2022 (11) TMI 666

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....o. 1 is general in nature and therefore requires no specific adjudication. 3. The issue raised in ground nos. 2 and 3 is against the confirmation of addition of Rs. 23,17,568/- by ld CIT(A) as made by the AO u/s 40A(3) of the Act by ignoring the facts that none of the payments to any individual/entity exceeded Rs. 20,000/-. 4. Facts in brief are that during the course of assessment proceedings, the AO observed that the assessee is deriving income from contractual work and has made following payments exceeding Rs. 20,000/-. Accordingly a show cause notice was issued dated 02.12.2016 calling upon the assessee to explain as to why the payments exceeding Rs. 20,000/- should not be disallowed in consonance with the provisions of Section 40....

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.... 7. The Ld. D.R. on the other hand, submitted that ceiling for making payment was Rs. 10,000/- during the year and not Rs. 20,000/- as argued by the ld. Counsel for the assesse and therefore the Ld. D.R submitted that payments were above Rs. 10,000/- and admittedly below Rs. 20,000/- and were rightly disallowed by the AO and confirmed by the Ld. CIT(A). 8. In the rebuttal, the Ld. Counsel for the assessee took us through the provisions of Income Tax Act thereby controverting the point made by the Ld. D.R and submitted that the ceiling of ten thousand was provided by Finance Act, 2017 w.e.f 01.04.2018 and prior to that ceiling for cash payment was twenty thousands. The Ld. A.R therefore prayed that the issue may kindly be decided accord....

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....m Mousum Hardware and Paras Aluminium, the AO noted that closing balances as on 31.03.2014 stood at Rs. 150,709/- and 5,44,000/- respectively whereas as per the books of account of the assessee the outstanding balances were Rs. 360,457/- and Rs. 734/- respectively as on that date resulting into difference of Rs. 7,53,014/- which was informed to the assessee vide letter dated 02.12.2016 but assessee did not reply the same and finally it was added to the income of the assessee. 13. Similarly ground no. 5 the assessee has challenged the confirmation of addition of Rs. 2,53,314/- by the Ld. CIT(A) on account of closing balance difference of sundry creditor i.e. Mondal Enterprise and similarly ground no. 6 , the addition of Rs. 10,06,328/- wh....

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....s that the purchases were duly discharged by account payee cheques drawn on HDFC Bank which were duly presented for payment. We also note that the last payment made by cheque of Rs. 62,880/- on 23.03.2014 was presented in the bank on 06.05.2014 and closing balance of Rs. 2,53,314/- was also outstanding at the year end. Therefore we do not find any discrepancy in the ledger account and the payments made to this supplier as all bills were paid by account payee cheques. So in view of these facts the order of Ld. CIT(A) confirming the additions cannot be sustained. In respect of Mousam Hardware and Sanitary a copy of which is filed at page no. 182 of PB and bills and vouchers are placed from page nos. 185 to 299 of PB, we note that the said fir....