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Income Tax Appellate Tribunal, AGRA BENCH, “DB” AGRA
Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2018-19 arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1057270539(1) dated 20.10.2023 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte.
This assessee’s appeal raises the following substantive grounds:
1. 1. That the Order of the Ld. Cit(A) NFAC New Delhi bearing DIN ITBA/NFAC/S/250/2023-24/1057270539(1) dated 20/10/2023 is bad in law and on facts and deserves to be quashed.
2. That Ld. CIT(A) was not justified in sustaining the impugned addition of Rs. 65,79,902/- made by the AO U/s 40A(3) of the Income Tax Act, 1961 3. That Ld. CIT(A) failed to consider the judicial pronouncements of various hon'ble courts relied on by the appellant without specifying any cogent reason and distinguishing the ratios as laid down by the hon'ble courts in the respective case laws.
4. That Ld. CIT(A) completely failed to appraise the submission of the appellant substantiating the fact that the cash payment in excess of the prescribed limit was made to D.V.N.L. (Dakshinanchal Vidyut Vitran Nigam Ltd) which is wholly owned Government Undertaking and as such is completely covered under the provisions of Rule 6DD of the Income Tax Rules 1961.
5. That the appellant craves the leave to add / alter / modify / delete /substitute any or all the grounds of appeal either before or during the course of hearing.
4. Suffice to say, it emerges during the course of hearing with the able assistance coming from the Revenue side that both the 2 | P a g e learned lower authorities have invoked section 40A (3) disallowance of Rs.65,79,902/- thereby holding the assessee to have made cash payments of Revenue’s expenditure to U.P. Dakshinanchal Vidyut Vitran Nigam. Learned lower authorities hold that the assessee could not prove its case in tune with all the relevant clauses accepting such cash expenditure payments under Rule 6DD of the Income Tax Rules. The Revenue also draws strong support from their respective discussions and quotes Attar Singh Gurmukh Singh vs Income Tax Officer (1991) 191 ITR 667 (SC) that the impugned disallowance deserves to be upheld.
5. We have given our thoughtful consideration to the assessee’s pleadings and the Revenue’s vehement contentions. We find no merit to sustain the impugned disallowance. This is for the precise reason that not only the assessee has made payments in cash to the above stated payee but also it is a wholly owned Government undertaking which itself satisfies the dates of overwhelming genuineness in light of Anupam Tele Services vs ITO in (2014) 43 taxmann.com 199 (Guj), wherein, their lordships have held that Rule 6DD is not self-exhaustive in an instance involving cash payments. We draw strong support therefrom to delete the 3 | P a g e impugned section 40A(3) disallowance in very terms. Ordered accordingly. 6. This assessee’s appeals is allowed. Order pronounced in the open court on 6th February, 2025 Sd/- Sd/- (M. BALAGANESH) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 6th February, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra
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