TaxTMI 
TaxTMI 
2023 (5) TMI 1372
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....lying the decision of Hon'ble ITAT Panji Bench in the case of Prathamik Krishi Pattinsahkari Bank Ltd vs Income Tax Officer, ward 1(3), Belgaum 55 taxmann.com 412, even though the facts of the case are distinguishable. 3. That on the facts and circumstances of the case and in law, the CIT(A) erred in not following the decision of Hon'ble Kolkata Tribunal in the case of M/s Bolkunda Packwai & (S) C vs ITO, Ward 1(1), Asansol (ITA No. 462-463/Kol/2016), where the facts of the case are similar to the case of the appellant. 4. The appellant craves to add, alter or delete any of the grounds of appeal during course of appellate proceedings." 2. Succinctly stated, the assessee is an individual holding FL-2 license on behalf of his partnership firm viz. Juneja Ventures, which is engaged in the business of running a restaurant under the name and style of "Mocha Restaurant" at VIP Road, Raipur. The assessee had filed his return of income for A.Y.2018-19 on 13.10.2018, declaring an income of Rs.7,22,540/-. 3. Income of the assessee was processed by the CPC, Bengaluru u/s.143(1) of the Act dated 26.08.2019, where in after making a disallowance of Rs.57,62,920/- u/s.40A(3) of the ....
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...., i.e. payment made by the assessee in a manner other than that prescribed u/s. 40A(3) of the Act, therein, vide its letter dated 21.01.2019 communicated to the assessee a proposed disallowance of the aforesaid amount of Rs.57,62,920/- (supra), and called upon it to show cause within a period of 30 days as to why said adjustment may not be carried out. For the sake of clarity, the relevant extract of the aforesaid communication dated 21.01.2019 issued by the CPC, Bengaluru a/w. "annexure" is culled out as under: On a perusal of the aforesaid communication of the CPC, Bengaluru, it transpires that the assessee was specifically allowed a time period of 30 days to respond to the aforesaid proposed adjustment u/s. 143(1)(a) of the Act. In fact, it was specifically stated at Note-4 that the response of the assessee if received within stipulated time period would be considered before making any adjustment. 8. In response to the aforesaid communication received from CPC, Bengaluru dated 21.01.2019, the assessee vide its rely uploaded on 24.01.2019 (18:57:41) objected to the aforesaid proposed adjustment. It was categorically stated by the assessee that as the expenditure incurred was t....
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....in violation of the provisions of Section 40A(3) of the Act, therefore, the CPC, Bengaluru had rightly disallowed the amount and made a consequential adjustment in the hands of the assessee u/s.143(1)(a) of the Act. However, the Ld. DR on being confronted with the fact that the response filed by the assessee, wherein he had categorically objected a/w. reasons to the proposed adjustment had been summarily brushed aside by the CPC, Bengaluru, which had proceeded with and disallowed the aforesaid amount vide its intimation u/s.143(1) dated 26.08.2019, could not rebut the same. 11. We have given a thoughtful consideration to the issue involved in the present appeal, and find substance in the claim of the Ld. AR that the adjustment made by the CPC, Bengaluru vide its intimation u/s.143(1) of the Act dated 26.08.2019 is not strictly as per the mandate of law. Before proceeding any further, we deem it fit to cull out the provisions of Section 143(1)(a) of the Act, which reads as under: "143. (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:- (a) the total....
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....ee to file his objection to the proposed adjustment. As observed by us hereinabove, the assessee on being intimated about the aforesaid proposed adjustment that was sought to be made in his hands, i.e. disallowance u/s.40A(3) of the Act of Rs.57,62,920/-, had therein responded to the same and objected to the said disallowance. It was claim of the assessee that as the aforesaid payments were made towards purchase of liquor from the State Government undertaking which did not receive payment in any mode other than cash, therefore, no disallowance u/s.40A(3) of the Act with respect to the payment in question was called for in his hands. We find on a careful perusal of the reply filed by the assessee that he had impliedly tried to bring his case within the realm of Rule 6DD(b) of the Income Tax Rules, 1962, i.e. an exception carved out to the applicability of the provisions of Section 40A(3) of the Act. For the sake of clarity, Rule 6DD(b) is culled out as under: "6DD. No disallowance under sub-section (3) of section 40A shall be made and no payment shall be deemed to be the profits and gains of business or profession under sub-section (3A) of section 40A where a payment or aggregate ....