TaxTMI 
TaxTMI 
2015 (10) TMI 246
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....e addition made by the A.0. Rs. 1,31,01,987/- invoking provisions of S. 40A(3) of the Act especially when the appellant had not maintained any regular books of account and no direct cash payments were made when appellant consistently submitted that the payments were covered by Rule 6DD(K) of I. T. Rules 1962. 2) On the facts and circumstances of the case and in law the disallowance made by A.0. of Rs. 1,31,61,987/- and confirmed by CIT(A) is contrary to law and without jurisdiction. The same be quashed. 3) On the facts and circumstances of the case and in law the A.0. collected the information by issuing notices to many persons under section 133(6) of the Act which information was collected on the back of the assesseeappellant and use....
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.... sales turnover exceeding Rs. 40,00,000/- per annum, the assessee was required to maintain regular books of account in accordance with the provisions of section 44AA(2) and also should have got the accounts audited in accordance with the provisions of section 44AB. On verification of the documents impounded during survey, it was found that the assessee had made cash payments exceeding Rs. 20,000/- for the purchases from a single party in a day during the relevant period. Majority of the payments were made in cash exceeding Rs. 20,000/- to M/s. Lunkad Brothers, Pune. Apart from M/s. Lunkad Brothers, the assessee had also made cash payments to various other parties exceeding Rs. 20,000/- for purchases in a single day. The Assessing Officer he....
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.... held at Amrutwadi i.e. the place of business of the assessee. That the representative of the suppliers of materials would visit the assessee on the weekly bazaar day, take order for supply of material for next week and collect the amount from the assessee for the material supplied in the earlier week. The representatives would collect the sale price of the material supplied in cash as the seller was not maintaining any bank account at or nearby the business place of the assessee. The payments in cash made by the assessee are covered by the provisions of Rule 6DD(k) of the Income Tax Rules. Since, the representatives of the seller would travel a long distance of about 90 kms from Pune to Amrutwadi to collect fresh orders for supply of mater....
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....sessee is not having bank account or there is no bank at the place of business of the assessee or the supplier of the material. The assessee never approached M/s. Lunkad Brother or the other parties to whom cash payments were made to deal through proper banking channels. Explanation furnished by the assessee for making cash payments does not fall within any of the exceptions given in Rule 6DD of the Income Tax Rules. In support of his submission the ld. DR placed reliance on the decisions rendered in the case of S. Venkata Subba Rao Vs. CIT reported as 173 ITR 340 (A.P.) and in the case of T G Mutha Vs. ITO reported as 54 ITD 460 (Pune). 6. We have heard the submissions made by the representatives of rival sides and have perused the orde....
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....an by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees in the cases and circumstances specified hereunder, namely: xxxxxxxxxx xxxxxxxxxx (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. We are of the considered view that the assessee does not fall within the exception given in Clause (k) of Rule 6DD. It is not the case of the assessee that the assessee or the suppliers of the materials are not having bank account. The exceptions in Rule 6DD are provided to mitigate the situations where, either of the parties to the transaction does not have the benefit of banking facilities or are....