R. G. SUNDAR & CO,ERODE vs. DCIT, CENTRAL CIRCLE-2, COIMBATORE, COIMBATORE

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ITA 121/CHNY/2024Status: DisposedITAT Chennai30 May 2024AY 2017-18Bench: SHRI MAHAVIR SINGH (Vice President), SHRI JAGADISH (Accountant Member)7 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that delivery charges were for hiring goods carriages, allowing cash payments up to Rs. 35,000. It also deleted the addition under Section 68, finding that the assessee had discharged its onus by providing audited accounts and evidence of a deposit for dealership which was later adjusted.

What were the facts?

The assessee firm's appeal concerns disallowance under Section 40A(3) for cash payments exceeding Rs. 20,000 and an addition under Section 68 for a deposit. The CIT(A) confirmed part of the Section 40A(3) disallowance but the Tribunal found that delivery charges were for hiring goods carriages, with a higher cash limit.

What were the issues?

Whether cash payments for hiring goods carriages are subject to the Rs. 20,000 limit under Section 40A(3) and whether a deposit for dealership is a valid credit under Section 68.

Which sections of the Income-tax Act were involved?

Section 40A(3),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI MAHAVIR SINGH & SHRI JAGADISH

Hearing: 30.05.2024Pronounced: 30.05.2024

per its own books of account, which has not been authenticated by other party and therefore can not be accepted . The Ld. CIT(A) has confirmed the addition as the assessee has not filed any evidence from M/s. Pon Azhagu Stores to establish creditworthiness.

9.

The Ld. A.R has submitted the copy of audited account reiterating the fact that Rs. 2,00,000/- was received from M/s. Pon Azhagu Stores for dealership on 13.02.2017 and the same has been refunded/adjusted on 10.08.2018 and there has been continuous transaction before the cancellation of dealership.

10.

The Ld. D.R relied upon the orders of the authorities below.

11.

We have heard the rival contentions, and perused the materials available on record. The assessee has received deposit of Rs.2,00,000/- from M/s. Pon Azhagu Stores on 13.02.2017 which is duly recorded in the books of accounts. There has been a number of transactions of goods supplied and payment received recorded in the books of account and finally on 10.08.2018 Rs. 2,00,000/- has been refunded/adjusted. The assessee has submitted that accounts are duly audited by Charted Accountant, which has been noted by the A.O and Ld.CIT(A). The assessee has discharged his onus by submitting copy of ledger accounts from the audited books of account . The money has been received by cheque , which has been refunded in the subsequent year on the cancellation of dealership. Therefore we are of opinion that the Ld.CIT(A) was not justified to confirm the addition of Rs 200000 u/s 68 . Hence, the addition made is deleted.

12.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open Court on 30th May, 2024.

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