TaxTMI 
TaxTMI 
TaxTMI 
2012 (9) TMI 120
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....arrying on business of reselling country liquor. During the course of assessment proceedings the AO noted that the assessee had made cash payment totalling to Rs. 41,32,300/- the details of which are as per Page 2 and 3 of the assessment order. He observed that the total purchases to the tune of Rs. 42,38,088/- were made on various dates given therein where the amounts of purchases were exceeding Rs. 20,000/- in each case. As against these purchases, the payments were made in cash by splitting into smaller amounts of less than Rs. 20,000/-. However, the AO observed that the aggregate payments to one party on the same day in each instance was more than Rs. 20,000/-. In other words, whereas each of these purchase exceeds Rs. 20,000/- the cor....
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.... assessee relied on the following decisions. 1. Chaudhari 7 Co. Vs. ITO (1976) 2 TTJ (All) 1497 2. Rumugha Midliar & Co. Vs. ITO (1981) 11 TTJ (Mad.) 173 3. ITO Vs. Patidar Ginning and Pressing Co. (1994) 51 ITD 7 (Ahd.) 4. ITO Vs. Madanlal Mittar (2005) SOT 880 (Delhi) 6. However, the AO was not satisfied with the various explanations given by the assessee. He observed that there was credit purchases from the party M/s. Deepak Traders. There was outstanding balance brought forward as on Ist April. Moreover there was a lag of 5 to 10 days for payments against these outstanding bill amounts. Therefore, he held that there was no justification in making the claim that there was insistence on the part of M/s. Deepak Traders for making the ....
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.... reported in 121 ITR 680. 2. CIT Vs. Brij Mohan Singh & Co. reported in 74 Taxmann 385 3. CIT Vs. Triveniprasad Pannalal reported in 94 Taxmann 381 4. CIT Vs. Kothari Sanitation and Tiles P. Ltd., reported in 282 ITR 117 5. CIT Vs.Bal krishan Jagdish Chand reported in 164 Taxmann 459 6. CIT Vs. Ashok Iron and Steel Rolling Mills reported in 320 ITR 101 He submitted that "payment or aggregate of payments made to a person in a day" was introduced by the Finance Act 2008 w.e.f. 01-04-2009. Referring to the decision of the Hon'ble Allahabad High Court in the case of Ashok Iron and Steel Rolling Mills (Supra) he submitted that amendment of section 40A(3) was not retrospective in nature. He accordingly submitted that since the assessment ye....
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....ayee bank draft, no deduction shall be allowed in respect of such expenditure". 10. A comparison of the provisions shows that the words "aggregate of payments made to a person in a day" was not there during A.Y. 2006-07. 10.1. We find the Hon'ble Allahabad High Court in the case of CIT Vs. Ashok Iron and Steel Rolling Mills (supra) has held as under : "Heard the learned counsel for the parties and perused the record. Sri A.N. Mahajan, learned standing counsel on behalf of the Department submits that in view of the latest amendment in section 40A(3) of the Act, the order of the Tribunal cannot be allowed to stand. However, we find that section 40A(3) of the Act, as it then stood at the relevant point of time, provided that the amount exce....
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....of money and does not refer to the totality of the expenditure". Against the said judgment of the Orissa High Court, a special appeal was preferred before the apex court and the said special appeal has been dismissed by the apex court as reported in [1983] 143 ITR (St.) 67. Learned standing counsel for the Department could not place any decision contrary to the above. Only submission which he could make is that in view of the amendment in law, the view of the Tribunal cannot be allowed to stand. Obviously, the said amendment was not available during the relevant assessment year and the said amendment was not retrospective in nature. In view of the above, there is no legal infirmity in the order of the Tribunal. The question of la....