2019 (5) TMI 1692

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....acts and in the circumstances of the case and as such the impugned additions made therein are liable to be deleted in the interest of justice. 2. For that, the learned C.I.T.(A) should not have confirmed the addition of Rs. 3,33,700.00 made by the learned A.O by applying section 40A(3) of the Act, ignoring the explanation and evidences of the Assessee which are self explanatory. The impugned addition being not sustainable in the eye of law, needs to be deleted in the interest of justice. 3. For that, the learned C.I.T.(A) has committed gross error of law as well as fact in confirming the addition of Rs. 3,33,700.00 U/s.40A(3) made by the learned A.O., particularly when, the cash payments were made due to business exigency ....

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....,750/- 02.01.2012 1382 Rs. 82,000/- Rs. 82,000/- M/s. Alankar Jewellers, Motiganj, Balasore. 09.05.2011 73 Rs. 17,992/- Rs. 27,992/- 71 10,000/- Do- 06.02.2012 475 17,489/- Rs. 34,978/- 448 17,489/- Do- 08.02.2012 453 17,000/- Rs. 34,000/- 455 17,000/- Do- 09.02.2012 456 15,000 Rs. 30,000/- 458 15,00/ Do- 10.02.2012 459 15,000- Rs. 30,000/- 461 15,000 Do- 11.02.2012 463 15,000 Rs. 30,000/- 464 15,000- Do- 13.02.2012 466 15,000/ 30,000/- 468 15,000/  Total: Rs. 3,33,720/-   5. The Assessing Officer observed that the payments were made in clear violation of section 40....

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.... the Hon'ble High Court has also taken support of the decision of Hon'ble Supreme Court in the case of Attar Singh Gurmukh Singh vs ITO, 191 ITR 667 (SC). 8. On the other hand, ld D.R. supported the orders of lower authorities. 9. I have heard the rival submissions, perused the materials available on the record of the Tribunal and orders of lower authorities. From the chart as reproduced above, it is clear that the payments were made to parties i.e. Epari Sadashiv Pvt Ltd., and M/s. Alankar Jewellery, Balasore. The assessee is in business of jewellery. It is not disputed that if an assessee incurs any expenditure in respect of which payment in excess of Rs. 20,000/- is made in a day to a single person, other than by an account payee c....