V BIRD SHIPPING AGENCIES PRIVATE LIMITED ,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1(3)(2), MUMBAI

O R D E R

PER AMARJIT SINGH, JM:

1. The Ld. CIT(A) erred in partly allowing of additions done by Ld. AO u/s 40A(3).”

3. The brief facts of the case are that the assessee filed its return of income on 29.11.2014 declaring total income to the tune of Rs.1,29,89,800/-. The case was selected for scrutiny. Notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The assessee company is engaged in the business of Shipping Logistics & Freight A.Y.2014-15 Forwarders. The AO disallowed the cash expenses in sum of Rs.47,93,959/- on account of this fact that the payment was more than 20,000/- in cash contrary to the provisions of Section 40A(3) and was added to the income of the assessee. The total income of the assessee was assessed to the tune of Rs.1,77,83,760/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who restricted the addition to the extent of Rs.37,92,591/- and allowed the relief in sum of Rs.10,01,365/-. Feeling aggrieved, the assessee has filed the present appeal before us.

4. We have heard the arguments advanced by the Ld. Representative of the parties and perused the record. At the very outset, the Ld. Representative of the assessee has argued that the proper and reasonable opportunity was not given to support the claim which has been declined in view of the provisions of Section 40A(3). It is argued that the 90% of the vouchers/bills/confirmation were given to the AO and thereafter the assessee tried to collect more vouchers in support of the claim but the same was not properly considered, hence, the claim of the assessee is liable to be considered in accordance with law. It is also argued that the nature of the business of the assessee was of the cash flows/cash basis, therefore, reasonability/genuine transaction was liable to be considered in accordance with law and in support of his claim the Ld. Representative of the assessee has placed reliance upon the decision of the Hon’ble High Court of Calcutta in the case of Giridharilal Goenka Vs. CIT (1986) 179 ITR 122 (Cal) and Hon’ble Orissa High Court in the case of CIT Vs. Aloo Supply Co. (1980) 121 ITR 680/3 Taxman 572 (Ori). However, on the other hand, the Ld. Representative of the revenue has strongly relied upon the order passed by the CIT(A) in question. It is also recalled matter by virtue of recalling the order of the Hon’ble ITAT passed on 11.03.2019 in A.Y.2014-15 which the appeal of the assessee was dismissed. Since the assessee was exparte, therefore, the order was recalled by virtue of M.A No. 510/M/2019 decided on 05.02.2020. The bone contention of the Ld. Representative of the assessee is that the reasonable opportunity was not given while deciding the claim of the assessee in view of the provisions of Section 40A(3) of the Act. The assessee has submitted the details before us by virtue of paper book dated 07.01.2021. The details have been furnished at page no. 96 to 98 of the paper book. We are of the view that the details/necessary evidence is liable to be considered at the end of the AO by giving an opportunity was given to the assessee in accordance with law. The AO will consider the above mentioned law i.e. Aloo Supply Co. (supra) and in the case of Giridharilal Goenka (supra). Accordingly, we set aside the finding of the CIT(A) on this issue and restore the issue before the AO to decide the matter of controversy afresh in view of the above said directions. Accordingly, this issue is decided in favour of the assessee against the revenue.