TaxTMI 
TaxTMI 
2026 (1) TMI 1202
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....ppeal by the department in support of which a condonation petition was filed by the Revenue. It was stated in the condonation petition that the delay has occurred due to obtaining of administrative approvals from the competent authorities, which took quite a long time and accordingly, the delay may be condoned. The ld. AR, on the other hand, did not oppose the condonation of delay. Considering the reasons cited before us, we are inclined to condone the delay and admit the appeal for hearing. 3. The first issue raised by the Revenue is against the deletion of addition of Rs.3,83,34,071/- by the ld. CIT (A) as made by the ld. AO on account of freight payment exceeding to Rs.35,000/- to a single transporter in a single day in violation of S....
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....& bricks) and details of name of suppliers, truck number, weight, name of transporters and freight charge paid during the year under consideration Further, Assessing Officer noticed that the assessee made freight payment in cash in excess of Rs. 35,000/- to a single transporter in a day. Rs. 3,83,34,071/- was added to total income of assessee u/s 40A(3) of the Act. Also Rs. 10,00,000/- was added to total income of the assessee u/s 69C of the Act alleging unexplained expenditure. In appeal stage, the appellant stated that The Appellant is engaged in the procurement of raw materials such as clinker, gypsum, and slag, which are essential for its cement manufacturing operations. These materials are transported by individual truck owners/drivers....
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....cash vouchers and ledger account submitted by the appellant. The AO has wrongly presumed that these payments were made to transport companies merely because some facilitator names appeared in memorandum records, ignoring the fact that the appellant's books record the payee-wise breakup with truck numbers and amounts-all of which were below the prescribed limit. The Assessing officer has failed to bring on record any other evidence to proof his contention that the appellant has actually made payment to the transporters and not to the truck drivers, while the assessee repeatedly stated along with supporting evidences that the cash has been paid directly to the truck drivers and not to the transporters. The Assessing Officer has failed to ....
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....avit is filed the averment therein is assumed to be correct unless the same is proved otherwise. The law is well settled that Section 40A(3) should not be applied to disallow genuine business expenses borne out of commercial exigencies, particularly where the identity of payees and genuineness of transactions is not in doubt, as held in Smt. Harshila Chordia (298 ITR 349) and Goenka Agencies (263 ITR 145). In view of the above discussion, Assessing Officer is directed to delete the addition of Rs. 3,83,34,07/-" 3.3. After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessee has not made payments to transporters in excess of Rs.35,000/- in a single day a findings of this effe....
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....vailable before him during the assessment proceedings, whereas the ld. CIT (A) has examined and correctly analyzed these papers/documents and recorded a very objective finding that payments to these truck drivers were not exceeding the limit as specified u/s 40A(3) of the Act. Consequently, we uphold the order of ld. CIT (A) by dismissing the appeal of the Revenue on this issue. The first issue raised by the Revenue is dismissed. 4. The second issue raised by the Revenue is against the deletion of addition of Rs.10 lacs by the ld. CIT (A) as made by the ld. AO on the basis of messages retrieved from the mobile phone of the directors for which corresponding entries were not made in the books of account. 4.1. The facts in brief are that....
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.... AO has failed to discharge the burden of proof and has instead resorted to presumptive addition based on hearsay, which is impermissible under law, as held in C/T v. Durga Prasad More (82 ITR 540) and Teena Bethala (70 taxmann.com 379). In addition, the books of accounts were neither rejected under Section 145(3) nor were any defects pointed out by the AO. I find that the addition made by Assessing Officer of Rs. 10,00,000/- is not sustainable in the eyes of law. Therefore, Assessing Officer is directed to delete the addition of Rs. 10,00,000/-." 4.3. After hearing the rival contentions and perusing the materials available on record, we find that the survey team though retrieved some WhatsApp messages which referred to payment of cash w....