2016 (5) TMI 1502

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....CIT(A), Bathinda has erred in confirming the addition of Rs. 20,02,000/- made by the AO for violation of the provisions of section 40A(3) of the I.T. Act, 1961 without appreciating: a) the fact that cash payments of Rs. 20,02,000/- were made for purchase of immovable properties held as stock-in-trade without doubting the genuineness and bona fide of such transactions. b) that the sellers of the properties were stranger to the assessee and they insisted on cash payment and in an effort to mature the deals, the assessee was compelled to make cash payments which were genuine and bona fide and these also stood duly corroborated by the Sub-Registrar, Bathinda. c. that the cash payments were made due to business exigency. d. that alth....

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....mind and affording reasonable opportunity, made an addition of Rs. 20,02,000/- which was not warranted on merits of the case. The same was confirmed by the ld. CIT(A). 3. At the outset, the ld. counsel for the assessee has placed reliance on the decision of the Hon'ble High Court of Punjab & Haryana, in the assessee's own case for the assessment year 2009-10, wherein, in ITA No.413(Asr)/2014, vide order dated 16.07.21015, under similar circumstances, the matter has been decided in favour of the assessee. 4. On the other hand, the ld. DR has strongly relied on the impugned order. 5. Having heard the rival contentions in the light of the material placed on record, it is seen that that by virtue of the impugned order, the ld. CIT(A) conf....

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....ck by the provisions of section 40A(3) of the Act despite the transaction being genuine and bonafide. Respectfully following the order of the Hon'ble Tribunal, the action of the A.O. in making the addition of Rs. 20,02,000/- is confirmed. Accordingly, the appellant's grounds of appeal dealing with this issue stand rejected." 6. Thus, it is seen that the ld. CIT(A) followed the decision of the ITAT, Amritsar Bench, in the assessee's own case for the assessment year 2009-10. It is this order of the Tribunal, which has been set aside by the Hon'ble Punjab & Haryana High Court, while observing as follows: "9. At the cost of repetition, the Tribunal has not disbelieved the transactions or the genuineness thereof. Nor has it disbelieved the ....