AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 607
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.... 2013-14. 2.The appeal has been filed raising the following substantial questions of law:- "1) Whether on the facts and circumstances of the case, the Tribunal was right in law in holding that the cash transactions amounting to Rs. 34,68,15,452/- were not allowable under Section 40A(3) of the Act? 2) Whether the Appellate Tribunal was right in disallowing the expenditure even though both the payee and payer are identified and the TCS has been collected by the seller? 3.The asseessee, an individual, filed his return of income for the assessment year under consideration (2013-14) on 30.11.2014 admitting a total income of Rs. 9,23,600/-. The case was selected for scrutiny and notice under Section 143(2) of the Act was i....
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....collected 1% tax at source. The assessee further submitted that the Company had received only a document in support of his claim. 4.The Assessing Officer referred to Section 40A(3) of the Act stated that the assessee had made cash payments in excess of Rs. 20,000/- towards purchase of old gold ornaments through bidding process from the said Finance Company and the said provision is squarely attracted to the assessee's case and accordingly issued show cause notice dated 18.03.2016. The assessee submitted a reply stating about the nature of transaction done by him, how a syndicate of bidders ranging from 10 to 25 persons would be formed and after successful bidding by the assessee, he will collect from each of the members of the syndic....
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....tional and unavoidable circumstances while making cash payments by the assessee at the insistence of the payee. The assessee further stated that when the payee and payer are identified and the genuineness of the payments were established, the amount paid by cash could not be disallowed. In support of such claim, the assessee placed reliance on the decision of this Court in the case of Commissioner of Income Tax vs. Chrome Leather Co. Pvt Ltd. reported in 235 ITR 708. The assessee also referred to the other decisions of the other High Courts ad the Hon'ble Supreme Court to justify his stand. The CITA by order dated 28.11.2016 dismissed the appeal and in doing so held that Section 40A(3) of the Act is applicable to the facts and circumsta....
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....by the assessee was genuine and the parties are identifiable. Further, the other factual aspects which were pointed out by the assessee before the Assessing Officer, the CITA and the Tribunal were highlights by the learned counsel. The method of transaction was explained and as to how the highest bidder should immediately deposit part of the auctioned amount with the auctioneer and since the assessee wuld not know as to how much amount has to be deposited, no bank draft could be obtained by the assessee. Therefore, it is contended that Section 40A(3) of the Act would not be attracted. 7.Mr.Karthik Ranganathan, learned Standing Counsel for the revenue sought to sustain the orders passed by the Assessing Officer as confirmed by the CITA an....
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.... Once again before the Tribunal, the facts were re-examined and the Tribunal pointed out that the assessee failed to demonstrate that the conditions of the bid required the assessee to effect payments in cash then and there and payments could not have been made by cheque or Demand Draft or any other mode. The Tribunal pointed out that there is no explanation as to what stopped the assessee from effecting payments through banking channel. Further, the Tribunal found that the agreement with syndicate members, if any, was not produced by the assessee before the lower authorities or before the Tribunal. Further the Tribunal held that the assessee could not demonstrate that he was representing any syndicate nor he could demonstrate that he wa....