AI Drafter 
TaxTMI 
TaxTMI 
2013 (11) TMI 281
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....sued on 18.4.2005. In response to notice and questionnaire, the assessee submitted certain details vide letter dated 1.6.2005, further vide letter dated 11.6.2005. Thereafter the jurisdiction of the assessee's case was transferred to ACIT (HQ)-VI, Mumbai, who had also issued notice and questionnaire on 27.6.2006. The assessee vide letter dated 27.7.2006 sought an adjournment. Thereafter the jurisdiction of the assessee's case was again transferred to the charge of ACIT-10(2), Mumbai. It appears that the representative of the assessee attended the assessment proceedings till 20.9.2006 when the case was adjourned to 28.9.2006 on the request of the assessee for filing further details. The AO mentioned in the assessment order that neither anybo....
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....eral persons which individuals payments were more than Rs. 10,000/-. Besides, there was one entry showing cash payment of Rs. 50,00,000/- with narration "CPCL Paramount cash payment-Head Office". Accordingly, the AO made an addition of Rs. 63,69,540/- by treating the said expenditure as nongenuine. In the remand report the AO submitted that during the remand proceedings the assessee had not furnished any detail except ledger extract of such expenditure incurred in cash. Therefore, the AO commented the genuineness of the claim was not acceptable. Accordingly, the AO propose for sustainability of disallowance. However, the CIT(A) deleted the addition on account of the cash payment of Rs. 50,00,000/- by noting the fact that the said amount rep....
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....in cash. Even the payments made in cash were also subjected to TDS to the extent of Rs. 9,00,000/-. The Ld. AR has submitted that the assessee was having about 80 working sites and the payments in cash were made out of necessities and urgency of work as the assessee had no Bank account on these sites. Thus, the payments in cash are covered in the exceptions as provided under the provisions of the Act. The Ld. AR has further submitted that there is no cash payments of Rs. 50,00,000/- as alleged by the AO. The said amount represents various sums remitted to company's account with State Bank of India, Chennai Brach. He has referred the Bank statement of the said account and submitted that there was no such single payment of Rs. 50,00,000/- as ....
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....t that the cash payment was inevitable in such circumstances. Therefore, the disallowance of the total payment of Rs. 13,69,540/- by the AO is not justified in the facts and circumstances of the case when the majority of payments were subjected to TDS. Since, the assessee failed to furnish necessary bills/vouchers therefore, the CIT(A) has restricted the addition to 10% of the said amount of Rs. 13,69,540/- which in our view is just and proper. Accordingly, we do not find any error or illegality in the impugned order of the CIT(A) qua this issue. 7. Ground No. 2 regarding deletion of disallowance on account of cash purchases and unexplained outstanding expenses. The AO noted from the details of purchase that an amount of Rs. 82,89,125/- ....
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....7,16,481/-. The assessee filed the full details of purchase at page no. 43 to 45 of the paper book. The Ld. AR has further submitted that the assessee had more than 80 sites and the expenditure in cash per site was about Rs. 1,00,000/-. He has further submitted that no single payment was more than Rs. 20,000/- hence no disallowance is called for on this account. Further the disallowance was not made u/s 40A(3) but the AO propose the disallowance by suspecting the inflated expenditure. He has further submitted that the AO has considered the facts of Rs. 54,00,168/- was part of the total cash purchase of Rs. 82,89,125/- and accordingly no disallowance is called for as regards Rs. 54,00,168/-. 9. Having considered the rival submissions and ....