TaxTMI 
TaxTMI 
2017 (6) TMI 488
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....2017 filed seeking adjournment. The ld. AR of the assessee before us submits that the issue involved in this appeal is covered by an order dt. 29-02-2016 of ITAT Pune Bench, Pune and urged to dispose of the present appeal in terms of the said order. Therefore, on perusal of the record and the issue involved in this appeal is covered by the said decision as relied on by the ld.AR of the assessee proceed to hear the ld.AR and dispose of the same on the basis of material available on record and on merits. Therefore, the adjournment application dt. 1-5-2017 filed by the revenue is rejected. 3. The only issue in this appeal is to be decided by us as to whether the CIT has rightly exercised his jurisdiction u/s. 263 of the Act in declaring the....
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....der the Department of Electricity, Govt. of West Bengal. The Govt. of W.B is the owner of West Bengal State Electricity Distribution Company Limited (WBSEDCL) and submitted that there was no violation of S. 40A(3) of the Act. The CIT, however, not found acceptable the submissions of assessee. He observed that while declaring the assessment order is erroneous as well as prejudicial to the interest of revenue that the AO completely overlooked the payments made in cash to West Bengal State Electricity Distribution Company Limited (WBSEDCL) in the assessment proceedings and the said payments on different dates are in contravention of provisions of section 40A(3) of the Act and as such it did not fall under the exception provided under Rule 6DD(....
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....ubmissions as made before the CIT and also argued that the Government of West Bengal is the owner of West Bengal State Electricity Distribution Company Limited (WBSEDCL) and the issue is covered by exception provided under Rule 6DD(b) of the IT Rules 1962 r.w.s 40A(3) of the Act. In support of the contention, the ld.AR of the assessee placed his reliance on the order of the ITAT Pune Bench, Pune reported in (2016) 70 Taxmann. Com 7 (Pune) (Trib) in the case of Smt. Sapna Sanjay Raisoni Vs. ITO, Ward 2(1) Pune and submitted that the assessee therein has made cash payment exceeding Rs. 20,000/- for the purpose of purchase of scrap from MSRTC(Maharashtra State Transport Corporation, MSEB(Mahatrashtra State Electricity Board and other Governmen....
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....question arises before us for our consideration whether West Bengal State Electricity Distribution Company Limited (WBSEDCL) is a State amenable to the article 12 of the Constitution. The decision as relied on by the ld.AR of the assessee of the Co-ordinate Bench, ITAT Pune in the case of supra, the ITAT Pune has relied on the decision of the Hon'ble Supreme Court in the case of supra for the purpose of interpretation of expression of other authorities. The Co-ordinate Bench discussed the tests that if a state holds entire capital, control over the corporation can be a state agency or instrumentality of a state. If such corporation enjoys monopoly status and the functions of which are public importance can be termed as State instrumentality....
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....payments to MSRTC by the assessees, they are not disputed by the department. Once it has been held that MSRTC is a "State" within the meaning of Article 12 of the Constitution of India, the payments cannot be disallowed u/s.40A(3). The provisions of Rule 6DD would protect the assessee from such disallowance. The assessees have explained that cash payments have been made to MSRTC on successful bid of scrap auction. The payments are made in cash immediately to guard against the pilferage of scrap. Thus, cash payments are also made out of business expediency. Therefore, in our considered view, no ITA Nos.1270 to 1272PN/2014 and others of Raisoni Group disallowance can be made u/s.40A(3) in the facts of the present case. 16. Our view i....
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....the assessee to identify the person who has received the cash payment. Rule 6DD provides that an assessee can be exempted from the requirement of payment by a crossed cheque or crossed bank draft in the circumstances specified under the rule. It will be clear from the provisions of section 40A(3) and rule 6DD that they are intended to regulate business transactions and to prevent the use of unaccounted money or reduce the chances to use black money for business transactions." 17. In the case of Gurudev Garg Vs. CIT the Hon'ble Punjab & Haryana High Court has held that where genuineness of transaction made in cash in excess of Rs. 20,000/- was not disbelieved by the authorities, the same cannot be disallowed u/s.40A(3) of the Ac....