NITHALI RAM SAH,KATIHAR vs. ITO, WARD-KATIHAR, KATIHAR

आयकर अपीलीय अधिकरण, ‘एकल” न्यायपीठ, पटना IN THE INCOME TAX APPELLATE TRIBUNAL, SMC BENCH, PATNA BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER आयकर अपील सं./ITA No.161/PAT/2018 (ननिाारण वर्ा / Assessment Year :2009-2010) Nithali Ram Sah (HUF), Vs. ITO, Ward-Katihar Prop: M/s Nithali Construction, Roshna, Katihar-854117 स्थायी लेखा सं./PAN No. : AADHS 6031 G (अपीलाथी /Appellant) (प्रत्यथी / Respondent) ..

निर्धारिती की ओर से /Assessee by : None राजस्व की ओर से /Revenue by : Shri Supriya Biswas, JCIT-DR सुनवाई की तारीख / Date of Hearing : 16/09/2019 घोषणा की तारीख/ : 18/09/2019 Date of Pronouncement आदेश / O R D E R This appeal is filed by the assessee against the order passed by learned CIT(A), Bhagalpur, dated 14.12.2011 for the assessment year 2009-2010. 2. None appeared on behalf of the assessee even the case was called for second round of hearing. Therefore, I proceeded to dispose off the appeal of the assessee after considering the submissions of ld.DR and the material evidence available on record. 3. The only issue agitated by the assessee is that the CIT(A) has erred in confirming the addition made by the Assessing Officer u/s.40A(3) of the Act. Further in the grounds of appeal, the assessee has submitted that the payments were made to the truck drivers against delivery of goods (coal) at the assessee’s premises at Katihar on the dates when

2 ITA No.161/PAT/2018 there were Sundays and bank holidays, therefore, the transactions are covered under rule 6DD(j) and (k) of the Income Tax Rules 1962. 4. Facts in brief are that assessee is an individual, proprietor of M/s. Nithali Constructions, engaged in the business of manufacturing and trading of the bricks. During the course of assessment proceedings the AO observed that from the 8 bills for purchases of coal pertaining to the year, one particular bill of Rs.1,17,150/- of M/s. Maa Kali Coal Suppliers, Gawahati did not pertain to the year under consideration and hence the same was disallowed and added back to the total income. Thereafter, from the remaining 7 purchase bills, he observed that the payments for purchases were made in cash, in excess of Rs.20,00/- each against 4 bills. Accordingly, the AO disallowed the corresponding amount of Rs.4,13,145/- by invoking the provisions of section 40A(3) of the Act. 5. In appeal, the CIT(A) allowed the ground raised by the assessee with regard to addition of Rs.1,17,150/- subject to verification by the AO, however, upheld the addition made u/s.40A(3) of the Act. Now, the assessee is in further appeal before the Tribunal. 6. None appeared on behalf of the assessee, whereas ld.DR strongly relied on the orders of authorities below. 7. On careful considerations of the above rival submissions of both the parties as well as the orders of both the authorities below, I find that the assessee has paid the amounts of Rs.4,13,145/- on the delivery of goods to the agent of the seller, i.e. the truck driver/owner, however, the goods were received in all the eight occasions on a holiday, therefore, the

3 ITA No.161/PAT/2018 assessee could not made payment by way of any DD or crossed cheque. On being asked by the Assessing Officer, the assessee submitted the entry date after one, two or 8 days after the date of issue of bills. However, the Assessing Officer did not accept the contention of assessee and added the same to the total income of the assessee. Before the CIT(A) the assessee has also reiterated the submissions as was made before the Assessing Officer, however, the CIT(A) observed that there is a considerable time gap between the date of billing and the date of receipt of the goods and upheld the action of Assessing Officer. In the grounds of appeal, the assessee has submitted that the truck owners supplied the coal in the evening and actual date of receipt was one or two days later which falls on either Saturday, Sunday or bank holidays, therefore, the payments made by the assessee falls under the provisions of rule 6DD(j) & (k) of the Income Tax Rules 1962. For the sake of completeness of the order, I would like to reproduce provisions of rule 6DD(j) & (k) of the Income Tax Rules 1962, which read as under :- 6DD. (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; (k) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person; 8. It is clear from the above provisions of rule 6DD(j) & (k) of the Income Tax Rules 1962, that if the payment has been made on a day which the banks were closed either on account of holiday or strike, such payment made by any person to his agent who is required to make payment in cash for goods or service on behalf of such person, no

4 ITA No.161/PAT/2018 disallowance shall be made u/s.40A(3) of the Act. In the present case in hand, the assessee has submitted before both the authorities below that the truck owners supplied the coal in the evening and the actual date of receipt was one or two days later which falls on either Saturday, Sunday or bank holidays. It is also not disputed by both the authorities below in their respective orders that the assessee has not made any payment to the truck drivers against delivery of goods(coal) at the assessee’s premises on any holidays. Therefore, in view of the above observations and the provisions of rule 6DD(j) and (k) of the Income Tax Rules 1962, I am of the considered view that the addition made by the Assessing Officer u/s.40A(3) of the Act and confirmed by the CIT(A) deserves to be deleted and I hold so. Accordingly, the sole ground of appeal of the assessee is allowed. 9. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 18/09/2019.

Sd/- (C.M.GARG) न्यानयक सदस्य / JUDICIAL MEMBER पटना /Patna; दिनांक Dated 18/09/2019 Prakash Kumar Mishra, Sr.P.S.(on tour) आदेश की प्रनिललपप अग्रेपर्ि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant- प्रत्यथी / The Respondent- 2. 3. आयकि आयुक्त(अपील) / The CIT(A), आयकर आयुक्त / CIT 4. निभधगीय प्रनतनिनर्, आयकि अपीलीय अनर्किण, पटना / DR, ITAT, 5. Patna गार्ड फाईल / Guard file. 6. सत्यापपत प्रतत //True Copy// आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अधिकरण, पटना / ITAT, Patna