TaxTMI 
TaxTMI 
2025 (8) TMI 289
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.... in business of civil work in name of Dev Engineering. Assessee filed return of Income on 28.11.2014 declaring total Income of Rs. 5,82,18,710/ - along with exempt incomes shown in books of account of assessee. 2. The Assessee return was processed u/s 143(1) of the Income tax Act and thereafter the case was selected for scrutiny under CASS and notice u/s 143(2) was issued on 28.08.2015. 3. Ld. A.O. made addition on account of various head and aggrieved by the order of Ld. A.O. appeal filed before CIT(A) and CIT(A) dismissed appeal in following grounds. 4. Aggrieved by the order of CIT (A), Assessee filed appeal before your Honors and raised following grounds of Appeal. 1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in confirming disallowances of Rs. 17,21,297/ - by invoking section Rule 6DD r.w.s. 40A(3). 2. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in confirming addition of Rs. 1,23,336/ - on account of Interest Expenditure. 3. The assessee craves leave to add, alter or amend the existing grounds of appeal on or before the date of hearing. ....
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....to time payment has also been made to these persons through account payee cheques. The payment is not made to the labour but to the person who is capable of waiting for a day and moreover it is not the cash payment but payment was made through Bearer cheques as such if one can go to Bank to withdraw money than one can also deposit the cheque in his Bank account and the payment can be drawn on the very same day as all the above persons are having Bank account in the same Branch. Merely citing a judgment of Hon'ble Supreme Court on distinguishable facts is of no help. The assessee has utterly failed in demonstrating the emergency of making payment through bearer cheques. Furthermore the assessee has not disclosed this fact to the Auditor and it has not been reported in the Tax Audit report filed u/s 44 AB in form 3 CD in relevant column as such it is a case of furnishing of inaccurate particulars which is not the intention of the law as well as of the Hon'ble Supreme Court. In view of these facts the it is held that the assessee has deliberately violated the provisions of sec. 40 A (3) and in the assessee's case a sum of Rs. 17,21,297/ - pertaining to the year under considera....
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....all in this category and therefore fully allowable u/s 40A (3) of the Income tax act. 11. CIT(A) taken view that cash was withdrawn at difference date but we would like to state that we have given cheque as per convenience of laborers and contactor. They are withdrawing amount as per their convenience. 12. We would like to reliance place on decision of Hon'ble Apex court in case of Attar Singh Gurmukh Singh V/s Income-tax Officer reported [1991] 59 Taxman 11 (SC) whereas held as under. Section 40A(3) of the Income-tax Act, 1961 read with rule 6DD of the Income-tax Rules, 1962 Business disallowance Cash payments exceeding prescribed limit - Whether provisions of section 40A(3), read with rule 6DD, can be said to be intended to restrict business activities and are, thus, invalid - Held, no - Whether section 40A(3) is attracted to payments made for acquiring stock-in-trade and other materials - Held, yes 13. Further we would like to refer the decision of Hon'ble Allahabad High Court in case of Smt. Sangeeta Verma V/s. Commissioner of Income-tax reported in [2021] 133 taxmann.com 97 (Allahabad) held as under. INCOME TAX: Where Assess....
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.... Total 29,10,732/- 17. It is submitted that it is consequential interest to except interest on M/s Veena Gems of Rs. 6,44,000 and M/s Victor Diamond of Rs. 7,59,533/ -. Ld. A.O. did factual mistake treated as non-genuine loan. It is submitted that said loan treated as genuine loan in A Y 2013-14 and copy of assessment order enclose for ready reference and records. 18. CIT (A) confirmed the addition on proportionate basis which is without logic and CIT(A) confirm the addition in respect of three parties whereas no interest was given to them. (Saumya Menon, Marudhan Roadways, Amit J. Purohit). 19. Therefore It is requested to delete the addition confirmed by CIT(A). 4. On the other hand, Ld DR relied upon the orders, passed by the revenues authorities 5. We have heard the counsels for both the parties, perused the material placed on record, judgements cited before us and also the orders passed by the revenue authorities. 6. From the records, we noticed that assessee is an individual is engaged in the business of civil work in the name of "Dev Engineering" and has also possessing agricultural land and having agricultural income from its ....
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.... contractors and they have to make payments to the labourers employed with them on Saturdays and the labourers would not have been able to get payments immediately because cheque will not be cleared on the same day. Therefore, considering the convenience of the labourers, the contractors had made payments through bearer cheques. In this regard, reliance has been placed on the decision of Hon'ble Apex Court in the case of Attar Singh Gurmukh Singh V/s Income-tax Officer reported [1991] 59 Taxman 11 (SC) whereas held as under. Section 40A(3) of the Income-tax Act, 1961 read with rule 6DD of the Income-tax Rules, 1962 Business disallowance Cash payments exceeding prescribed limit - Whether provisions of section 40A(3), read with rule 6DD, can be said to be intended to restrict business activities and are, thus, invalid - Held, no - Whether section 40A(3) is attracted to payments made for acquiring stock-in-trade and other materials - Held, yes Further we would like to refer the decision of Hon'ble Allahabad High Court in case of Smt. Sangeeta Verma V/s. Commissioner of Income-tax reported in [2021] 133 taxmann.com 97 (Allahabad) wherein it was held as under. ....