TaxTMI 
TaxTMI 
2015 (4) TMI 792
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....come Tax Act, 1961 [Act] when conditions precedent to invoke foregoing section are not satisfied in Appellant's case. 2. CIT(A) further erred in this connection holding that:- a) there is no material to show that AO propose to examine issue by applying provisions of section 40A(3); b) AO had not applied his mind to applicability of section 40A(3); c) assessment order dated 17.12.2009 was not passed after due application of mind by AO; d) assessment record does not contain written reply of Appellant in response to section 154 notice dated 31.05.2010; and e) view taken by AO does not constitute one possible view. 3. Appellant craves leave to add to and/or amend and/or delete and/or modify and /or alter the aforesaid revis....
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....ght Carrier Cash 48953 Shree Balaji Roadlines (India) Ltd. Cash 273742 Bombay Gobindgarh Roadways Cash 1062439 Jagjeet Goods Carriers Cash 29370 Guruteg Bahadur Transport Co. Cash 18970 Sai Transport Corporation Cash 62499 Khalsa Roadways Cash 149337 Bombay Gujrat Transport Service Cash 162144 New Shukla Freight Carriers Cash 60774 Charu Transport Company Cash 27170 Total 5002427 As mentioned in the assessment order, the AO has verified the bills and vouchers relating to the transport expenses which were voluminous in nature. After detail scrutiny and verification, he noted that some of the transport expenses are not fully supported wit....
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....used to make payment to the truck owners or the driver at the time of taking the delivery of goods as they insisted upon cash payment for incurring the transportation expenses like diesel, food etc. It was also submitted that the legal position of section 40A(3) as it stood the A.Y. 2007-08 was that, if the payment of a cash is less than 20,000/-, then no disallowance is called for. The aggregate payment of Rs. 20,000/- in a day has been brought in the statute w.e.f. 01.04.2009, i.e. A.Y. 2009-10 and for the prior assessment years, if the payment at a time is less than 20,000/- then it was not a breach of the provision of section 40A(3). Besides this various legal submissions on revisionary jurisdiction and scope of section 263 was made. An....
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....ar as it is prejudicial to the interest of revenue. This assessment order is therefore set aside and the AO is directed to redo the assessment by applying the provisions of section 40A(3) of the Act to the aforesaid expenditure of Rs. 50,02,427/- after giving opportunity of hearing to the assessee. 5. Before us, learned counsel for the assessee submitted that during the course of the assessment proceedings, the assessee had furnished the entire party-wise details of transport charges along with the original bills which is evident from letter dated 23.10.2009 filed before the AO during the course of the assessment proceedings. [copy of which is appearing at page 37 and 38 of the paper book]. Besides this, the assessee had also filed the d....
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....R 282 (SC) and Bombay High Court decision in the case of Ranka Jewellers Vs. Additional CIT reported in (2010) 328 ITR 148 (Bom). Thus, he submitted that impugned order passed by the Ld. CIT should be quashed. 6. On the other hand Ld. DR strongly relied upon the order of the Ld. CIT and submitted that AO has not made any specific inquiry or raised a query regarding applicability of section 40A(3), which is apparent when the payments have been made in cash. The Ld. CIT has only set aside the assessment order for examination only and therefore, there is no error in the order of the CIT. In support of his contention, he relied upon the decision of Kerala High Court in the case of P.V. Sreenijin Vs. CIT reported (2014) 47 taxman.com 61, wher....
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....annot be held that AO has not made any enquiry or verified the evidences. If on verification the assessing officer has taken a view, then same cannot be substituted by the CIT, that disallowance should have been made excess by applying different provision, unless there is a categorical finding by the CIT that the view taken by the assessing officer or his opinion is unsustainable in law. This has to be demonstrated from the facts and material on record by the CIT. Here in this case, the Ld. CIT has not pointed out that there is any actual violation of section 40A(3) as per the law prevalent in the A.Y. 2007-08. Prior to A.Y. 2009-10, section 40A(3) provided that, where the assessee incurs any expenditure in respect of which payment is made ....