TaxTMI 
TaxTMI 
2018 (3) TMI 1749
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....produced before the Assessing Officer recorded the correct facts and figures and were contrary to the earlier wrong statement furnished by the accountant. 3. There being no violation of the provisions of section/40(A)(3) it is prayed that the addition made may kindly be deleted. 2. The relevant facts in this case are that the assessee's return was picked up for scrutiny assessment through CASS wherein addition of Rs. 24,77,000/- was made u/s 40A(3). The addition was challenged in appeal before the CIT(A) unsuccessfully. Aggrieved by the order, the assessee is in appeal before the ITAT. 3. The ld. AR inviting attention to the assessment order submitted that the AO in the course of assessment proceedings required the assessee to explain payments made in cash stated to be in contravention of Rule 40A(3). The assessee in his reply at the first instance stated that there was an error on the part of the Accountant who while submitting the details had submitted wrong figures in the copy of account of M/s Spun Pipe Co. Pvt. Ltd. and in support of the said claim, copy of the account of the assessee in the company of M/s Chandigarh Spun Pipe in the name of M/s Nangal Spun Pipe C....
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.... 12. 01.09.2011 cash 50,000/- 13. 30.09,2011 cash 40,000/- 14. 05,10.2011 cash 70,000/- 15 26.10.2011 cash 1,00,000/- 16. 04,11.2011 cash 60,000/- 17. 18.11.2011 cash 60.WO/- 18. 01.12.2011 cash 64,000/- 19. 04.01,2012 cash 25,000/- 20. 12.01.2012 cash 1,60,000/- 21. 01.02.2012 Cash 1,50,000/- 22. 14.02.2012 cash 4,50,000/- 23. 02.03.2012 cash 2,00,000/- 24. 07.03.2012 cash 2,00,000/- 25. 26.03.2012 Cash 50,000/- Total Rs. 24,77,000/- 5.2 This fact was confronted to the assessee and, though the assessee was represented through counsel, frequently time was sought on various dates. These specific details are noted in page 11-12 of the assessment order. Finally on 20.03.2015 the reply of the assessee which is extracted in page 12-13 of the assessment order was made available. A perusal of the same shows that the assessee primarily stated that there was some mistake committed by the Accountant and the copy of the assessee's a....
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....nt that there was mistake by an Accountant remains un-substantiated and infact is shown to be not supported even in the explanation offered by the assessee in the facts of the present case. The explanation de-hors facts does not inspire any confidence what-so-ever. Accordingly, finding myself in agreement with the conclusion drawn by the CIT(A) in para 5 to appeal of the assessee is dismissed. For ready reference, relevant finding Amount paid in contravention of section 40 A(3) and its Entries with voucher numbers in which vouchers no, in the copy of account submitted on ethnetr y has been split-up in the changed 23.12.2014 of account of Chandigarh Spun Pipe Co. submitted on 20.02.2015 of the CIT(A) upholding addition made in the assessment order upheld in the present proceedings is reproduced hereunder : 5. On going through the entire set of facts of the case, the arguments put forth by the Assessing Officer and that of the appellant, I am of the opinion that addition has been correctly made by the Assessing Officer. The appellant produced one set of copy of accounts before the Assessing Officer and on being pointed out the defects which could lead to an addition u/s 40(A....
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....done to avoid the provisions of section 40A(3) of the Act. The original entry on 27.04.2011 is cash payment of Rs. 2,70,000/- and on 02.05.2011 & 07.05.2011 are cash payments of Rs. 50.000/-. In the revised account statement entry corresponding to 27.04.2011 has been split into 15 entries of denominations smaller than Rs. 20,000/- from 27.04.2011 to 13.05.2011 i.e. over a span of 17 days. But in between these were two more so called "consolidated" entries of Rs. 50,000/- each on 02.05.2011 and 07.05.2011 which have been split and moved to 14.05.2011 to17.05.2011 and 18.05.2011 to 20.05.2011 respectively. This argument of the appellant that the accountant consolidated these entries cannot be believed. If any prudent man would add up smaller figures to make a consolidated figure of Rs. 2,70,QOO/- then the next consolidated entry should appeared after the last unconsolidated entry which was part of the first consolidated entry. For example, if unconsolidated entries are in the order Rsl, Rs. 2, Rs. 3 and Rs. 4 and they are consolidated into two groups then consolidated entries would appear as Rs. 3 (1+2) Rs. 7 {3+4) in that order. While consolidating the order of entry would ....
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....ficer on page 32 of the order has made an observation that voucher numbers were not mentioned on the vouchers, while they were there in the account copies. The appellant has claimed that the Tally Account Software itself generates the voucher numbers. This part of the plea of appellant is correct. In Tally the primary document is the voucher in which voucher number is auto generated and once the voucher is filled, the ledger accounts gets automatically updated. It is not the other way- round. In the case of the appellant, manual vouchers have been made and then ledger account has been generated, which is not a normal procedure of maintaining account in Tally software. The website of Tally Solutions, www.tallvsolutions.com/ products /tallyerpa/functions features - accounting (accessed on 12.09,2016}, makes the following description of their product on its home page,"with the entry of a voucher all books of accounts, all reports, all totals and sub totals are updated instantly. There is nothing more that needs to be done -whether you are inserting a forgotten entry or correcting one." iv) The Assessing Officer rejected the affidavit of the accountant on pages 33-35 of the as....