SUNIL SRICHAND KARARA,NAVI MUMBAI vs. ITO 22(3)(4), NAVI MUMBAI

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ITA 1216/MUM/2014Status: DisposedITAT Mumbai20 October 2016AY 2009-103 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal confirmed the disallowance under Section 40(a)(ia) as the assessee failed to provide evidence that TDS was not attracted. Similarly, the disallowance under Section 40A(3) was confirmed due to the assessee's failure to prove the cash payment fell under Rule 6DD exceptions.

What were the facts?

The assessee appealed against disallowances made under Section 40(a)(ia) for non-deduction of TDS on clearing and forwarding expenses and under Section 40A(3) for cash payments exceeding the prescribed limit for purchase of tomatoes. The assessee did not appear for the hearing.

What were the issues?

Whether disallowance under Section 40(a)(ia) is justified for non-deduction of TDS on C&F expenses and whether disallowance under Section 40A(3) is justified for cash payments to a farmer without proving Rule 6DD exceptions.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” Bench, Mumbai

Before: Shri B.R. Baskaran (AM)& Ramlal Negi (JM)

For Respondent: Shri Nitin Waghmode
Hearing: 20.10.2016Pronounced: 20.10.2016

O R D E R Per B.R. Baskaran (AM) :-

The appeal filed by the assessee challenging the order dated 2.11.2014 passed by the learned CIT(A)-33, Mumbai and it relates to A.Y. 2009-10.

2.

None appeared on behalf of the assessee and notice of hearing sent by RPAD on the last occasion has been returned back with the noting ‘left’. Since the assessee has filed this appeal way back in February 2014, we prefer to dispose of this appeal ex-parte, without presence of the assessee. The assessee is contesting the decision rendered by the learned CIT(A) on the following issues :-

a) Disallowance made u/s. 40(a)(ia) of the Act b) Disallowance made u/s. 40A(3) of the Act

3.

We heard learned Departmental Representative and perused the record. The first issue relates to disallowance made u/s. 40(a)(ia) of the Act. The assessee had claimed a sum of ` 4,68,205/- as clearing and forwarding expenses. The assessee did not deduct tax at source from the said payment.

2 Shri Sunil Srichand Karara Hence, the Assessing Officer disallowed the above said claim u/s 40(a)(ia) of the Act. The learned CIT(A) granted relief of ` 49,534/- and confirmed the disallowance of ` 4,27,141/- as the assessee did not furnish documentary evidence in support of the bills raised by C&F agent.

4.

Before us also the assessee has not furnished any material to prove that the payment made to C&F agent was not attracted by TDS provisions. Under these set of facts, we have no other option but to confirm the order passed by the learned CIT(A) on this issue.

5.

Next issue relates to disallowance of ` 3,60,000/- made u/s. 40A(3) of the Act. The assessee had purchased tomatoes on various dates from M/s. Gopi Girnar, Nashik. Out of the payment made to the above said party, a sum of ` 3,60,000/- was paid by way of cash in violations of provisions of sec. 40A(3) of the Act. When questioned, the assessee submitted that Mr. Gopi Girnar is a cultivator of tomatoes hence payment made to him is covered under exception given under rule 6DD of the I.T. Rules. Though the assessee furnished 7/12 extract in support of the land held in the joint name of Gopinath Vishnupant Khode and Ambadas Vishupant Khode, the learned CIT(A) took the view that 7/12 extract alone does not prove that Mr. Gopi Girnar is a cultivator of agriculture produce. The learned CIT(A) also observed that a farmer normally would not sell goods on credit. Accordingly he rejected the contentions of the assessee and confirmed the disallowance made u/s. 40A(3) of the Act.

6.

Before us also assessee did not furnish any evidence to prove that the payment of ` 3,60,000/- made by way of cash is covered exception provided under rule 6DD of the I.T. Rules by controverting the observations made by Ld CIT(A). Hence, we have no other option but to confirm the order passed by the learned CIT(A).

7.

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

3 Shri Sunil Srichand Karara

Order has been pronounced in the Court on 20.10.2016

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