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Income Tax Appellate Tribunal, ‘B’ / ’SMC’ BENCH: CHENNAI
Before: SHRI N.R.S. GANESAN
आदेश / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-7, Chennai, dated 23.03.2018, and pertains to the AY 2014-15.
Mr.N.Vijaykumar, Ld. Representative of the assessee submitted that there are two issues arise for consideration. First issue is disallowance of Rs.20,43,400/- u/s.40A(3) for payment of cash exceeding Rs.20,000/-.
The second addition was with regard to the addition of Rs.1,85,838/-.
According to the Ld.Representative of the assessee, the assessee has made cash payment to two parties in the course of the trading activity.
Ld.Representative further submitted that the payment made in cash was not debited to P&L A/c and it was not claimed as expenditure. Therefore, it cannot be disallowed. According to the Ld.Representative, the question of disallowance would not arise for consideration, since the assessee has not claimed payment made in cash as expenditure. With regard to Rs.1,85,838/- confirmation letter was filed by M/s.Nizam Energy Pvt. Ltd., and therefore, there cannot be any disallowance.
I heard Shri B.Sagadevan, the Ld.DR also. The Ld. Departmental Representative submitted that since the assessee claims that the payment of Rs.20,43,400/- in cash was not claimed as expenditure and it was not debited to P&L A/c., this Tribunal is of the considered opinion that there cannot be any disallowance of Rs.20,43,400/-. The question of disallowance would arise provided that the assessee claimed the same as expenditure while computing the taxable income. In view of the above, it needs to be verified whether the assessee claimed the payment of Rs.20,43,400/- as expenditure while computing the taxable income.
Moreover, the assessee also claims that he filed a confirmation letter for payment of Rs.1,85,838/-. Therefore, this should also need to be verified.
Accordingly, the orders of both the authorities below are set-aside and the entire issues raised by the assessee are remitted back to the file of the AO. The AO shall re-examine the issues raised by the assessee and thereafter decide the same afresh in accordance with law after giving a reasonable opportunity to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on the 3rd day of December, 2018, in Chennai.