Appeal partly allowed, remands for fresh examination. Emphasis on verification and procedural compliance. Statutory requirements highlighted.

The appeal was partly allowed for statistical purposes, with remands for fresh examination on specific issues. The Tribunal emphasized the need for detailed verification by the AO in certain cases and upheld the disallowances where procedural lapses were evident. The judgment highlights the importance of adhering to statutory requirements and providing compelling evidence for exceptions.

---

---

Issues Involved:
1. Addition of Rs. 2,45,570/- under Section 40A(3) of the Income Tax Act, 1961.
2. Addition of Rs. 86,76,512/- under Section 40(a)(ia) of the Income Tax Act, 1961.
3. Addition of Rs. 26,687/- out of disallowance of interest payment on TDS.
4. Addition of Rs. 87,887/- disallowance out of conveyance expenses and travelling expenses.
5. Addition of Rs. 1,50,000/- under Section 40(a)(ia) of the Income Tax Act, 1961.
6. Addition of Rs. 4,62,014/- under Section 40(a)(ia) of the Income Tax Act, 1961.
7. Addition of Rs. 10,00,000/- on account of excess payment of salary.

Detailed Analysis:

Issue 1: Addition of Rs. 2,45,570/- under Section 40A(3)
The Assessing Officer (AO) observed that the assessee made cash payments exceeding Rs. 20,000 to M/s Bikaner Detective Security Service, violating Section 40A(3) of the Income Tax Act. The AO noted no compelling reasons for such cash payments. The CIT(A) upheld this finding, stating that payments were not covered under any exceptional or unavoidable circumstances under Rule 6DD. The assessee argued that payments were made to individual guards who lacked bank accounts, citing business expediency. However, the Tribunal held that the assessee should have made payments to the security agency via cheque or bank draft, and no exceptional circumstances were proven. The ground was dismissed.

Issue 2: Addition of Rs. 86,76,512/- under Section 40(a)(ia)
The AO disallowed Rs. 86,76,512/- paid to non-banking finance companies without TDS under Section 194A. The CIT(A) confirmed the disallowance. The assessee contended that the second proviso to Section 40(a)(ia), introduced by the Finance Act 2012, should apply retrospectively, as held by the Delhi High Court in CIT Ansal Landmark Township Pvt. Ltd. The Tribunal agreed, noting that the second proviso is declaratory and curative, thus retrospective. The matter was remanded to the AO to verify if the payees included the income in their returns and paid due taxes. This ground was allowed for statistical purposes.

Issue 3, 4, and 6: Additions of Rs. 26,687/-, Rs. 87,887/-, and Rs. 4,62,014/-
These grounds were not pressed by the assessee and were dismissed accordingly.

Issue 5: Addition of Rs. 1,50,000/- under Section 40(a)(ia)
The AO disallowed Rs. 1,50,000/- as TDS was deducted in the next financial year. The Tribunal upheld this, stating that the deduction should be allowed in the next financial year, not the current one. This ground was dismissed.

Issue 7: Addition of Rs. 10,00,000/- on account of excess payment of salary
The AO found discrepancies in salary payments for January and March 2011, noting excessive amounts compared to other months and incomplete salary sheets. The CIT(A) reduced the disallowance to Rs. 10,00,000/-. The assessee argued that the payments were genuine and necessary for business, citing increased sales and the employment of additional staff towards the financial year's end. The Tribunal found insufficient material on record and remanded the matter to the AO for fresh examination. This ground was allowed for statistical purposes.

Conclusion:
The appeal was partly allowed for statistical purposes, with remands for fresh examination on specific issues. The Tribunal emphasized the need for detailed verification by the AO in certain cases and upheld the disallowances where procedural lapses were evident. The judgment highlights the importance of adhering to statutory requirements and providing compelling evidence for exceptions.

---