessee is dismissed as indicated above.

Order pronounced on 11/3/2021.

Sd/- sd/-

(Laxmi Prasad Sahu) (Chandra Mohan Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 11 /3/2021 B.K.Parida, SPS (OS)

P a g e 3 | 4 67/CTK/201 9 Assessm ent Y ear : 20 14- 15 Copy of the Order forwarded to : 1. The Appellant : Sri Dhiren Kumar Sahoo, Prop. M/s. Kanchan Jewellery, Meena Bazar, Dhenkanal,

2. The Respondent. Pr. CIT-2, Bhubaneswar 3. The CIT(A)-, Bhubaneswar

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