ITO, KHURDA WARD, KHURDA, KHURDA vs. CHITTARANJAN TRIPATHY, NAYAGARH

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ITA 237/CTK/2013Status: DisposedITAT Cuttack04 January 2017AY 2009-101 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The CIT(A) held that cash deposits made by the appellant directly to the principal's bank account would not fall under the mischief of Section 40A(3). The ITAT confirmed the CIT(A)'s order, directing deletion of the disallowance.

What were the facts?

The assessee acted as a franchisee-distributor for recharge vouchers and made cash deposits directly to the principal's bank account. The Assessing Officer made a disallowance under Section 40A(3) for these cash payments.

What were the issues?

Whether cash payments made directly to the principal's bank account by a franchisee-distributor fall within the purview of Section 40A(3) disallowance.

Which sections of the Income-tax Act were involved?

Section 40A(3)

AI-generated summary — verify with the full judgment below

6 ITA No.237 /CT K/20 13 CO.No .26 /CT K/20 16 Asse ssment Year : 20 09- 201 0 The said decision would be squarely cover the facts and circumstances of the present case, and following which we direct for the deletion of the impugned disallowance u/s. 40A(3). “

6.

After considering the submissions of the assessee, ld CIT(A) held as

under:

“I have carefully analysed the arguments placed before me. A perusal of the full decision of the ITAT, Cochin Bench would negate the arguments placed before me in the case of Shri Renukeswara Rice Mills vs ITO. Therefore, I prefer to deal with the present case as per the decision of ITAT Cochin Bench (supra) particularly considering their observation at para 3.6 of the order as quoted above. The case of the appellant is mostly similar to the case of Koottummal Group vs ITO, Ward-3, Thiruvalla and the appellant was acting as a franchisee- distributor for the recharged vouchers of M/s. Dish TV India Ltd. Therefore, the cash deposits made by the appellant directly to the ICICI Bank account of the principal would not fall under the mischief of section 40A(3). Accordingly, I direct the AO to delete the disallowance of Rs.43,31,466/-.”

7.

During the course of hearing, ld D.R. relied on the order of the Assessing

Officer. He could not point out any specific error in the above quoted order of

the ld CIT(A). In view of above, I do not find any good and justifiable reason

to interfere with the order of the ld CIT(A), which is hereby confirmed and the

grounds of appeal of the revenue are dismissed.

8.

Ld A.R. of the assessee submitted that he is not pressing the cross

objection filed by the assessee and also made an endorsement to this effect

in Form No.36A filed before the Tribunal. Therefore, the cross objection filed

by the assessee is dismissed as withdrawn.

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