2022 (12) TMI 176

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....ACIT, Non- Corporate Circle 4(1), Chennai for the assessment years 2012-13 & 2013-14 u/s.144 r.w.s 147 of the Income Tax Act, 1961 (hereinafter the 'Act') vide orders dated 28.03.2016 & 28.12.2016 respectively. 2. The first jurisdictional issue raised by assessee in ITA No.3498/Chny/2018 for assessment year 2013-14 is by way of additional ground that no mandatory notice u/s.143(2) of the Act had never been issued by the AO and hence, the assessment is bad in law. For this, assessee has raised the following two additional grounds:- "1. The CIT(A) ought to have cancelled the assessment as the mandatory notice u/s.143(20 had never been issued by the AO in the course of assessment proceedings in the light of Asst CIT vs. Hotel Blue ....

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.... the issue and facts are identical and grounds raised by assessee are also identical, we will take the facts and grounds from assessment year 2012-13 in ITA No.3497/Chny/2018. The relevant grounds raised by assessee read as under:- 2. The Commissioner of Income Tax (Appeals) erred in upholding the action of Assessing officer disallowing a sum of Rs.22,14,69,841/- u/s.40A(3) of the IT Act. 3. The Commissioner of Income Tax (Appeals) ought to have considered the fact that the cash payments made relate to agricultural produce which falls under the purview of Rule 6DD(e) and disallowance u/s.40A(3) is not warranted. 4. The Commissioner of Income Tax (Appeals) failed to consider the facts of the case and the submission....

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....n 13-11-2013, you have also confirmed the above fact as under: Ans.As far as oil purchase is concerned no credit is given by the suppliers. Payment has to be made then and there. For S.V.S. Oil Mills, I have to make only cash payment for purchases. Others accept payments through RTGS Remittance. All Dhall purchases are made through brokers and only cash payments are made. As far as sale is concerned, 85% is only cash sales. From S.V.S.Oil I have started purchasing only from last month and Dhall purchases I have been doing for nearly two years. What do you say in this regard? Yes. I confirm the above statement. I made only cash payments for purchase of Dhall. Q.9. During the F.Y.11-12 relevant to the A. Y.....

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....ne through the provisions of section 40A(3) of the Act, which is applicable from 01.04.2009 as substituted by the Finance Act, 2008, which reads as under:- "(3) Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed, exceeds ten thousand rupees, no deduction shall be allowed in respect of such expenditure." In view of the above provision of sub-section (3) to section 40A which has been amended w.e.f. 01.04.2009 by the Finance Act, 2008 provides that the provi....