Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
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) – 15, Chennai, dated
13.07.2016 and pertains to assessment year 2010-11.
There was a delay of 65 days in filing this appeal by the
assessee. The assessee has filed a petition for condonation of
2 I.T.A. No.3465/Mds/16
delay. We have heard the Ld.counsel for the assessee and the Ld.
D.R. We find that there was sufficient cause for not filing the appeal before the stipulated time. Therefore, we condone the delay and admit the appeal.
Shri V.K. Gurunathan, the Ld.counsel for the assessee, submitted that the Assessing Officer disallowed a sum of `15,61,661/- under Section 40A(3) of the Income-tax Act, 1961 (in
short 'the Act') on the ground that the assessee has made cash payment exceeding `20,000/-. Similarly, a disallowance of
`1,15,000/- was also made by the Assessing Officer. The
Ld.counsel submitted that the payment was for purchase of wheat products and lorry booking charges. A consolidated disallowance was made by the Assessing Officer without considering the
independent payments made to respective persons. According to the Ld. counsel, the payment made by the assessee does not exceed `20,000/- in any way. On a query from the Bench, whether
the Assessing Officer disallowed the payments on the ground that only self-made vouchers were produced? The Ld.counsel
submitted that all the payments were accepted by the Assessing Officer and the disallowance was made only under Section 40A(3) of the Act on the ground that the payment exceeded `20,000/-.
3 I.T.A. No.3465/Mds/16
According to the Ld. counsel, the details of the payment clearly indicate that the payment does not exceed `20,000/-, therefore, the
Assessing Officer is not correct in observing that the assessee has
made only self-made vouchers. The Ld.counsel further submitted that he had no objection if the matter is remitted back to the file of the Assessing Officer for verification.
We have heard Shri AR.V. Sreenivasan, the Ld. Departmental Representative also. The Ld. D.R. submitted that the assessee has produced only self-made vouchers before the
Assessing Officer. The assessee has made payments to M/s Pitchaiah Lorry Service / Meridian Agency exceeding `20,000/-.
Therefore, according to the Ld. D.R., it is not correct to say that the payment does not exceed `20,000/-. However, the Ld. D.R.
submitted that he would not have any objection if the matter is remitted back to the file of the Assessing Officer for verification of
vouchers once again.
We have considered the rival submissions on either side and perused the relevant material available on record. The Assessing
Officer disallowed the claim of the assessee on the ground that the assessee has produced only self-made vouchers. When the
4 I.T.A. No.3465/Mds/16
Assessing Officer doubted the payment on the ground that the
assessee is maintaining only self-made vouchers, it is not known
why the provisions of Section 40A(3) of the Act was invoked? For
the purpose of invoking Section 40A(3) of the Act, the Assessing
Officer has to accept that the payment as genuine. Only in respect of genuine payments which exceeded `20,000/-, disallowance can
be made under Section 40A(3) of the Act. If the payments were not
genuine and the assessee could not establish the genuineness of
payment, then the disallowance can be for not supporting the
expenses. Moreover, the assessee claims that no payment was made exceeding `20,000/-. The assessee claims that the
Assessing Officer has taken aggregate payments made to particular
person on different dates. In view of the above, this Tribunal is of
the considered opinion that the matter needs to be reconsidered.
Accordingly, the orders of both the authorities below are set aside
and the disallowance made by the Assessing Officer under Section
40A(3) of the Act is remitted back to the file of the Assessing
Officer. The Assessing Officer shall re-examine the matter in the
light of the material that may be filed by the assessee and thereafter
decide the issue afresh in accordance with law, after giving a
reasonable opportunity to the assessee.
5 I.T.A. No.3465/Mds/16
Coming to the other issue with regard to levy of interest under Section 234B and 234C of the Act is concerned, the levy of interest is mandatory and consequential. Since the main issue of disallowance under Section 40A(3) of the Act is remitted back to the file of the Assessing Officer, the levy of interest also needs to be reconsidered by the Assessing Officer. Accordingly, the orders of the lower authorities are set aside. The Assessing Officer shall reconsider the issue of levy of interest under Section 234B and 234C of the Act once again 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 27th July, 2017 at Chennai.
sd/- sd/- (ए. मोहन अलंकामणी) (एन.आर.एस. गणेशन) (A. Mohan Alankamony) (N.R.S. Ganesan) लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member
चे�नई/Chennai, �दनांक/Dated, the 27th July, 2017.
Kri.
6 I.T.A. No.3465/Mds/16
आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त (अपील)/CIT(A)-15, Chennai-34 4. आयकर आयु�त/CIT-6, Chennai-34 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF.