THE COMMISSIONER OF INCOME TAX, vs. DEVENDRAPPA M KALAL,

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 18th DAY OF SEPTEMBER 2013 PRESENT THE HON’BLE MR. JUSTICE K. L. MANJUNATH AND THE HON’BLE MR. JUSTICE A.N. VENUGOPALA GOWDA I.T.A. No.5018/2012 BETWEEN: 1. The Commissioner of Income Tax, C.R. Building, Navanagar, Hubli. 2. The Income Tax Officer, Ward-2(2), Hubli. - Appellants (by Sri Y.V. Raviraj, Advocate) AND: Sri Devendrappa M. Kalal, Opp. Kamaripeth Police Station, Torvi Hakkal Road, Hubli. - Respondent (notice served but unrepresented) This appeal is filed u/S 260A of the Income Tax Act, 1961, against the order passed in ITA No.220/BANG/2012 dated 30.03.2012 on the file of the Income Tax Appellate Tribunal, Bangalore Bench ‘B’ allowing the appeal filed by the assessee. This appeal coming for admission on this day, K.L.MANJUNATH, J, delivered the following:-

: 2 : JUDGMENT 1. The Revenue has come up in this appeal challenging the legality and correctness of the order passed by the Income Tax Appellate Tribunal, Bangalore Bench in ITA Nos.220/Bang/2012 for the assessment year 2008-09. 2. Heard Sri Y.V. Raviraj for the appellant. The respondent-assessee filed return of income for the assessment year 2008-09 by order of assessment passed u/S 143(3) of the Act. The Assessing Officer disallowed certain expenditure and added Rs.73,91,380/- on the ground that the assessee has made payment in cash in excess of Rs.20,000/- in respect of a single transaction which is in gross violation of Sec.40A(3). Aggrieved by the same the assessee filed an appeal before the Commissioner of Income Tax Appellate Tribunal, which appeal came to be dismissed on 29.12.2011. Challenging the concurrent

: 3 : findings of the Courts below the respondent-assessee filed an appeal before the Income Tax Appellate Tribunal. It was contended by the assessee that all the payments were made by him to purchase the scrap from the Railways, which is run by the Union of India. According to the assessee, in respect of the purchase of scrap made from the Railway, the payments were made and any payment made to the Government is required to be considered as a legal tender and the question of adding the same by deleting from the business expenses is an error committed by the Assessing Officer. Accordingly, the appeal came to be allowed. Challenging the findings of the Income Tax Appellate Tribunal, the present appeal is filed. 3. Having heard Sri Y.V. Raviraj, learned counsel for the Revenue we do not see any substantial question of law arises in this appeal for the following reasons.

: 4 : 4. The Revenue is not disputing that the assessee is a scrap dealer purchasing scrap from the Railways. Admittedly Railways is a concern of the Union of India. If any cash is paid towards purchase of the scrap the same cannot be disputed by the Revenue since such payment has to be considered as a legal tender. If the Revenue is of the opinion that no such payment has been made to the Railways, we could have considered their grievance. In the circumstances, the appeal is dismissed. SD/-

JUDGE SD/-

JUDGE bvv