Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH ‘G’ : NEW DELHI
Before: HON’BLE SHRI G.D. AGRAWAL & SHRI A.T. VARKEY
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘G’ : NEW DELHI) BEFORE HON’BLE SHRI G.D. AGRAWAL, VICE PRESIDENT and SHRI A.T. VARKEY, JUDICIAL MEMBER ITA No.5238/Del./2012 (ASSESSMENT YEAR : 2008-09) M/s. SDC Foods India Pvt. Ltd., vs. ACIT, CC – 19, (Formerly known as Staple Distribution Co.Ltd.), New Delhi. Unit No, 134,1st Floor, Rectangle I, Saket District Centre , New Delhi – 110 017. (PAN : AALCS1628L) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Sanat Kapoor, Advocate REVENUE BY : Shri B. R. R. Kumar, Senior DR Date of Hearing : 04.11.2015 Date of Pronouncement : 24.11.2015 ORDER PER A.T.VARKEY, JUDICIAL MEMBER :
This appeal, at the instance of the assessee, is directed against the order of CIT (Appeals)-XXXIII, New Delhi dated 07.08.2012 for the assessment year 2008-09. 2. The facts in brief are that original return in this case was filed on 14.10.2008 declaring loss of Rs.6,86,736/-. A search and seizure operation was carried out in Dawat Group of cases including the assessee on 10.02.2009.
Accordingly, statutory notice u/s 153A of the Income-tax Act, 1961 (hereinafter ‘the Act) was issued on 07.10.2009 requiring the assessee to file the return of its income for the above assessment year within 16 days of service of the said notice.
The assessee filed the return of its income on 11.12.2009 declaring total loss at Rs.6,86,736/- which was declared by the assessee in the original return. Pursuant thereto, AO framed assessment at a loss of Rs.6,01,236/- after making a disallowance of Rs.85,500/- u/s 40A(3) of the Act. The above disallowance stood confirmed on Appeal and hence this appeal by assessee before us.
Ground Nos.1, 2 & 3 challenge the validity of notice and order of assessment u/s 153A of the Act on the ground that disallowance is not based on incriminating evidence found at the premises of the assessee during the course of search.
On careful consideration, we find the plea not maintainable as it is a case where proceedings were pending before the AO on the date of search. In fact, notice u/s 153A was issued on 07.10.2009 prior to the limitation for issuing notice u/s 143(2) in respect of original return filed on 31.10.2008. Therefore, we find no merit in the aforesaid grounds of the assessee.
Ground Nos.4 to 6 relates to disallowance of Rs.85,500/- u/s 40A(3).
The Ld. CIT(A) has upheld the disallowance by holding as under :-
“2.3 I have carefully considered the views of the Assessing Officer and the submissions of the appellant on this issue. Section 40A(3) lays down that no deduction shall be allowed in respect of expenditure the payment for which is made otherwise then by a account payee cheque drawn on a bank or account payee bank draft, if the payment exceeds Rs.20,000/-. The exceptional circumstances under which cash payment exceeding Rs.20,000/- is allowable are listed in Rule 6DD of the Income Tax Rules, 1962. Payment to a lawyer or payment for legal or professional services is not listed as an exception in Rule 6DD. In view of this, the Assessing Officer was correct in disallowing the sum of Rs.85,500/- u/s 40A(3). Ground no. 2 is, therefore, dismissed.
Having consideration the rival submission, we find that the instant payment does not fall within the exceptions provided in Rule 6DD and hence, the disallowance is made in conformity with the scope of the section 40A(3) of the Act. Accordingly, these grounds have no merits and are dismissed.
In the result, the appeal filed by the assessee is dismissed. Order pronounced in open court on this 24th day of November, 2015.