TaxTMI 
TaxTMI 
2015 (4) TMI 788
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....provisions of section 40A(3) of the Income Tax Act. 4. That the Ld. Assessing Officer misrepresented himself in not allowing the exemption available under rule 6DDof the Income Tax Rules. 5. That the Ld. Assessing Officer as well as the Ld. CIT(A) omitted to analyse the individual transactions." 3. Briefly, stated the facts giving rights to this appeal during the assessment proceedings. The Assessing Officer noted that the expenses incurred by the assessee above prescribed limit in view of Section 40A (3) of the Income Tax Act, 1961 (for short Act) , 20% of the same have to be disallowed and added to the income of the assesse and the AO made addition of Rs. 93,731/- being 20% of Rs. 4,68,655/-. Aggrieved assessee preferred an appeal before CIT(A) which was also dismissed vide order dated 23.12.2009 and the addition made by the AO was confirmed. The assessee carried the matter to the ITAT in ITA No. 308/Del/2010 which was allowed for statistical purposes restoring the matter to the file of CIT(A) for de novo adjudication by passing speaking order. As per directions of the Tribunal in order dated 22.06.2010 (Supra) CIT(A) again dismissed the appeal of the assessee by pass....
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....sing any view on merits we deem it proper to admit these additional grounds for consideration and hence, additional ground raised by the assessee are admitted for consideration and adjudication. Accordingly, application of the assessee in this regard is allowed. 5. Additional ground no. 1 of the assessee :- The Ld. AR submitted that the Assessing Officer completed the assessment proceedings without affording the assessee sufficient opportunity of being heard. The Ld. AR submitted that the relevant material to support the contention of the assessee was placed before the authorities below which was not considered properly and the assessee was deprived of opportunities of being heard. The Ld. Departmental Representative (DR) drawn our attention towards assessment order dated 15.12.2008 and submitted that the Assessing Officer granted due opportunity of hearing for the assessee and after due consideration of the explanation and submission of the assessee, the issue has been adjudicated as per provisions of the Act and therefore, it cannot be said that the assessing officer completed the assessment without affording the assessee due or sufficient opportunity of being heard to the ass....
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....of holiday or strike; (k) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person;" 8. The Ld. AR submitted that the Assessing Officer went beyond the facts and circumstances of the case and acted arbitrarily with prejudicially observation which were error unfounded or were not sustainable of giving rise to any adverse conclusion against the assessee in making the addition of Rs. 93,731/- u/s 40A(3) of the act. The Ld. AR, further, contended that the Assessing officer misrepresented himself invoking the provisions of Section 40A(3) of the Act and in not allowing exemption available for the assessee under Rule 6 DD (g), (j) & (k) of the Income Tax Rules, 1962. The Ld. AR vehemently contended that the assessing officer as well as the CIT(A) omitted to analyse the individual transactions and the plausible and acceptable explanation of the assessee that since cheques issued the Keshav Motors has bounced, the said supplier M/s Keshav Motors on certain occasions refused to provide diesel to out going vehicles and insisted for cash payment in lieu of the bounced cheques and therefore, the assessee ma....
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....ead with Rule 6DD of the Rules is not permissible until and unless assessee is able to substantiate that the payments so made falls under exceptions as stipulated in Rule 6 DD of IT Rules, 1962. The Ld. DR, further, contended that the payments made by the assessee company in cash exceeding the prescribed limit through its drivers of vehicles to the supplier i.e. Keshav Motors does not fall any exceptions as mentioned in Rule 6 DD of the Rules and therefore, action of the authorities below making addition of 20% of said payment is quite justified and deserve to be upheld. The Ld. DR also contended that the benefit of the ratio of the decision of Hon'ble Gujarat High Court in the case of Anupam Tele Services Vs. ITO, (2014) 366 ITR, 122 (Gujarat), as relied by the assessee, is not available for the assessee as in that cash payment was made by the agent of the assessee in the bank account of the principal was allowed which not the fact of the present case. 12. On careful consideration on above submissions, we note that the CIT(A) upheld the order of the AO with following observations and conclusions :- "4.1 I have carefully considered the submissions of the Ld. AR and perused th....
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.... by the assessee had bounced and the said supplier on certain occasions refused to provide diesel to out gone vehicles and insisted for cash payment in lieu of the bounced cheques and under these exceptional circumstances driver/person as accompanying the vehicle on some occasions had to make payment in cash. The 2nd contention of the assessee company is that the payment so made by the assessee exceeding prescribed limit prescribed by the Act falls under exception (g), (j) & (k) of Rule 6 DD of the Rules. 14. At the juncture, first of all, we respectfully consider the ratio of the decision of Hon'ble High Court of Gujarat in the case of Anupam Tele Services Vs. ITO (Supra) wherein it was held that where the principal company insisted that on the payment made by cheque supply would be deleted, then the cash payment made by the agent directly in the bank account on the principal had to be allowed. But we respectfully note that the benefit of the ratio of this decision is not available for the assessee as the facts and circumstances of the present case are clearly distinguishable as in the present case the assessee company is related to the impugned payments made to the supplier of....