TaxTMI 
TaxTMI 
2019 (7) TMI 928
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....o is a dealer in purchase and sale of land, had made cash payment of Rs. 9,00,000/- for the purchase of land which attracts the provisions of section 40A(3) read with Rule 6DD but the AO had not examined. 2. The assessee had claimed interest of Rs. 2,34,367/- on creditors for finance which the assessing office allowed without making any enquiry into the genuineness of the credits. 3. As per the AIR information, in the assessee's SB A/c with ING Vysya Bank, there was cash deposits of Rs. 24,90,000/-. However, the sales turnover of the assessee during the year was only Rs. 9,68,800/- and assessee had no other known sources for the cash deposits. The AO completed the assessment without carrying out any verification for the source of these cash deposits." 2.2 Aggrieved with the order of CIT, the assessee contested before Hon'ble ITAT, Hyderabad Bench 'A'. The Hon'ble ITAT passed an order in ITA No.936/HYD/2014, dated.18.02.2015 allowing grounds at (2) and (3) above. In respect of ground (1) concerning disallowance of Rs. 9,00,000 u/s 40A(3), the Hon'ble ITAT set aside the matter with a direction to examine whether the cash payments fall with....
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....0A(3) is not warranted. 10. I have considered the facts and explanation submitted by the assessee. The assessee lays stress on payment of sale consideration in cash in exceptional circumstances on 07-03-2009. And the entire explanation revolves around the same. But this is not correct. The cash payment was actually made on 02-03-I.T.A. No. 2401/Hyd/18 2009 and not on 07-03-2009. This sets aside the other claims of assessee put forth in justification of need of payment of sale consideration in cash on 07-03-2009. The fact is that the vendor N. Kesava Reddy executed a sale cum GP A on 2/3/2009 in favour of assessee for sale of land of Ac.0.62 cents in Sy.No.428 in Nunepalle Village, Nandyal, for a consideration of Rs. 9,00,000/-. From the recitals of the document it is evident that the sale consideration in cash was paid on the day of agreement itself, i.e., 02-03-2009 as acknowledged by vendor Kesava Reddy. It is only that registration took place in SRO's office, Nandyal, with Document No.120922/202092 on 7/3/2009 at 17.15 hours. Section 40A(3) is invoked in assessee's case for payment of sale consideration in cash of Rs. 9,00,000 on 02-03-2009. The second day of Ma....
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....n writing, the date and the name and address of the assessee-vendee in the document; v. The Vendor did not come on that day. vi. Vendor sent word on noon of7-3-2009 that he would come sometime in the evening of that day and demanded that the consideration should be paid in cash only for his urgent needs. vii. Then the assessee withdrew the amount from his bank account before closure of the banking hours and kept the amount ready; viii. Vendor came to the Registrar Office on 9-3-2009 in evening hours; ix. Vendor handed over his earlier document of the property and gave his address; x. The document writer filled all the blanks (except the date and the address of the assessee-vendee, which were filled up earlier) in the pre-printed document and the total schedule was written in hand, taking the details from the earlier document handed over by the vendor xi. The document was presented for registration between 4 PM. and 5 PM. after paying the necessary fee. 4.3.1 Thus, the learned Assessing Officer's statement that the document was executed on 2-3-2009 is not correct, though it was dated 2-3-2009. As submitted e....
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....the AO to delete the addition of Rs. 9,00,000/- made u/s 40A(3) of the I.T. Act, 1961." 6. Aggrieved by the order of CIT(A), the revenue is in appeal before us raising the following grounds of appeal: "1. The order of learned CIT(A) is erroneous both on facts and in law. 2. The learned CIT(A) erred in not taking cognizance of the Hon'ble ITAT directions and decision that "Hence, the Commissioner was justified on invoking the jurisdiction under section 263 of the Act. The AO must afford reasonable opportunity of being heard to the assessee in that matter". The assessee has reiterated the same events and facts which were already presented before ITAT, Ld. CIT and AO and were duly observed and orders were passed by representative authorities. As the assessee has not brought on record any new facts and/or evidences to prove his claim in the proceedings u/s. 143(3) r.w.s 254 even after affording reasonable opportunity of being heard and the learned CIT(A) erred in deleting the addition. 3. The learned CIT(A) erred in not taking cognizance of the Hon'ble ITAT directions to the AO to verify whether the cash payments are coming within exceptions of Rul....