TaxTMI 
TaxTMI 
2025 (1) TMI 1115
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.... That the orders passed by the learned commissioner of income tax (Appeals) is bad in law. 3. That the learned commissioner (Appeals) had passed the order without considering the facts of the case. 4. That the facts & Grounds of appeal is not considered while passing the order u/s 250 of the Income Tax Act 1961. 5. That the cash purchases are made within the purview of section 40 A (3) and the said section would have not been revoked in the case of the Assessee. 6. That where ever it was possible for Assessee to get credit, she utilized and where ever it was not possible (practicable) she made cash purchases. 7. That the case of the Assessee is clearly covered under Rule 6DD of the Income Tax Rules. 8. That the Assessee is being lady, the business is carried by employing persons who are also utilized for going and making purchases on her behalf. 9. That most of the purchases are made in the evening time only when the requirement for the next working day is ascertained. This generally will be after the Banking hours. 10. That for making cash payments for purchases, the Assessee was given discount. 11. T....
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....otal purchase and sales ledger and proof for exemption u/s. 40A(3) where assessee has made cash payments for purchase of goods. It was found from Form 3CD report that assessee herself has disallowed cash purchases of gold & silver for sum of Rs. 1,09,13,144 through cash payments exceeding Rs. 20,000 in the return of income. The AO show caused the assessee why cash payment exceeding Rs. 20,000 should not be disallowed u/s. 40A(3) of the Act and Rule 6DD of the I.T. Rules. The assessee failed to substantiate with proof for claim of applicability of section 40A(3) of the Act. The total turnover of assessee is Rs. 18.44 crores, cash purchases of gold & silver bullion worth Rs. 1,09,13,444 was made. Cash purchases were in violation of section 40A(3) of the Act and accordingly the entire amount was disallowed as the assessee did not come forward with documentary proof in support of exceptions covered under Rule 6DD of the I.T. Rules. Accordingly total income of assessee was computed at Rs. 1,17,96,284 against returned income of Rs. 8,82,840. The only addition of Rs. 1,09,13,444 being cash purchases in excess of Rs. 20,000 in violation of provisions of section 40A(3) of the Act was made a....
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....e assessee is in appeal before us. The ld. AR filed written submissions containing 8 pages along with supporting documentary evidence. He further submitted the details of sale & purchase bills, daily stock register of gold & bullion, details of stock register of silver bullion as well as ledger account. The ld. AR submitted that in ITA No.313/Bang/2012 identical disallowance was deleted as the purchaser is new to the seller and further specific discount is given by seller for payment of cash. He submitted that assessee was new to the business, did not have any contact in the market and further because of volatile nature of business the buyers demanded cash payment and therefore assessee has made cash payment for purchase of goods. He further submitted that purchase of goods have been entered into the stock register which has been held by assessee and resultant Gross Profit / Net Profit has already been offered for taxation. He further submitted that Rule 6DD has to be liberally construed and genuineness of the transaction is required to be seen before making any disallowance u/s. 40A(3). He further submitted that such purchases are genuine and entered into stock register as purchas....
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....to by assessee for purchase of gold & bullion amounting to Rs. 1,09,13,444 where cash payment is made and same is hit by provisions of section 40A(3) of the Act. Before the ld. AO, assessee could not show that cash payments are covered by exceptions provided by Rule 6DD of the Rules. Therefore it resulted into disallowance u/s. 40A(3) of the Act. 10. On appeal before the CIT(A), assessee contested that all these payments have been made on a bank holiday and therefore disallowance of the same could not have been made as it is covered by provisions of exceptions provided under Rule 6DD of the I.T. Rules. The ld. CIT(A) did not accept the above contention and held that assessee has failed to show that date on which purchases were made and cash is deposited happens to be a bank holiday. Even before us, assessee has though provided details of cash payment, but did not show the date on which cash is paid and that date happens to be a bank holiday. If that be so, disallowance could not have been made. Therefore if transactions is executed on a day on which there is a bank holiday, disallowance should not have been made u/s. 40A(3) of the Act. Further, the assessee has claimed that she ....