M/S VIJAYETA BUILDCON PVT. LTD.,JAIPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES ‘B’ JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 980/JP/2018 fu/kZkj.k o"kZ@Assessment Year :2007-08 cuke M/s Vijayeta Buildcon Pvt. Ltd. The ACIT, Vs. B-68, Sterling Ground Floor Central Circle-01, Prithviraj Road, C-Scheme, Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AACCV3035B vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. S. R. Sharma (CA) & Sh. Rajnikant Bhatra (CA) jktLo dh vksj ls@ Revenue by : Sh. B. K. Gupta (CIT) lquokbZ dh rkjh[k@ Date of Hearing : 09/10/2020 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 27/10/2020 vkns'k@ ORDER

PER: VIKRAM SINGH YADAV, A.M.

This is an appeal filed by the assessee against the order of ld. CIT(A)- 4, Jaipur dated 30.08.2016 wherein the assessee has challenged the action of the ld CIT(A) in confirming the addition of Rs 42,50,000/- made by the Assessing Officer under section 40A(3) of the Act pertaining to A.Y 2007-08.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT was served on the assessee company on 05.09.2016. It was further submitted that there was a change in management of the assessee company in year 2014 wherein Sh. Hari Mohan Dangayach and Smt. Kamlesh Dangayach transferred their entire shareholding to Sh. Akshya Gupta and Mrs Anju Gupta. It was further submitted that as per the mutual understanding between the old and new management, it was decided that the subject tax matter, which pertains to year prior to transfer of ownership and management of the assessee company, would be handled by the erstwhile management group. It was further submitted that Sh. Jagdish Narain Khandelwal an employee of the erstwhile management who looks after the income tax matters collected the duly filled Form No. 36 and other papers from the Counsel and he handed over the said papers to his subordinate accountant Sh. Naveli Sharan Mittal to get it signed from new management. However, Sh. Naveli Sharan Mittal after collecting the papers misplaced the same somewhere in bunch of papers and forgot all about the same. The matter came to notice of the current management on 11.07.2018 when an enquiry was made by the Assessing officer regarding payment of outstanding demand and thereafter, the papers were searched including the original appellate order and dully filled up Form 36 and appeal was thereafter filed before the Tribunal. In support, the affidavits of outgoing Director Shri Hari Mohan Dangayach and present director Shri Akshay gupta along with affidavits of Sh. Jagdish Narain Khandelwal and Sh. Naveli Sharan Mittal were placed on record. It was accordingly submitted that the assessee company was prevented by sufficient cause from filing the appeal within the prescribed period due to change of management and given that there is no mala fide involved in delayed filing of the appeal, in the interest of justice, the delay in filing may be condoned and the appeal may be admitted for adjudication on merits. In support, reliance was placed on the Coordinate Bench decision in case of Shri Ram Bharose Sharma vs ITO (ITA no. 2

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT 1066/JP/2016 dated 14.06.2018) wherein delay of 636 days was condoned. Further, reliance was placed on the Hon’ble Supreme Court decision in case of Senior Bhosale Estate (HUF) vs ACIT (Civil appeal no. 6671-6676 of 2010 dated 7.11.2019) wherein delay in filing appeal by 1754 was condoned.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT be handled by the erstwhile management, however, due to change of management and lack of diligence on part of ershwhile employees, the appeal could not be filed. It has been further stated that the matter came to light of the present management on 11.07.2018 when an enquiry was made by the Assessing officer for payment of outstanding demand and thereafter, the appeal papers were prepared and appeal was submitted before the Registry on 20.08.2018 though with a delay of 654 days. We therefore find that there is no culpable negligence or malafide on the part of the assessee company in delayed filing of the present appeal and as soon as it came to know of the old tax matter pertaining to the period prior to change of the management, it took steps and filed the present appeal. Therefore, in the factual matrix of the present case, we find that there exists sufficient and reasonable cause for condoning the delay in filing the present appeal and as held by the Hon’ble Supreme Court, where substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserved to be preferred. Therefore, in exercise of powers under section 253(5) of the Act, we hereby condone the delay in filing the present appeal as we are satisfied that there was sufficient cause for not presenting the appeal within the prescribed time and the appeal is hereby admitted for adjudication on merits.

“That on the facts and in the circumstances of the case the Ld. Assessing Officer has grossly wrong and erred in law in making addition of Rs. 42,50,000/- under section 40A(3) of the I. T. Act, 1961 in assessment made under section 153A r.w.s. 143(3) of the I.T. Act, 1961 in as much as no incriminating material was found during the 4

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT course of search which could suggest any undisclosed income so as to initiate proceedings u/s 153A of the Act.”

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT proceedings, the Assessing Officer observed that the assessee company has purchased certain pieces of land vide six separate registered sale deeds and the sale consideration has been discharged partly in cash. Thereafter, a show cause was issued u/s 40A(3) and after considering the submission of the assessee, 25% of total expenditure incurred in cash amounting to Rs. 42,50,000/- was disallowed invoking the provisions of section 40A(3) of the Act. We therefore find that the impugned assessment order has been passed without any reference to any incriminating material found during the course of search in case of the assessee and thus, no fresh facts are required to be examined nor any findings on facts are required to be recorded in the instant case. Given the existing facts as emanating from the assessment order, the additional ground of appeal where the assessee has challenged the impugned assessment order for want of any incriminating material is therefore purely a legal ground of appeal and even though the same has not been taken before the ld CIT(A), it can be taken up before the Tribunal for the first time as held by the Courts from time to time and is hereby admitted for adjudication.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT was found /seized during the course of search at the business premises of the assessee company indicating any on-money receipt/investment/advances made and any unexplained/overstated expenditure etc. in its books of account pertaining to the year under appeal thus the mode and manner of the additions made in the orders passed u/s 153A deserves to be held bad in law. It was submitted that the reading of provisions of section 153A would reveal that the time limit for issuance of notice u/s 143 (2) stood expired for the year under appeal and therefore, no assessment was pending at the time when search was conducted in this case and therefore additions, if any, to be made via assessment u/s 153A would be restricted to incriminating documents found during the course of search. In other words, no routine additions would be permitted to be made having no nexus with any incriminating documents found during the search. In support, the reliance was placed on the following decisions:- • All Cargo Global Logistic Ltd. Vs. DCIT 137 ITD 287 (Mum)(SB) • CIT vs Kabul Chawla (2016) 380 ITR 573 (Delhi) • Jai Steel (India) vs ACIT 259 CTR (Raj) 281 It was further submitted that the Hon’ble Supreme Court has also dismissed the SLP filed by the Revenue in case of Meeta Gutgutia vs. Pr. CIT (96 Taxmann.com 468).

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT accepting the position taken in case of Meeta Gutgutia and other decisions cited by the ld. AR.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT record that the six registered sale deeds were found and seized during the course of search or the transactions so represented by such sale deeds were not recorded in the books of accounts as on the date of search. Once these transactions are duly recorded in the books of accounts and basis the same, the return of income has been furnished before the date of search, the said transactions were duly disclosed to the department and thus, doesn’t represent any undisclosed transactions so as to constitute incriminating material found during the course of search in case of the assessee. Therefore, the disallowance/addition made by the AO and reassessment completed u/s 153A is undisputedly not based on any incriminating material found or seized during the course of search and seizure action u/s 132 of the Act. Once, the Assessing Officer has completed the reassessment u/s 153A without any reference to the incriminating material found, then no addition can be made to the returned income of the assessee.

“37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the 9

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT

six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.

“22. In the firm opinion of this Court from a plain reading of the provision along with the purpose and purport of the said provision, which is intricately

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT linked with search and requisition under Sections 132 and 132A of the Act, it is apparent that: (a) the assessments or reassessments, which stand abated in terms of II proviso to Section 153A of the Act, the AO acts under his original jurisdiction, for which, assessments have to be made;

(b) regarding other cases, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material and

(c) in absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made.

Though such a claim by the assessee for the first time under Section 153A of the Act is not completed, the case in hand, has to be considered at best similar to a case where in spite of a search and/or requisition, nothing incriminating is found. In such a case though Section 153A of the Act would be triggered and assessment or reassessment to ascertain the total income of the person is required to be done, however, the same would in that case not result in any addition and the assessments passed earlier may have to be reiterated. 23. The reliance placed by the counsel for the appellant on the case of Anil Kumar Bhatia (supra) also does not help the case of the assessee. The relevant extract of the said judgment reads as under:— "19. Under the provisions of Section 153A, as we have already noticed, the Assessing Officer is bound to issue notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. Another significant feature of this Section is that the Assessing Officer is empowered to assess or reassess the "total income" of the aforesaid years. This is a significant departure from the earlier block assessment scheme in which the block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under Section 153A, however, the Assessing Officer has been given the power to assess or reassess the 'total income' of the six assessment years in question in separate assessment orders. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. 11

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT 20. A question may arise as to how this is sought to be achieved where an assessment order had already been passed in respect of all or any of those six assessment years, either under Section 143(1)(a) or Section 143(3) of the Act. If such an order is already in existence, having obviously been passed prior to the initiation of the search/requisition, the Assessing Officer is empowered to reopen those proceedings and reassess the total income, taking note to the undisclosed income, if any, unearthed during the search. For this purpose, the fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub-section (1) of Section 153A opens. The time-limit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT pending on the date of initiation of the search or making requisition "shall abate". Once those proceedings abate, the decks are cleared, for the Assessing Officer to pass assessment orders for each of those six years determining the total income of the assessee which would include both the income declared in the returns, if any, furnished by the assessee as well as the undisclosed income, if any, unearthed during the search or requisition. The position thus emerging is that the search is initiated or requisition is made, they will abate making way for the Assessing Officer to determine the total income of the assessee in which the undisclosed income would also be included, but in case where the assessment or reassessment proceedings have already been completed and assessment orders have been passed determining the assessee's total income and such orders subsisting at the time when the search or the requisition is made, there is no question of any abatement since no proceedings are pending. In this latter situation, the Assessing Officer will reopen the assessments or reassessments already made (without having the need to follow the strict provisions or complying with the strict conditions of Sections 147, 148 and 151) and determine the total income of the assessee. Such determination in the orders passed under Section 153A would be similar to the orders passed in any reassessment, where the total income determined in the original assessment order and the income that escaped assessment are clubbed together and assessed as the total income. In such a case, to reiterate, there is no question of any abatement of the earlier proceedings for the simple reason that no proceedings for assessment or reassessment were pending since they had already culminated in assessment or reassessment orders when the search was initiated or the requisition was made." (Emphasis supplied) 24. The said judgment also in no uncertain terms holds that the reassessment of the total income of the completed assessments have to be made taking note of the undisclosed income, if any, unearthed during the search and the income that escaped assessments are required to be clubbed together with the total income determined in the original assessment and assessed as the total income. The observations made in the judgment contrasting the provisions of determination of undisclosed income under Chapter XIVB with determination of total income under Sections 153A to 153C of the Act have to be read in the context of second proviso only, which deals with the pending assessment/reassessment proceedings. The further observations made in the context of de novo assessment proceedings also have to be read in context that irrespective of the fact whether any incriminating material is found during the course of search, the notice and consequential assessment under Section 153A have to be undertaken.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT 25. The argument of the learned counsel that the AO is also free to disturb income, expenditure or deduction de hors the incriminating material, while making assessment under Section 153A of the Act is also not borne out from the scheme of the said provision which as noticed above is essentially in context of search and/or requisition. The provisions of Sections 153A to 153C cannot be interpreted to be a further innings for the AO and/or assessee beyond provisions of Sections 139 (return of income), 139(5) (revised return of income), 147 (income escaping assessment) and 263 (revision of orders) of the Act. 26. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess' have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents. 27. The Allahabad High Court in Smt. Shaila Agarwal's (supra) has held as under:— "19. The second proviso to Section 153A of the Act, refers to abatement of the pending assessment or re-assessment proceedings. The word 'pending' does not operate any such interpretation, that wherever the appeal against such assessment or reassessment is pending, the same along with assessment or reassessment proceedings is liable to be abated. The principles of interpretation of taxing statutes do not permit the Court to interpret the Second Proviso to Section 153A in a manner that where the assessment or reassessment proceedings are complete, and the matter is pending in appeal in the Tribunal, the entire proceedings will abate. 20. There is another aspect to the matter, namely that the abatement of any proceedings has serious causes and effect in as much as the abatement of the proceedings, takes away all the consequences that arise thereafter. In the present case after deducting bogus gifts in the regular assessment proceedings, the proceedings for penalty were drawn under Section 271(1)(c) of the Act. The material found in the search may 14

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT be a ground for notice and assessment under Section 153A of the Act but that would not efface or terminate all the consequence, which has arisen out of the regular assessment or reassessment resulting into the demand or proceedings of penalty." (Emphasis supplied) The said judgment which essentially deals with second proviso to Section 153A of the Act also supports the conclusion, which we have reached hereinbefore. 28. It has been observed by the Hon'ble Supreme Court in K.P. Varghese v. ITO [1981] 131 ITR 597/7 Taxman 13 that "it is well recognized rule of construction that a statutory provision must be so construed, if possible that absurdity and mischief may be avoided." 29. The argument of the counsel for the appellant if taken to its logical end would mean that even in cases where the appeal arising out of the completed assessment has been decided by the CIT(A), ITAT and the High Court, on a notice issued under Section 153A of the Act, the AO would have power to undo what has been concluded up to the High Court. Any interpretation which leads to such conclusion has to be repelled and/or avoided as held by the Hon'ble Supreme Court in the case of K.P. Varghese (supra). 30. Consequently, it is held that it is not open for the assessee to seek deduction or claim expenditure which has not been claimed in the original assessment, which assessment already stands completed, only because a assessment under Section 153A of the Act in pursuance of search or requisition is required to be made.”

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT “That on the facts and in the circumstances of the case the Ld. CIT(A) is wrong, unjust and has erred in law in confirming invoking of provisions of section 40A(3) of the I.T. Act, 1961 by the assessing officer in respect to payment of Rs. 2,12,50,000/- made by the appellant in cash for purchase of agricultural land hold as stock-in- trade resulting in disallowance and consequent of addition of Rs. 42,50,000/- being 20% of said amount of Rs. 2,12,50,000/- to the income of the appellant.”

Date Area Amount 13-09-2006 2.63 Hectare 3,00,00,000/- 27-09-2006 0.69 Hectare 1,08,00,000/- 11-10-2006 0.78 Hectare 87,90,000/- 11-10-2006 1.04 Hectare 1,15,10,000/- 30-10-2006 0.79 Hectare 89,00,000/- 01-02-2007 0.63 Hectare 71,00,000/-

Date Total amount To whom paid Amount paid in paid cash 13-09-2006 3,00,00,000/- Jangal Ram, Badri Narayan, 1,00,00,000/- Banna Lal and Tija 27-09-2006 1,08,00,000/- Birdhi Chand 38,00,000/-

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT 11-10-2006 87,90,000/- M/s N.R. Buildcom Pvt. Ltd. 27,90,000/- 11-10-2006 1,15,10,000/- M/s N.R. Buildcom Pvt. Ltd. 25,10,000/- 30-10-2006 89,00,000/- Sitaram NIL 01-02-2007 71,00,000/- Govindi Bai 21,50,000/- 2,12,50,000/-

(i) The legislature has laid down out a few conditions, in Rule 6DD of Income-tax Rules, under which no disallowance can be made u/s 40A(3), but the assessee has not put forward any of such condition in its submission. (ii) The assessee has submitted that land has been purchased from farmers who demand payment in cash, but no any such evidence has been furnished by the assessee in support of its submission. (iii) Out of total cash payments, Rs. 53 lacs have been paid in cash to one company M/s. N.R. Buildcom Pvt. Ltd. while the assessee is submitting that cash payments have been made to farmers on their demand. (iv) In the case of Shri Birdhi Chand, part payment has been made by cheque and part payment has been made in cash. Likewise, in the case of Smt. Govindi Bai also, part payment has been made by cheque and part payment has been made in cash. Hence, the submission regarding cash demands of the farmers cannot be accepted.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT (v) The assessee has made expenditure in cash which has become the part of its stock-in-trade which will ultimately be used by the assessee to earn income. (vi) The facts of the case laws narrated by the assessee are different from the facts of this case.

The A.O. accordingly held that assessee has contravened provisions of section 40A(3) and there is no escape through rule 6DD therefore he disallowed 20% part of total expenditure (Rs. 2,12,50,000) incurred in cash amounting to Rs. 42,50,000/- and added the same to total income in the hands of the assessee company. The addition so made has been confirmed by the ld CIT(A) and against the said findings, the assessee company is in appeal.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT Audited accounts submitted herewith that assessee in this previous year neither has any receipt of business assessable u/s 28 of the Act, and so has not claimed any ‘expenditure’ the purchase cost of agricultural land (treated as stock-in-trade at close of year) in the year under consideration but the entire ‘expenditure’ of said stock-in-trade was carried forward to next accounting year as opening stock. This position of facts has been accepted by Ld. A.O. in assessment order as no such receipts of business has been assessed in assessment order. In order to invoke provisions of section 40A(3), the amount of ‘expenditure’ incurred in cash must be claimed as expenditure either while working gross profit or while working net profit. It is where a claim for allowance of expenditure is made in computing business income of the year then there could be any disallowance out of the expenditure. There cannot be disallowance of expenditure only without any claim of allowance of expenditure having been made. The legal view is fully supported with the judgement in case of Saral Motors & General Finance Ltd. Vs. ACIT Cir-2, Meerut (2009) 121 ITD 50 (Delhi) and decision of ITAT, Jaipur Bench, Jaipur in case of Salasar Overseas P. Ltd. vs. ACIT. It is thus submitted that Ld. A.O. has wrongly invoked provisions of Section 40A (3) in case of assessee company.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT purchase land from farmers who are group of persons being relatives or family members wherein some people have Bank Account and others do not have bank account. The group of persons sign sale deeds simultaneously and therefore all person demands payments in cash and colonizer/developer has no choice but to accept their demand if land holdings are to be acquired. The farmers are illiterate and do not sign sale deeds of land sold and present them for registration unless receive payment in cash due to fear that they will be deprived from their land holding soon after signing sale deed and later on account payee cheque or draft may not be got encashed and, therefore, they do not agree to sale their land holdings without receiving payment in cash. The colonizer/developer once starts acquiring land holdings in a particular area, he has to acquire all adjacent lands necessarily as without that a township colony project cannot be brought into existence and in such constrained circumstances, he is not in a position to enforce the term of payment by crossed account payee cheque or drafts. The payments in cash made by assessee company have been accepted as genuine by Ld. A.O. and said payments for purchase of agricultural land from farmers have been made from explained sources of funds which are shown in Balance Sheet of company duly audited by Auditors under Companies Act, 1956. Thus genuineness of payments were established and intention of provisions of section 40A (3) have not been defeated and, therefore provisions of section 40A(3) cannot be invoked in the case of assessee. The reliance is placed on the judgement of jurisdictional High Court in case of Kantilal Purshottam & Co. Vs. CIT (1985) 155 ITR 519 (Raj.). In CIT Vs. Chaudhary & Co. (1996) 217 ITR 431, 433 (All), it was held that where the seller has insisted on cash payment and the payment was genuine disclosing the identity of seller, the provisions of section 40A (3) cannot be invoked. The similar views have been held by various High Courts and various Benches of the Tribunal including the

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT Jaipur Bench which supports the case of assessee. In view of the above legal position, the provisions of section 40A(3) cannot be invoked.

“In view of the above facts and circumstances, we hold that since assessee has not claimed any expenditure, therefore, no disallowance can be made during the year under consideration.”

“In this case also it has been held that where payment has been made in villages, the provisions of section 40A(3) cannot be applied.”

As the facts of the case and position of law are same in the case of assessee company, the issue raised in ground of appeal is fully covered in its favour from said decision in case of Ace India Abodes Ltd. and so ground deserves to be decided in favour of assessee company. It is, therefore, prayed that addition of Rs. 42,50,000/- made u/s 40A(3) in the hands of assessee company may kindly be deleted.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT as per the registered sale deeds are not doubted by the AO, no disallowance could be made. In support, reliance is placed on the decision of Hon’ble Punjab and Haryana High Court in case of Gurdas Garg vs. CIT [2015] 63 taxmann.com 289. It was submitted that the provisions of section 40A(3) have been enacted as one of the measures for countering evasion of tax. The provisions were enacted to enable the assessing authority to ascertain whether the payment was genuine or whether it was out of the income from undisclosed sources. Genuine and bona fide transactions are taken out of the sweep of Section 40A(3).

Date of Amount Name of seller Date of Amount Amt. paid withdrawal withdrawn made from bank 13-09-2006 1,00,00,000/- Jangal Ram, Badri 11.09.2006 1,00,00,000/- Narayan, Banna Lal and Mr. Tija 27-09-2006 38,00,000/- Birdhi Chand 26-09-2006 38,00,000/- 11-10-2006 27,90,000/- N.R. Buildcom P. 11-10-2006 55,00,000/- Ltd.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT 11-10-2006 25,10,000/- M/s N.R. Buildcom P. Ltd. 01-02-2007 21,50,000/- Govind Bai 31-01-2007 22,00,000 Total 2,12,50,000 2,15,00,000/-

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT referring to the individual transactions, it was submitted that two transactions have been executed with M/s N. R. Buildcom Pvt. Ltd and thereafter, the contention regarding demand of payment in cash by the farmers cannot be applied in these two transactions. It was further submitted that the payments have been made on days which were working days and there were no banking holidays or strike on those days, therefore, assessee’s case is also not falling under Rule 6DD. Further, referring to the bank statement furnished by the assessee company, it was submitted that there are two transactions on 11th Oct, 2006 and 31st Jan, 2007 wherein the payments have been shown to be made to Mr. Santosh. It was submitted that it is not clear whose Mr. Santosh is and what linkage, he has with assessee company or with the transactions under consideration. Further, reliance was placed on the decision of AO as well as ld. CIT(A) and submitted that there is no infirmity in the said orders where the disallowance has been made on account of cash payment invoking provisions of section 40A(3) and the same may accordingly be confirmed.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT “8. As to the second question, it may be stated that the word 'expenditure' has not been defined in the Act. It is a word of wide import. Section 40A(3) refers to the expenditure incurred by the assessee in respect of which payment is made. It means all outgoings are brought under the word 'expenditure' for the purpose of the section. The expenditure for purchasing the stock-in-trade is one of such outgoings. The value of the stock-in-trade has to be taken into account while determining the gross profits under section 28 of the Act on principles of commercial accounting. The payments made for purchases would also be covered by the word 'expenditure' and such payments can be disallowed if they are made in cash in the sums exceeding the amount specified under section 40A(3). We have earlier observed that rule 6DD has to be read along with section 40A(3). The rule also contemplates payments made for stock-in-trade and raw materials. This rule is in accordance with the terms of section 40A(3). The rule provides that an assessee can be exempted from the requirements of payment by crossed cheque or a crossed bank draft where the purchases are made of certain agricultural or horticultural commodities or from a village where there is no banking facility. Section 40A(3) is, therefore, attracted to payments made for acquiring stock-in-trade and other materials. This is also the view taken by several High Courts. - Sajowanlal Jaiswal v. CIT [1976] 103 ITR 706 (Ori.), U.P. Hardware Store v. CIT [1976] 104 ITR 664 (All.), Raton Udyog v. 1TO [1977] 109 ITR 1 (AIl), PH. Textiles v. CIT [1980] 121 ITR 237 (Ker.), CIT v. Kishan Chand Maheshwari Dass [1980] 121 ITR 232 (Punj. & Har.), Kanti Lal Purshottam & Co. v. CIT [1985] 155 ITR 519 (Raj.), CIT v. New Light Tin Mfg. Co. [1980] 121 ITR 229 (Punj. & Har.), Fakri Automobiles v. CIT [1986] 160 ITR 504 (Raj.), Venkata Satyanarayana Timber Depot v. CIT [1987] 165 ITR 253 (AP), 25

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT and Akash Films v. CIT [1991] 190 ITR 32 (Kar.). The decisions of the High Courts of Andhra Pradesh, Orissa, Allahabad, Kerala, Karnataka, Punjab & Haryana, Rajasthan and Patna are to the effect that the payments made for purchasing stock-in-trade or raw materials should also be regarded as expenditure for the purpose of section 40A(3). The only discordant note struck on this aspect is by the Gauhati High Court in CIT v. Hardware Exchange [1991] 190 ITR 61. The Gauhati High Court has observed that section 40A(3) applies only to payments made on account of 'expenditure incurred' and the payment made for purchase of stock-in-trade cannot be termed as 'expenditure incurred' since money does not go irretrievably in such cases. We are unable to agree with the view taken by the Gauhati High Court.” 28. Now, coming to other contentions of the ld AR which are centred around the intention of the legislature behind introduction of section 40A(3), genuine and bonafide transactions not covered within the sweep of section 40A(3) and exceptions provided in Rule 6DD are not exhaustive and various authorities quoted in support thereof, this Bench had an occasion to examine the same at length in case of M/s A Royal Daga Arts vs ITO Ward-2(2), Jaipur (supra) in light of decision of the Hon’ble Supreme Court in case of Attar Singh Gurmukh Singh vs. ITO and the decisions of various High Courts including the decisions of the jurisdictional High Court and the relevant findings reads as under: “18. We have heard the rival contentions and perused the material available on record. It would be relevant to refer to the provisions of section 40A(3) of the Act which reads as under: “(3) Where the assessee incurs any expenditure in respect of which 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

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT draft exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure.

(3A) Where an allowance has been made in the assessment for any year in respect of any liability incurred by the assessee for any expenditure and subsequently during any previous year (hereinafter referred to as subsequent year) the assessee makes payment in respect thereof, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, the payment so made shall be deemed to be the profits and gains of business or profession and accordingly chargeable to income-tax as income of the subsequent year if the payment or aggregate of payments made to a person in a day, exceeds twenty thousand rupees: 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 : Provided further that in the case of payment made for plying, hiring or leasing goods carriages, the provisions of sub-sections (3) and (3A) shall have effect as if for the words "twenty thousand rupees", the words "thirty- five thousand rupees" had been substituted. (4) Notwithstanding anything contained in any other law for the time being in force or in any contract, where any payment in respect of any expenditure has to be made by an account payee cheque drawn on a bank or account payee bank draft in order that such expenditure may not be disallowed as a deduction under sub-section (3), then the payment may be made by such 27

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT cheque or draft; and where the payment is so made or tendered, no person shall be allowed to raise, in any suit or other proceeding, a plea based on the ground that the payment was not made or tendered in cash or in any other manner.”

“6. As to the validity of section 40A(3), it was urged that if the price of the purchased material is not allowed to be adjusted against the sale price of the material sold for want of proof of payment by a crossed cheque or crossed bank draft, then the income-tax levied will not be on the income but it will be on an assumed income. It is said that the provision authorizing levy 28

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT tax on an assumed income would be a restriction on the right to carry on the business, besides being arbitrary.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT payment was genuine and whether it was out of the income from disclosed sources. In interpreting a taxing statute the Court cannot be oblivious of the proliferation of black-money which is under circulation in our 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.”

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT provides for the exceptional or unavoidable circumstances and the fact that the payment in the manner aforesaid was not practical or would have caused genuine difficulty to the payee and furnishing the necessary evidence to the satisfaction of the Assessing Officer as to the genuineness of the payments and the identity of the payee has held that:

“The terms of section 40A(3) are not absolute. Consideration of business expediency and other relevant factors are not excluded. The genuine and bona fide transactions are not taken out of the sweep of the section. It is open to the assessee to furnish to the satisfaction of the Assessing Officer 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 an assessee can be exempted from the requirement of payment by a crossed cheque or crossed bank draft in the circumstances specified under the rule.”

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT legislation in form of Income Tax Rules when the parent legislation in form of section 40A(3) to which such delegated legislation is subservient has been retained in its entirety. Alternatively, can it be said that what has been prescribed as exceptional circumstances in Rule 6DD as amended are exhaustive enough and which visualizes all kinds and nature of business expediency in all possible situations.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT the satisfaction of the Assessing officer whereby genuine business expenditure should not suffer disallowance.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT CIT(A) held that such exceptional circumstances did exist. However, the findings of the ld. CIT(A) were reversed by the Tribunal and the matter came up for consideration before the Hon’ble High Court.

“……Apparently, this provision was directly related to curb the evasion of tax and inculcating the banking habits. Therefore, the consequences, which were to befall on account of non-observation of sub-section (3) of section 40A must have nexus to the failure of such object. Therefore the genuineness of the transactions and it being free from vice of any device of evasion of tax is relevant consideration which has been overlooked by the Tribunal. 34

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT nexus to the failure of such object. Therefore the genuineness of the transactions and it being free from vice of any device of evasion of tax is relevant consideration and which should be examined before invoking the rigours of section 40A(3) of the Act.

“17. Rule 6DD of the IT Rules, 1962 provides for situations under which disallowance under s. 40A(3) shall not be made and no payment shall be deemed to be the profits and gains of business or profession under the said section. Amongst the various clauses, cl. (j) which is relevant, read as under:

(j) where the payment was required to be made on a day on which the banks were closed either on account of holiday or strike;

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT 40A(3) must not be read in isolation or to the exclusion of r. 6DD. The section must be read along with the rule. If read together, it will be clear that the provisions are not intended to restrict the business activities. There is no restriction on the assessee in his trading activities. Sec. 40A(3) only empowers the A.O. to disallow the deduction claimed as expenditure in respect of which payment is not made by crossed cheque or crossed bank draft. The payment by crossed cheque or crossed bank draft is insisted on to enable the assessing authority to ascertain whether the payment was genuine or whether it was out of the income from undisclosed sources, The terms of s. 40A(3) are not absolute. Considerations of business expediency and other relevant factors are not excluded. Genuine and bona fide transactions are not taken out of the sweep of the section. It is open to the assessee to furnish to the satisfaction of the A.O. the circumstances under which the payment in the manner prescribed in s. 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 an assessee can be exempted from the requirement of payment by a crossed cheque or crossed bank draft in the circumstances specified under the rule. It will be clear from the provisions of s. 40A(3) and r. 6DD that they are intended to regulate business transactions and to prevent the use of unaccounted money or reduce the chances to use black money for business transactions:”

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT 21. In the present case, neither the genuineness of the payment nor the identity of the payee were in any case doubted. These were the conclusions on facts drawn by the CIT(A). The Tribunal also did not disturb such facts but relied solely on r. 6dd(j) of the rules to hold that since the case of the assessee did not fall under the said exclusion clause nor was covered under any of the clauses of r. 6DD, consequences envisaged in s. 40A(3) of the Act must follow.

(a) The paramount consideration of section 40A(3) is to curb and reduce the possibilities of black money transactions. As held by the Supreme Court in Attar Singh Gurmukh Singh (supra), section 40A(3) of the Act does not eliminate considerations of business expediencies.

(b) In the present case, the appellant assessee was compelled to make cash payments on account of peculiar situation. Such situation was as follow-

(i) the principal company, to which the assessee was a distributor, insisted that cheque payment from a co-operative bank would not do, since the realization takes a longer time;

(ii) the assessee was, therefore, required to make cash payments only;

(iii) Tata Tele Services Ltd. assured the assessee that such amount shall be deposited in their bank account on behalf of the assessee;

(iv) It is not disputed that the Tata Tele Services Ltd. did not act on such promise;

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT (v) if the assessee had not made cash payment and relied on cheque payments alone, it would have received the recharge vouchers delayed by 4/5 days and thereby severely affecting its business operations.

We would find that the payments between the assessee and the Tata Tele Services Ltd. were genuine. The Tata Tele Services Ltd. had insisted that such payments be made in cash, which Tata Tele Services Ltd. in turn assured and deposited the amount in a bank account. In the facts of the present case, rigors of s. 40A(3) of the Act must be lifted.

“4.5 The genuineness of the transaction as well as the identity of the payee are not disputed. Further, the appellant has explained the business expediency of making the cash payments to both the parties which has not been controverted by the Revenue. Following the decision of Gujarat High Court in case of Anupam Tele Services (supra) and Rajasthan High Court in case of Harshila Chordia (supra), the addition of Rs. 45,738/- under section 40A(3) is deleted.”

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT said decision clearly applies in the instant case. In that case, the facts of the case were that the assessee was engaged in trading in properties and during the course of assessment proceedings, the AO observed that there are transactions where the payments have been made in excess of Rs. 20,000/- in cash which were disallowed u/s 40A(3) of the Act. The Hon’ble High Court held that rule 6DD(j) is not exhaustive of the circumstances in which the proviso to section 40A(3) is applicable and it only illustrative. The Hon’ble High Court refers to the decision of the Hon’ble Rajasthan High Court in case of Smt. Harshila Chordia v. ITO (Supra) and the decision of Hon’ble Supreme Court in case of Attar Singh Gurmukh Singh v. ITO (Supra). The High Court further observed that the ld. CIT(A) has given a finding that the identity of the payee i.e. vendors in respect of land purchase by the appellant was established, the sale deeds were produced, the genuineness thereof was accepted and the amount paid in respect of each of these agreement was satisfied before the Stamp Registration Authority and the transactions were held to be genuine and the bar against the grant of deductions u/s 40A(3) of the Act was not attracted. The Hon’ble High Court further observed that the Tribunal did not upset these findings including as to the genuineness and the correctness of the transactions and it is also important to note that the Tribunal noted the contention on behalf of the appellant that there was a boom in the real estate market and therefore it was necessary, therefore, to conclude the transactions at the earliest and not to postpone them; that the appellant did not know the vendors and obviously therefore, insisted for payment in cash and that as a result thereof, payments had to be made immediately to settle the deals. The Tribunal did not doubt this case. The Tribunal, however, held that the claim for deduction was not sustainable. In view of Section 40A(3) as the payments which were over Rs. 20,000/- were made in cash. The Hon’ble High Court accordingly observed that “the Tribunal has not disbelieved the transactions or the genuineness thereof nor 40

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT has it disbelieved the fact that payments having been made. More importantly, the reasons furnished by the appellant for having made the cash payments, which we have already adverted to, have not been disbelieved. In our view, assuming these reasons to be correct, they clearly make out a case of business expediency.”

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT Court referring to the intent behind introduction of section 40A(3) and catena of decisions right from Attar Singh Gurmukh Singh, Smt. Harshila Chordia, Gurdas Garg, Anupam Tele Services referred supra has decided the issue in favour of the assessee and against the department.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT

sale deed furnished, held that the assessee had made cash payments regularly and no specific circumstances have been brought to his knowledge that the cash payments were made due to some unavoidable circumstances. It was held by the AO that maximum cash payments were made to persons residing in Jaipur city and in single family, repeated cash payments were made which itself shows that there were no unavoidable circumstances to make cash payments to the sellers. What is therefore relevant to note that the AO has appreciated the necessity of determining the unavoidable circumstances which could have led the assessee to make cash payments. During the course of assessement proceedings, it was submitted by the assessee that the payment for purchase of land has been made in cash because the sellers were new to the assessee and refused to accept the cash. It was submitted that the delay in making the cash payment, it could have lost the land deals. In this regard, the ld AR submitted before us that the assessee had purchased the lands both through cash and cheques. Based on the requirement of the seller, assessee had selected the mode of payment. For the sellers, who had insisted the payments in cash, assessee had withdrawn the cash from bank on the same date of registry and made the payments to seller accordingly. The withdrawals from bank and payments to seller have been tabulated below as per dates below:-

Date Bank Grand Total Cumulative Utilization Net balance Balance

ICICI Bank Yes Bank Date Amount 18,00,000

5-Apr-12 14,50,000 3,50,00 18,00,000 18,00,000 5,07,00

9-Apr-12 - 9,00,000 9,00,000 27,00,000 9-Apr-12 21,93,000 3,34,000

11-Apr-12 - 2,00,000 2,00,000 29,00,000 11-Apr-12 3,73,000 3,34,000

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT

3,34,000 12-Apr-12 - - - 29,00,000 - -

13-Apr-12 - - - 29,00,000 - - 11,97,100

19-Apr-12 - 30,00,000 30,00,000 59,00,000 23-Apr-12 21,36,900 11,57,000

24-Apr-12 30,00,000 25,00,000 55,00,000 1,14,00,000 24-Apr-12 55,40,100 11,57,000

25-Apr-12 - - - 1,14,00,000 - - 11,57,000

30-Apr-12 - - - 1,14,00,000 - - 11,57,000

4-May-12 - - - 1,14,00,000 - - 11,57,000

7-May-12 - - - 1,14,00,000 - - 11,57,000

8-May-12 19,00,000 23,00,000 42,00,000 1,56,00,000 8-May-12 38,55,000 15,02,000

12-May-12 - - - 1,56,00,000 - - 15,02,000

14-May-12 - - - 1,56,00,000 - - 15,02,000

15-May-12 - - - 1,56,00,000 - - 15,02,000

16-May-12 - 15,00,000 15,00,000 1,71,00,000 - - 30,02,000

17-May-12 - 15,00,000 15,00,000 1,86,00,000 17-May-12 30,69,000 14,33,000

Total 63,50,000 1,42,50,000 1,86,00,000 1,71,67,000

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT explained sources, through the registered document and as a disclosed transaction.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT the persons from whom the various plots of land have been purchased and source of cash payments as withdrawals from the assessee’s bank account has been established. The genuineness of the transaction has been established as evidenced by the registered sale deeds and lastly, the test of business expediency has been met in the instant case. Further, as held by the Hon’ble Rajasthan High Court in case of Harshila Chordia (supra), the consequences, which were to befall on account of non-observation of sub- section (3) of section 40A must have nexus to the failure of such object. Therefore the genuineness of the transactions and it being free from vice of any device of evasion of tax is relevant consideration. The intent and the purpose for which section 40A(3) has been brought on the statute books has been clearly satisfied in the instant case. Therefore, being a case of genuine business transaction, no disallowance is called for by invoking the provisions of section 40A(3) of the Act.”

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT of such object. Therefore the genuineness of the transactions and it being free from vice of any device of evasion of tax is relevant consideration for which section 40A(3) has been brought on the statute books and which has been satisfied in the instant case. Similar view has been taken by the Hon'ble Rajasthan High Court in case of CIT vs Solutions reported in 80 Taxmann.com 246 wherein it was held as under:

“11. The Appellate Authorities have relied upon the judgment rendered in the case of Attar Singh Gurmukh Singh v. ITO [1991] 191 ITR 667/59 Taxman 11 (SC), where the hon'ble apex court has observed as under (page 673) : "The terms of section 40A(3) are not absolute. Consideration of business expediency and other relevant factors are not excluded. Genuine and bona fide transactions are not taken out of the sweep of the section. It is open to the assessee to furnish to the satisfaction of the Assessing Officer 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 an assessee can be exempted from the requirement of payment by a crossed cheque or crossed bank draft in the circumstances specified under 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 black money for business transactions." 12. The aforesaid observation does apply in the instant case. The Assessing Officer on the facts noticed has been unable to make out a case of involvement of unaccounted money.

ITA No. 980/JP/2018 M/s Vijayeta Buildcon Pvt. Ltd. Vs. ACIT 13.It is also a finding of fact recorded by the Commissioner of Income- tax (Appeals) that copies of the ledger accounts were produced before the Assessing Officer who has not found any discrepancy in such books of account and no unaccounted transaction has been reported/noticed by the Assessing Officer.”

Order pronounced in the open Court on 27/10/2020.

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 27/10/2020 *Ganesh Kr. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- M/s Vijayeta Buildcon Pvt. Ltd., Jaipur 2. izR;FkhZ@ The Respondent- ACIT, Central Circle-01, Jaipur 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 980/JP/2018} vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत