TaxTMI 
TaxTMI 
2015 (3) TMI 670
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....f the Ld. CIT(A) is erroneous in law and on facts in deleting the addition of Rs. 10,00,000/- since the assessee failed to produce all the creditors and thus voluntarily surrendered an amount of Rs. 10,00,000/- out of the credit balance of Rs. 80,27,616/- for taxation. 2. The Ld. CIT(A) has erred in law and on facts in holding that surrender letter submitted by the assessee is ambiguous/defective and being made without any basis, was accepted by the AO in part, finds no place on order sheet and not in the hand writing of the assessee. 3. So far as these grievances are concerned, the relevant material facts are like this. The assessee is engaged in the business of foodgains. During the course of the assessment procee....
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....urrendered by the assessee of Rs. 10,00,000/-. In these circumstances, it would be better to accept the surrender of the assessee as voluntary disclosure. Accordingly, the amount of Rs. 10,00,000/- is added to the income of the assessee. 4. Aggrieved by stand so taken by the Assessing Officer, assessee carried the matter in appeal before the CIT(A). Learned CIT(A) noted that " all the sundry creditors were and are verifiable" and that "considering the entire documentary evidences, I am of the clear view that there was no reason with the appellant to make such a surrender". Accordingly, he concluded that "the surrender is held to be unwarranted and is being cancelled as objected and claimed by the appellant". The addition of Rs. 10,00,000....
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....atter. 7. Ground No. 2 and 3 are thus dismissed. 8. In ground no 3, the Assessing Officer has raised the following grievance: 3. The Ld. CIT(A) in his order dated 06.12.2012 in appeal No.761/2010-11/GZB-Alg and further appeal number 1006/2011-12/GZBAlg has erred in law and on facts in accepting the contention of the assessee that disallowance made u/s 40A(3) at Rs. 3,62,202/- (which was rectified u/s 154/143(3) to Rs. 18,11,008/-) was covered by clauses (1) of Rule 6DD and find support by clause (f) and (h) of Rule 6DD. 9. So far as this grievance is concerned, it is sufficient to take note of the fact that when the Assessing Officer issued a show cause notice in respect of the cash payments aggregating to Rs. 23....
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....ustries Ltd (26 SOT 196) which support this proposition. Once the payment is treated as having been made to the farmer, Section 40A(3) will not come into play. In view of these discussions, as also bearing in mind entirety of the case, we approve conclusions arrived at by the CIT(A) and decline to interfere in the matter. 11. Ground No. 3 is thus dismissed. 12. In ground nos. 4 and 5, the Assessing Officer has raised the following grievances: 4. The Ld. CIT(A) has also erred in law and on facts in deleting the addition made u/s 40(a)(ia) at Rs. 5,54,023/- by accepting, on one hand, applicability of section 40(a)(ia) on the other hand on the basis of judgment delivered by the Hon'ble ITAT in the case of Merilyn Sh....
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.... covered in favour of the assessee by a decision of Agra bench of this Tribunal, in the case of DCIT Vs Gupta Overseas [2014] 42 taxmann.com 42 (Agra - Trib.), wherein the Tribunal has, inter alia, observed as follows: 38. We are, however, saved of taking this call as, at this stage, it is useful to take note of the CBDT Circular 10/DV/2013 [F No. 279/Misc/M 61/2012 - Section 40 (a)(i) of the Income Tax Act, 1961] dated 16th December 2013, which, inter alia, observes as follows: 3.3. The Hon'ble Allahabad High Court in CIT Vs Vector Shipping Services Pvt Ltd [2013] 38 taxmann.com 77 (Allahabad) has affirmed the decision of the Special Bench in Merilyn Shipping that for disa....