THE ITO, 2(1), UJJAIN vs. SHRI SURESH SONI, UJJAIN

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ITA 173/IND/2017Status: DisposedITAT Indore05 May 2017AY 2011-123 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found that the assessee had provided a partywise bifurcation of cash payments, and the CIT(A) had verified that no single payment to an individual exceeded Rs. 20,000/- in a day. Therefore, the disallowance under Section 40A(3) was not justified.

What were the facts?

The Assessing Officer disallowed a sum of Rs. 2,47,500/- on account of cash payments exceeding Rs. 20,000/- made by the assessee. The assessee had attempted to bifurcate payments to appear below the threshold.

What were the issues?

Whether the cash payments made by the assessee were in contravention of 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, INDORE BENCH, INDORE

Before: SHRI C.M. GARG & SHRI O.P. MEENA

For Respondent: Shri Mohd. Javed - DR, Shri

आदेश /O R D E R

PER SHRI C.M. GARG, JM

This appeal has been filed by the revenue against the order of

the learned CIT(A), Ujjain, dated 7.12.2016 in First Appeal No. U-

209/2015-16 for the assessment year 2011-12. 1

Suresh Soni ITA No. 173/Ind/2017 2. The only issue raised by the revenue in this appeal is that the

Commissioner of Income Tax (Appeals) was not justified in deleting

the disallowance ofRs.2,47,000/- on account of payment made in

contravention to provision of section 40A(3) of the Act.

3.

During the course of assessment proceedings the Assessing

Officer observed that the assessee has made cash payment

exceeding Rs. 20,000/-. He, therefore, issued notice u/s 142(1) of

the Act. In response thereto, the assessee filed details of cash

payments on scrutiny of which the Assessing Officer found that the

assessee has tried to bifurcate the payment of bills/vouchers with

the intention to show that the payments are below Rs. 20,000/-.

However, the Assessing Officer did not accept the same. The

Assessing Officer, accordingly, disallowed Rs. 2,47,500/- and added

the same to the total income of the assessee u/s 40A(3) of the Act.

On appeal, the Commissioner of Income Tax (Appeals) allowed the

appeal of the assessee. Now the revenue is in appeal before the

Tribunal.

3.

Before us, the learned DR supported the order of the

Assessing Officer while opposing the order of the Commissioner of

Suresh Soni ITA No. 173/Ind/2017 Income Tax (Appeals). On the other hand, the learned counsel for

the assessee strongly relied upon the order of the Commissioner of

Income Tax (Appeals).

4.

After careful consideration of the rival submissions of the

parties and the relevant material placed on record of the Tribunal,

we find that the assessee has filed partywise bifurcation of the cash

payments made. On verification of the same, the Commissioner of

Income Tax (Appeals) found that the assessee has not made any

payment in excess of Rs. 20,000/- to individual person in a single

day and as such the assessee’s case does not fall within the

provisions of section 40A(3) of the Act. We, therefore, find no flaw in

the order of the Commissioner of Income Tax (Appeals) and

accordingly confirm the same.

5.

In the result, the appeal of the revenue stands dismissed.

The order has been pronounced in open Court on 5th May,

2017.

Sd/- sd/- लेखा सद�य �या�यक सद�य (O.P.Meena) (C.M. Garg) Accountant Member Judicial Member May 5 , 2017 3

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