TaxTMI 
TaxTMI 
2018 (3) TMI 429
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....ssee and ld A.R. of the assessee appeared and case was discussed. 4. During the course of assessment proceedings, the Assessing Officer found that the assessee has made purchases from M/s. Stock Point, Prop. Uprendra Nayak, Puri. The Assessing Officer verified the ledger account of the assessee and found that the assessee has made payments exceeding Rs. 20,000/- and the provisions of section 40A(3) of the Act are violated. The Assessing Officer recorded the statement of the assessee u/s.131 of the Act. The above statement was verified from Sri Upendra Nayak, Prop. Of stock Point, Puri who has confirmed to have received Rs. 70,50,839/- in cash from the assessee and no payment is received in cheque/draft. Sri Upendra Nayak also confirmed the tally of the sales figures with the purchases by the assessee and difference in amount entered in the assessee account. Considering the over all aspects of sales and purchase, the Assessing Officer observed that the assessee's case does not fall within the exceptional circumstances as provided under rule 6DD of I.T.Rules, 1962 and assessee has violated the provisions of section 40A(3) of the Act and made an addition of Rs. 53,13,007/- and pass....
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....sions, perused the records of the case and orders of lower authorities. In the present case, the assessee is engaged in dealings in mobile recharge vouchers on a wholesale basis and retail basis. During the assessment year under consideration, the assessee made purchases of recharge vouchers from M/s. Stock Point, Puri and the Assessing Officer verified the ledger account of the assessee and found that a large number of payments exceeding Rs. 20,000/- were made in cash in contravention of the provisions of section 40A(3) of the I.T.Act, 1961. The Assessing Officer recorded the statement of Shri Upendra Nayak, Prop. Of M/s. stock Point Puri and who has confirmed sales of recharge vouchers of Rs. 70,50,839/- to the assessee and receipts of cash sales but the Assessing Officer found there is variation in the recording of entries in assessee's ledger and the assessee has violated the provisions of section 40A(3) of the Act and the CIT(A) confirmed the findings of the Assessing Officer. We find that provisions of Section 40A(3) of the Act prescribes that no deduction shall be allowed in respect of an expenditure for which payment is made to the other person otherwise than by way of an a....
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....in), came to conclude that in such like transactions, there was only a relationship of a principal and agent and therefore, there was no question of any purchase being effected by the latter and accordingly the Bench concluded that there was no question of allowance of any expenditure in respect of purchases qua which the provisions of section 40A(3) of the Act could apply, irrespective of the mode of payments. The following discussion in the order of the Tribunal is relevant :- "4.1 We would firstly deal with the case law cited by the assessee, as if its case is covered by the principles laid down there-under, it would stand to succeed. In the case of Eastern Condiments Pvt. Ltd. (supra), the assessee found favour with the Hon'ble jurisdictional High Court in view of the provision of rule 6DD(j) of the Rules, which provided that where the assessee satisfied the Assessing Officer that the payment(s) could not be made by crossed cheque drawn on a bank or a crossed bank draft due to exceptional or unavoidable circumstances or because the payment in the manner aforesaid was not practical, or would have caused genuine difficulty to the payee, having regard to the nature of....
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....tenable in the eyes of law, since the assessee had obtained the audit report in time but failed to file the same along with return. According to the learned A.R. the only technical breach has been committed by the assessee which is exoneroble under the given facts and circumstances of the case. 13. Ld A.R. filed before us the income tax returns for the assessment years 2012-13 and 2013-14, in which the assessee has declared the commission in the return filed. He also relied on the decision of Delhi Bench of the Tribunal in the case of Anoop Kumar Beri vs ACIT, 97 TTJ 275 (Del), wherein, the facts were that the assessee was charging commission from truck owners and was under bonafide belief that such receipts were not to be included for the purpose of determining the obligation of audit under section and the department has imposed penalty u/s.271B of the Act. The Tribunal observed that bonafide belief of the assessee constituted a reasonable cause for not getting the accounts audited and, deleted the penalty imposed u/s.271B of the Act. 14. Contra, Ld D.R.relied on the orders of the authorities below and further submitted that the assessee did not obtain the requisite report w....