TaxTMI 
TaxTMI 
2019 (10) TMI 1409
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....allowing purchases amounting to Rs. 19,30,605/- from M/s. Sumit Enterprises and Rs. 16,27,004/- from M/s. Paras Enterprises." 2. At the very outset, the ld. AR for the assessee submitted that he does not want to press the additional grounds, hence the same are dismissed as not pressed. 3. Briefly stated the facts necessary for adjudication of the issue at hand are : Assessee is a civil contractor engaged in the supply of labour and material to the Municipal Corporation of Delhi. Assessee disclosed the sale at Rs. 1,30,66,921/- and labour charges received at Rs. 60,56,537/- and shown the gross profit rate of 17.93% i.e. Rs. 34,28,369/-. From the perusal of bills, Assessing Officer (AO) noticed that the assessee has prepared computeri....
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.... payment of Rs. 19,30,605/- and Rs. 16,27,004/- to M/s. Sumit Enterprises and M/s. Paras Enterprises respectively were made by self cheque and not through account payee cheque. It is also not in dispute that section 40A(3) has come into existence w.e.f. April 1, 1968. 7. The ld. AR for the assessee contended that when identity of the parties and genuineness of the transaction was duly proved before ld. CIT (A), the provisions contained u/s 40A(3) are not attracted and relied upon the CBDT Circular No.6-P dated 06.07.1968 and Circular No.1/2009 dated 27.03.2009. Assessee also relied upon the decisions rendered by the Hon'ble High Court of Gujarat in Anupam Tele Services vs. ITO (2014) 43 taxmann.com 199, coordinate Bench of the Tribunal in ....
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....ipur and she had opened a bank account to facilitate quick transfers of money from bank to its dealer to satisfy the conditions of section 40A(3). She had left the signed cheque. book also in possession of the dealer so that the cash was transmitted in the assessee's bank account and he could receive the payments through cheques. It was apparent that the assessee had done all that she was required to do. The modus operandi of the assessee was accepted by the Tribunal while considering the question of the cash credit that deposit of each receipt of the cash money from its customers separately was not conducive to the type of the business which the assessee was running. Moreover, the assessee and the principal dealer had struck a way out ....
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.... of account of the assessee and the Assessing Officer has not pointed out any defect in the said transactions. It is the say of the ld. counsel for the assessee that the Assessing Officer has neither doubted the genuineness of the transaction nor he has doubted the identity of the payees. Therefore, mechanical invocation of provisions of section 40A(3) of the Act is uncalled for and the additions should be deleted. 20. Per contra, the ld. DR strongly supported the findings of the Revenue authorities. It is the say of the ld. DR that application of section 40A(3) is mandatory and if there is a violation of the said provision, then, the Assessing Officer is bound to make additions as per law. 21. We have given thoughtful consideration to ....