JAI KUMAR,DELHI vs. ITO, WARD- 62(1), NEW DELHI

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ITA 3253/DEL/2018Status: DisposedITAT Delhi14 January 2019AY 2013-145 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the expenses incurred and payments made by the assessee exceeded Rs. 20,000 in each case. Therefore, these expenses were disallowable under Section 40A(3). The CIT(A)'s action of upholding the addition was deemed correct.

What were the facts?

The assessee made cash payments exceeding Rs. 20,000 on various occasions. The Assessing Officer disallowed these expenses under Section 40A(3) of the Income Tax Act, 1961, and added back Rs. 2,48,910 to the assessee's income. The CIT(A) partly allowed the appeal.

What were the issues?

Whether cash payments exceeding Rs. 20,000 made by the assessee are disallowable under Section 40A(3) of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’, NEW DELHI

Before: SH. H.S. SIDHU

This appeal is filed by the Assessee against the Order dated 16.2.2018 passed by the Ld. CIT(A)-27, New Delhi relating to assessment year 2013-14 on the following grounds:- i. Because the action is being challenged on facts and in law, for confirming the addition amounting Rs.

248910/- on account of cash payments made by assessee in excess of Rs. 20000/- u/s. 40A(3) of the Income Tax Act.

Prayer

For any consequential relief and / or legal claim arising out of this appeal and for any addition, 1 deletion, amendment and modification in the grounds of appeal before the disposal of the same in the interest of substantial justice to the assessee.

2.

The brief facts of the case are that assessee is an individual and engaged in providing survey services of sites. In this case the assessee has filed its return of income on 29.9.2013 declaring income of Rs. 36,25,332/- by showing net profit of Rs. 36,25,332/- on gross receipts of Rs. 2,74,09,305/- thereby showing net profit rate of 13.26%. The return of income was processed u/s. 143(1) of the Income Tax Act, 1961 (in short “Act”). Subsequently, the case was selected for scrutiny.

Accordingly, notice u/s. 143(2) of the Act was issued on 29.9.2014 and again notices u/s. 142(1) of the Act alongwith detailed questionnaire were issued to the assessee. In response thereto, the assessee’s representative attended the assessment proceedings from time to time and filed the details. During the course of assessment proceedings, the A.R. of the assessee asked to produce original books of accounts, bills, vouchers, muster-rolls, wage etc. for verification and after verification of the same, the AO observed that as per ledger account filed by the assessee it is found that the assessee has made cash payment on various heads on various occasion as mentioned in the assessment order at page no. 3 amounting to Rs. 2,48,910/- and observed that the cash expenses above Rs. 20,000/- is disallowable u/s. 40A(3) of the Act, hence, he added back the amount of Rs. 2,48,910/- in the hands of the assessee and assessed the income of the assessee at Rs. 47,97,690/- 2 u/s. 143(3) of the Act vide order dated 19.2.2016. Against the assessment order, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 16.2.2018 has partly allowed the appeal of the assessee. Aggrieved with the impugned order, assessee is in appeal before the Tribunal.

3.

During the hearing, Ld. counsel for the assessee has stated that these expenses are in fact for an amount of Rs. 20,000/- as these expenses were incurred by various employees of the assessee on tour on different dates of his travel and are booked in total for a particular tour through a particular voucher. He further submitted that during the assessment proceedings, the desired vouchers were shown to AO for his verification, which he verified in detail. However, the above fact that the expenditure so incurred and debited by a particular voucher on a particular day, is a sum total of various expenditure as per supporting documents attached to that voucher. Hence, he requested to delete the addition of Rs. 2,48,910/- and allow the appeal of the assessee.

4.

On the other hand, Ld. DR relied upon the order of the Ld. CIT(A) and stated that he has passed a well reasoned order which does not need any interference.

5.

I have heard both the parties and perused the records especially the impugned order. I find that the assessee has claimed that there are different occasions for incurring expenses in small amounts, but copies of bills filed by him during appellate proceedings show that the voucher for these expenses have been prepared by assessee of the sum of Rs.2,48,910/- and the payment also has been made accordingly. In such situation, when the expenses incurred and payments made by assessee exceeds the amount of Rs. 20,000/- in each case, the same is disallowable u/s. 40A(3) of the Act, hence, I am of the considered view that Ld. CIT(A) has rightly upheld the addition of Rs. 2,48,910/- and dismiss the ground raised by the assessee, which does not need any interference on my part, hence, I uphold the action of the Ld. CIT(A) on the issue in dispute and reject the grounds raised by the Assessee.

6.

In the result, the Appeal of the Assessee is dismissed.

Order pronounced on 14-01-2019.

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