TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 321
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....eave the place for a foreign trip, he offered Rs. 30 lakhs as income without applying his mind, at the time of inspection. It was also stated that the sworn statement was given in a confused state of mind in the situations prevailed at his residence. However, the Assessing Officer overlooking the retraction, made addition of Rs. 30 lakhs on the basis of sworn statement recorded on 25.3.2009. Aggrieved, the assessee went in appeal before the CIT(Appeals). 4. On appeal, the Commissioner of Income-tax(Appeals) confirmed the finding of the Assessing Officer on the reason that the assessee stated in the sworn statement as follows: "My accounts have to be finalised for the last F.Y. i.e. A.Y. 2009-10. From your findings of the loose sheets of bills found in my premises. I can only say that all these are accounted, however, I am ready to offer total income of Rs. .30,00,000/- and I am ready to pay the tax on or before 31.03.09" According to the Commissioner of Income-tax(Appeals), the above statement shows that the assessee had admitted an income of Rs. 30 lakhs during the course of survey and the assessee pleaded that further stock need not be taken as he was in a hurry to board a f....
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....e made only on the basis of sworn statement recorded without any support of corroborative material. The admission of the assessee in the sworn statement recorded u/s.133A of the Act is not a conclusive evidence. Further, it was held by the Supreme Court in the case of Pullangode Rubber Produce Co. vs. State of Kerala And Anr. (91 ITR 18), that an admission is extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the person who made the admission to show that it is incorrect. In the case of Saveetha Institute of Medical and Technical Sciences v. ACIT (2011) [12 (Trib) 376] (Chen), wherein addition towards capitation fee allegedly collected by the institute was made solely on the basis of statement of students and staff recorded under sec.132(4) was made. Except for a note giving the breakup of number of students who were admitted under different quo0tas in various courses, there was no incriminating material as to the receipt of capitation fee. Referring to the Instruction No.286/2/2003-IT(Inv.II) dated 10.3.2003 addition deleted after observing that admission made u/s.133A was not a valid evidence. Therefore, it is well settled judicial pr....
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....f appeal of the assessee is allowed. 8. Next ground in this appeal is with regard to confirming the additions of Rs. 19,46,899/- and Rs. 14,34,188/- made u/s.40A(3) of the Act. 9. The assessee made the payment of Rs. 15,34,188/- to one Shri Dhakshinamoorthy and another payment of Rs. 20,46,899/- to one Shri Ramanthan. Summons u/s.131 of the Act were issued to them and they were appeared before the AO. They are trading in copra and both of them have bank accounts. Shri Dhakshinamoorthy is having bank account with Tamil Nadu Mercantile Bank and Shri Ramanathan is having bank account with Syndicate Bank. Both of them have agricultural lands in addition to trading activity. They informed that they used to receive the payments by cash as per the bills in single payment. Though they are doing some agricultural operations, they are mainly copra traders. Thus, the AO invoking the provisions of sec.40A(3), disallowed a sum of Rs. 14,34,188/- out of Rs. 15,34,188/- in respect of Shri Dhakshinamoorthy and Rs. 19,46,899/- out of Rs. 20,46,899/- from Shri Ramanathan. On appeal, the CIT(Appeals) confirmed the finding of the AO. 10. The ld. AR submitted that the CIT(Appeals) failed to apprecia....
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.... banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949); (ii) the State Bank of India or any subsidiary bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959). (iii) any co-operative bank or land mortgage bank. (iv) any primary agricultural credit society or any primary credit society as defined u/s. 56 of the Banking Regulation Act, 1949 (10 of 1949). (v) the Life Insurance Corporation of India established u/s. 3f of the Life Insurance Corporation Act, 1956 (31 of 1956). (b) where the payment is made to the Government and under the rules framed by it, such payment is required to be made in legal tender: (c) where the payment is made by - (i) any letter of credit arrangements through a bank; (ii) a mail or telegraphic transfer through a bank; (iii) a book adjustment from any account in a bank to any other account in that or any other bank; (iv) a bill of exchange made payable only to a bank; (v) the use of electronic clearing system through a bank account; (vi) a credit card. (vii) a debit card. Explanation - For the purposes of this clause and clause (g), the term....
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.... authorized dealer or a money changer against purchase of foreign currency or travelers cheques in the normal course of his business. Explanation - For the purposes of this clause, the expressions "authorized dealer" or "money changer" means a person authorized as an authorized dealer or a money changer to deal in foreign currency or foreign exchange under any law for the time being in force." 12. From the above provisions, it is clear that in order to fall within the exemption clause, the assessee has to make payment in excess of Rs. 20,000/- by account payee cheque or by demand draft. The assessee shall prove that it would have caused genuine difficulty to the payees having regard to the nature of transactions. The assessee shall prove with evidence to the satisfaction of the AO and establish the genuineness of the payment and identity of the payees. Therefore, the burden of proving the above conditions as stipulated under Rule 6DD by furnishing the necessary evidence is obviously on the assessee. 13. In the present case, the AO identified the parties i.e. Shri Dhakshinamoorthy and Ramanathan, to whom the payments were made by the assessee in violation of sec.40A(3) of the Ac....