2018 (12) TMI 1691

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.... relevant bills & vouchers produced noted that there is payment of cash for purchase which were in violation of section 40A(3) of the Act and that there were purchases made by assessee out of books which were not recorded. So the AO called for the inspector's report & after perusing the report of the inspector and reply of assessee was pleased to hold that the purchase of eggs of Rs. 7,21,803/- was bogus. Therefore, the AO treated the sum of Rs. 7,04,478/- as bogus purchase u/s. 69C of the Act. On appeal, the Ld. CIT(A) confirmed the action of AO. Aggrieved, assessee is now in appeal before us. 3. We have heard rival submissions and gone through the facts and circumstances of the case. Facts are not repeated again for the sake of brevity.....

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....d circumstances of the case for the interest of justice in this case. Therefore, this ground of appeal of assessee is partly allowed. 4. Ground no. 2 of assessee's appeal is against the action of Ld. CIT(A) in confirming the addition of Rs. 4,26,021/- made by the AO on account of cash purchases. Briefly stated facts are that the AO on examination of the purchase ledger and the copies of the relevant bills and vouchers produced found that the assessee had made payment to M/s. Paul Egg Centre of Rs. 4,26,021/- in cash in violation of sec. 40A(3) of the Act. Accordingly, AO issued a show cause letter dated 20.09.2017 as to why the above cash payments and the purchase not reflected in the books of account be not disallowed u/s. 40A(3) and u/s....

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.... of M/s. Paul Egg Centre Shri Dipak Paul and duly noted by AO while framing the assessment order. So the genuineness of the cash payment to procure egg for trade of assessee from M/s. Paul Egg Centre is not disputed. In such a scenario, the Ld.AR relied upon the decision of Hon'ble High Court of Calcutta in the case of CIT vs Crescent Export Syndicate in ITA No.202 of 2008 order dated 30.07.2008 wherein it was held as under:- "It also appears that the purchases have been held to be genuine by the learned CIT(Appeal) but the learned CIT(Appeal) has invoked section 40A(3) for payment exceeding Rs. 20,000/- since it is not made by crossed cheque or bank draft but by bearer cheques and has computed the payments falling under provisions of se....