TaxTMI 
TaxTMI 
2012 (7) TMI 719
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....the learned CIT(A) is against law and facts of the case. 4. The appellant craves the right to add, amend or withdraw any grounds of appeal at the time of hearing. 2. Facts, in brief, as per relevant orders are that e-return declaring income of Rs.30,67,87,220/-, filed on 29.10.2007 by the assessee, engaged in the business of construction and real estate , was selected for scrutiny with the service of a notice u/s 143(2) of the Incometax Act, 1961 (hereinafter referred to as the Act), issued on 22.09.2008. In this case, during the course of a survey conducted u/s 133A of the Act on 27.2.2007 in the various premises of the assessee at NOIDA & Okhla, physical inventory of the stock was valued at Rs. 1,94,35,348/-.On the basis of material found during the course of survey, the assessee surrendered an amount of Rs. 3 crores detailed hereunder:- [In Rs.] A. Unaccounted stock 125 lakhs B. Miscellaneous income from Sale of scrap packaging Material, sundry stores, And earth etc. 100 lakhs C Income from parking & Other charges- 35 lakhs D Discrepancy in impounded Material. 40 lakhs Total 300 lakhs 2.1 On peru....
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.... 13.06.2006 19,000/- 14.06.2006 19,000/- 15.06.2006 19,000/- 16.06.2006 19,000/- 17.06.2006 19,000/- 19.06.2006 19,000/- 20.06.2006 5,000/- Total 1,57,000/- Thus, to avoid the applicability of section 40A(3), the above payment has been entered on different dates. ii) Page 15 of Annexure D-8 (or page 115 of Annexure D-27) indicates that payment of Rs.l,16,000/- has been made to P.K.Suraj on 12.05.06. The above payment while recording in regular books of accounts has been recorded as under: Date Amount (Rs.) 13.05.2006 19,000/- 15.05.2006 19,000/- 16.05.2006 19,000/- 17.05.2006 19,000/- 18.05.2006 19,000/- 19.09.2006 19,000/- 20.05.2006 2,000/- Total 1,16,000/- Thus, to avoid the applicability of section 40A(3), the above payment has been entered on different dates. iii) Page 01 of Annexure D-50 (or page 59 of Annexure D-28) indicates that payment of `.l,16,400/- has been made to Ramjan Ali on 11.12.06. The above payment while recording in regular books of accounts has been recorded as under: Date Amount (Rs.) 11.12.2006 19,000/- 12.12.2006 19,000/- 13.....
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....ture is required to be disallowed. The total amount paid in cash exceeding Rs. 20,000/- is worked out at Rs. 2,86,99,431/-.The above working was also verified by the assessee during assessment proceedings. Thus, the assessee has made payment of Rs. 2,86,99,431/- in cash in violation of the provision of section 40A(3). Therefore, 20000/- of the above amount comes to Rs. 57,39,880/- . The assessee demanded that as he surrendered Rs.40 lacs during survey, on account of discrepancies in impounded material, the benefit of the same should be given to him. As the above surrender was to cover-up the discrepancies in the impounded material, the benefit of the same is granted to the assessee..Considering above Rs. 17,39,886/- (57,39,886 - 40,00,000) is disallowed and added to the total income of the assessee." 3. On appeal, the learned CIT(A) upheld the disallowance made by the AO in the following terms:- "3. I have carefully considered the submissions of Id AR and perused the assessment order passed by the AO. I find that the submissions made by the Ld. AR are not acceptable. It is seen from the assessment order that the AO has considered all the documents seized during the course of ....
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....de by the deponents in their respective affidavits. It was further submitted that documents placed at page 25 and 37 of the paper book revealed details about payments due and not actual payments while the payments actually paid by the assessee were reflected in their books of account. 5.On the other .hand, the ld. DR while relying to pages 18 and 26 of the paper book relied upon the findings of the ld. CIT(A). 6. We have heard both the parties and gone through the facts of the case. At the outset, we may have a look at the relevant extant provisions of sec. 40A(3) of the Act, which read as under: (3) Where the assessee incurs any expenditure in respect of which payment is made, after such date (not being later than the 31st day of March, 1969) as may be specified in this behalf by the Central Government by notification in the Official Gazette, in a sum exceeding twenty thousand rupees otherwise than by an account payee cheque drawn on a bank or account payee bank draft , twenty per cent. of such expenditure shall not be allowed as a deduction: Provided that where an allowance has been made in the assessment for any year not being an assessment year commencing prior to t....
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....documents impounded reflected payments due and not actually made. However, no evidence has been placed before us in support of this assertion. The affidavits of six persons all dated 22.12.2009 filed at the fag end of assessment proceedings and after more than three years of the relevant transactions are not corroborated by any material whatsoever. These affidavits dated 22.12.2009 were obviously filed at the instance of the assessee to serve his interest and such self-serving affidavits hardly achieve any purpose, especially when no cogent material has been placed before the lower authorities and even before us in support of contents of the affidavits. The ld. CIT(A) on perusal of the documents impounded during the survey, found that the ld. AR has not been able to point out that the entries contained in old ledger at page 21 are not correct. Annexure D-8 page 22 revealed that the assessee company made cash payments to Mr. Jamurati amounting to Rs. 1,57,000/- and same has been debited from the cash balance on 08.06.2006. Similarly, cash payment of Rs. 1,16,000/- was made to Mr. P. K. Suraj on 12.05.2006, `.1,16,400/- to Mr. Ramzan Ali on 11.12.2006 and Rs. 1,21,700/- to Ainul on 1....