TaxTMI 
TaxTMI 
2020 (10) TMI 977
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....tation. The AO noted that the assessee in the name of M/s. Santoshimata Enterprise had made a purchase of Rs. 4,06,44,483/- from M/s. Supreme Industries, Kolkata and assessee had paid Rs. 2,07,52,802/- in cash on different dates. The AO reproduced the details of said cash payment of Rs. 2,07,52,802/- in his order at pages 2 to 4 from 01-04-2014 to 31-03-2015. According to the AO since there was violation of provisions of section 40A(3) of the Income-tax Act, 1961 (herein after referred to as the 'Act'), he gave/issued notice to the assessee and after being not satisfied with the reply given by the assessee was pleased to disallow the said amount. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), who was pleased to delete the same by relying on the decision of this Tribunal in the case of Sri Rampada vs. ITO, Haldia in ITA No. 67/Kol/2013 for the AY 2008-09 dated 07-10-2015. Aggrieved, the revenue is before us. 4. Shri Dhrubajyoti Ray, JCIT, Learned Departmental Representative (hereinafter referred to as the 'Ld. DR') vehemently assailing the impugned order of the Ld. CIT(A) contended that the Ld. CIT(A) has wrongly relied upon order of this Tribuna....
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.... crates, which is thereafter transported from Andhra Pradesh to Kolkata for selling the fish. The Ld. AR explained that since the payments for the plastic crates were given in cash by the farmers, there was risk to transport the cash back to Kolkata from A.P and therefore, the assessee deposited cash in the bank account of M/s. Supreme Industries. Therefore, the AO himself in his order clearly noted that "during the year, assessee has made the purchase from mainly-Supreme Industries. Against the aforesaid purchases, assessee has made the payment in cash by depositing money directly to the bank account of the aforesaid companies". Therefore, according to the Ld. AR the question of genuineness of the payment cannot be disbelieved and the AO himself has not doubted about the genuineness of such payment. It was pointed out by the Ld. AR that the Ld. CIT(A) therefore has also noted that "the genuineness of purchase, genuineness of payments in cash as well as the identity of the payee have not been disputed by the AO in any manner". According to the Ld. AR, this finding of the Ld. CIT(A) has not been challenged by the revenue while preferring this appeal specifically in its grounds of ap....
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....79 (Cal.) and CIT vs. Crescent Export Syndicate in ITA No. 202 of 2008 dated 30-07-2008 as well as other decisions cited therein that case. Therefore he does not want us to interfere with the order of Ld CIT(A). 8. Having heard both the parties, we note that the assessee is an individual, who is engaged in the business/trading of fish & fish food as well as sales of plastic crates as well as engaged in the business of running a petrol pump. We note that the AO found that the assessee has made payment in cash to the tune of Rs. 2.07 crores in its business of purchase of plastic crates to M/s. Supreme Industries. Therefore, he disallowed the expenditure claim of Rs. 2,07,52,802/- made by the assessee u/s. 40A(3) of the Act for the reason that there was no business expediency. The Ld. CIT(A) noted that the genuineness of purchase, genuineness of payments in cash as well as the identity of the payee have not been disputed by the AO. Therefore, by relying on the decision of this Tribunal in the case of Sri Rampada (supra) the Ld. CIT(A) was pleased to delete the addition. We note that the assessee is into the business of trading of fish & fish food as well as he trades plastic crates t....
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....sideration disallowance was made for the first time. And, thereafter, the Ld. Pr. CIT for the AY 2013-14 also interfered (vide order dated 26-03-2018) by exercising his revisional jurisdictional u/s. 263 of the Act(supra). We note that Tribunal in assessee's own case for the AY 2013-14 (supra) has modified the direction given by the Ld. Pr. CIT u/s. 263 of the Act to the AO and directed the AO not to disallow payments remitted to M/s. Supreme Industries u/s. 40A(3), if the same are genuine. We note that the ld. CIT(A) has given a clear finding that the genuineness of purchase, and, the genuineness of payments in cash as well as the identity of the payee have not been disputed by the AO in any manner. This finding of fact has not been challenged by the revenue by raising specific ground of appeal before us. However, taking into consideration, our own order in assessee's case though emanating from order passed under section 263 of the Act by the Ld. Pr. CIT, we would like the AO to examine the genuineness of expenditure and, if the AO find that the assessee made the deposits in the said bank account of M/s. Supreme Industries which practice the assessee has been consistently ....