Loading judgment…
Facts
The appellant, a partnership firm, filed its return of income for AY 2017-18. The Assessing Officer (AO) made additions under sections 143(3) and 40A(3) of the Income Tax Act. The CIT(A) deleted one addition but confirmed the addition under section 40A(3).
Held
The Tribunal considered the submissions regarding cash payments made on Sundays and public holidays, which were claimed to be covered under Rule 6DD exceptions. Both parties agreed to a remand for verification.
Key Issues
Whether the addition made under section 40A(3) was justified, considering cash payments made on Sundays and public holidays that might fall under the exceptions of Rule 6DD.
Sections Cited
143(3), 40A(3), Rule 6DD
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH :: COCHIN
Before: SHRI INTURI RAMA RAO, AM& SHRI RAHUL CHAUDHARY
O R D E R
Per Inturi Rama Rao, AM:
This is an appeal filed by the assessee-firm directed against the order passed by the learned Commissioner of Income Tax (Appeals)/NFAC, Delhi [for short, ‘CIT(A)’], dated 13.06.2025 u/s. 250 of the Income Tax Act, 1961 (for short, 'the Act') for Assessment Year (AY) 2017-18.
Brief facts of the case are that the appellant is a partnership firm, engaged in the business of wholesale and retail dealer in the grocery provisions. The return of income for the A.Y. 2017-18 was filed on 01/11/2017 disclosing total income of Rs. 18,02,670/- Pappadiyil Brothers .Against the said return of income, the assessment was completed by the AO vide order dated 30/12/2019 passed under section 143(3) of the Act at a total income of Rs. 1,00,36,450/-. While doing so, the AO made addition of Rs. 64,98,000/- being the cash deposits in specified bank notes (SBNs) during the demonetization period and also made addition of Rs. 17,35,780/- under section 40A(3) of the Act.
Being aggrieved by the assessment order, an appeal was filed by the appellant before the Ld. CIT(A), who vide impugned order, deleted the addition on account of cash deposits made during demonetization period of Rs. 64,98,000/-, however, confirmed the addition of Rs. 17,35,780/- under section 40A(3) of the Act.
Being aggrieved, the appellant is in appeal before us challenging the findings of Ld.CIT(A)confirming the addition made under section 40A(3) of the Act of Rs. 17,35,780/-. It is submitted that some of the cash payments exceeding Rs. 20,000/- were made on the days falling on Sundays and public holidays and covered by the exceptions enumerated under the provisions of Rule 6DD of the Rules and, therefore matter may be remanded to the file of the AO to re-examine the issue of addition u/s. 40A(3) of the Act.
On the other hand, ld. Sr.DR has no serious objection to remand the matter to the file of AO for fresh examination and verification of the cash payments made on Sundays and public holidays.
Pappadiyil Brothers 6. Considering the rival submissions, we remand the matter back to the file of AO with a direction to exclude the cash payments made on Sundays and public holidays,out of the purview of the provisions of section 40A(3) of the Act, after due verification. Thus, the grounds of appeal raised by the appellant stand partly allowed for statistical purposes.
7. In the result, appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in open Court on 26th August, 2025.