DEOGIRI TRANSPORT,MUMBAI vs. ASST CIT 21(1), MUMBAI

Per Rajesh Kumar, Accountant Member:

by the assessee are as under:

1. The learned ACIT erred in making addition of Rs.3,20,87,500/- invoking section 40A(3) & 40A(3A) of Income Tax Act, 1961 without considering the circumstances under which appellant had to make cash payment. The appellant relies on the following judgments where it was held that rule 6DD is illustrative and not exhaustive and the circumstances laid down in U) under rule 6DD should be considered liberally. The cases relied: Anupam Teleservices Vs. ITO TA No.556/2013 (Guj HC)

2 M/s. Deogiri Transport Attar Singh Gurmukh Singh Vs. ITO Ludhiana 1991 AIR 2109 (SC) Smt.Harshila Chordia Vs. ITO (2008) 298 ITR 349 (Raj HC) Commissioner of Income Tax Vi vs Vatika Construction Pvt. Ltd. (Delhi HC decided on 11-10-2012) I.T.O. WD 12(1) Kolkata vs. Standard Leather Pvt. LTd. (ITA No.2620/Kol/2013 decided by Hon'ITAT ‘C’ Bench Kolkata) Also learned ACIT never questioned about the genuiness of the expenditure nor identity of payee while passing the order. The appellant state that the expenditure was made in cash for business expediency otherwise appellant would have suffered business heavily. The appellant prays to delete entire additions in view of facts of the case.

2 T he le ar ne d ACI T e r re d in ma ki ng addi tio n of Rs. 3 ,2 0 ,87 ,50 0 /invoking section 40A(3) & 40A(3A) of Income Tax Act, 1961 without considering the fact that the payments were made to the subcontractors which were not subjected to disallowance u/s 40A(3) & 40A(3A) of Income Tax Act, 1961 on peculiar fact of the case. The 7 c a s e r e l i e d o n C o m m i s s i o n e r o f I n c o m e T a x & O t h e r s V s . Ba l a ji Engineering & Construction Works (2010) 323 ITR 351 (Kar HC)

3 The appellant craves leave to add, to alter or amend the above Grounds of appeal before or at the time of hearing of appeal.”

3. The only issue involved in the present appeal is against the decision of Ld. CIT(A) confirming the addition of Rs.3,20,87,500/- made by the AO invoking the provision of section 40A(3) and 40A(3A) of the Act

4. At the outset, the counsel drew our attention to the application filed under rule 29 of the Income Tax Appellate Tribunal Rules for admission of additional evidences which could not be filed before the authorities below and are filed from page No.77 to 90 of the paper book. The Ld. A.R. of the assessee submitted that since these evidences has a strong relevance and are directly connected to the issue involved in the appeal and therefore the same should be admitted in the interest of justice and fairplay. The ld DR on the other hand

3 M/s. Deogiri Transport objected to the admission of these evidences as the assessee was given sufficient opportunity in the assessment proceedings but despite that these evidences were not filed by the assessee.

4 M/s. Deogiri Transport to make payment by cheques as these are not accepted by the truck owners. The ld AR submitted that this covered by the provisions of rule 6D as the exception specified therein are illustrative and not exhaustive and there could be circumstances beyond the instances as enumerated in rule 6D. The Ld. A.R. has raised the plea of truck operator being agent of the assessee for the first time before the Tribunal which is also not examined by the AO in the assessment proceedings. Under these circumstances, we are of the view that it would meet the interest of justice if the matter is restored to the file of AO to examine all these additional evidences and additional plea raised before us and decide the issue denovo based upon the facts and circumstances of the case. Accordingly, the matter is restored back to the file of the AO with the direction to decide the same afresh after allowing a reasonable opportunity to the assessee.

Order pronounced in the open court on 14.05.2018.