2017 (9) TMI 1895

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.... 2. The next ground is with regard to invalidity of statement recorded u/s.131 from Mr. Stephen John by DDIT(Inv) Kochi on 26.3.2015. 3. The next ground is with regard to addition of Rs.2,15,00,000/- as profit from transacting in Velachary property. 4. The next ground is with regard to disallowance of Rs.2,90,00,000/- u/s.40A(3) in respect of payments made in respect of Transaction in Velachery property.  The Commissioner of Income-tax(Appeals) erred in holding that any payment in cash in excess of Rs. 20,000/- would attract disallowance u/s.40A(3), whereas the section prescribes disallowance, only if the payments are made towards an expenditure.  The Commissioner of Income-tax(Appeals) err....

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.... 9. The appellant had produced cash book to explain the source of cash deposits in bank account. The Appellant had given explanations to Rs. 77,00,000/- credited to the cash book. If the explanations are not satisfactory, the addition has to be restricted to Rs. 77,00,000/-." 3. The facts of the case are that the assessee declared a total income of Rs.3,08,330/- in the original return of income filed on 30.5.2012 for the AY 2012-13. On the 16th day of March 2012, a deed of sale was executed by Shri Stephen John and four others in favour of ITC Ltd. for a consideration of Rs. 17.80 crores. Out of the sale consideration of Rs. 17.80 crores, Shri Stephen John was paid an amount of Rs. 8 crores on 14.3.2012 by Pay Order No.517909. The o....

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....income of Rs.6.80 crores is enumerated in the assessment order. 3.3 The assessee had received a sum of Rs. 4.50 crores from six parties, while the balance of 18 parties stated to have received Rs. 2,14,95,000/- totaling to Rs. 6,64,95,000/- and the difference of Rs.15,05,000/- was additionally offered to tax in the revised return filed on 31.3.2014. 3.4 The AO, on examination of the accounts and the veracity of the claims did not accept the nexus between the payments and the receipts and therefore, the entire expenditure relating to six parties of Rs. 4,50,00,000/- and in respect of the balance, an amount of Rs. 1,61,21,250/- was found to be ineligible as deduction and the same was added to the taxable income. On a total claim of Rs. ....

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....ince the genuineness of the claim did not stand the litmus test, the AO had to resort to the addition. 3.6 The ITS data exhibited that the assessee had deposited Rs. 40 lakhs, Rs. 35 lakhs and Rs. 20 lakhs in Axis Bank in mode of cash on 28.12.2011, 31.12.2011 and 02.01.2012, summing up to Rs. 95 lakhs. The explanation provided by the assessee with regard to the sources was found to be unsatisfactory and thus an amount of Rs. 95 lakhs was added separately u/s.68 of the Act. As a result, the taxable income got enhanced to Rs. 7,29,75,896/- and a resultant tax demand Rs. 2,99,57,050/-. Aggrieved, the assessee went in appeal before the CIT(Appeals), who partly allowed the appeal of the assessee. Against this, the assessee is in appeal befor....

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....mitted that there is no protest by the assessee at the time of assessment proceedings and the assessee actively participated during the course of assessment proceedings, now the assessee raised such ground before this Tribunal, which is to be dismissed. 7. We have heard both the parties and perused the material on record. In our considered opinion, there should not be any grievance to the assessee.There being due opportunity of hearing has been given to the assessee. Even if there is any lapse on the part of the AO, it is only procedural ir-regularity, the provision of Sec.292BB of the Act takes care of it. More so, jurisdictional High Court in the case of Areva T&D India Ltd. vs. ACIT reported in (2007) 294 ITR 0233 wherein held that no....