2025 (2) TMI 1459

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....d to as the 'Act'). 2. At the outset, the Registry has informed that there is a delay of 6 days in filing the present appeal. The assessee filed an application for condonation of delay stating reasons for such delay. After considering the application, we find reasonable cause and the delay was not intentional. We, therefore, condone the delay in filing the appeal and adjudicate the appeal on merits of the case. 3. The assessee in the instant appeal has raised various grounds but the primary issue under consideration is that an addition made by the Assessing Officer u/s 40A(3) of the Act alleging the violation of provision of cash payment and whether the assessment made u/s 153A r.w.s. 143(3) of the Act is violated in the absence of an....

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....ed that no incriminating materials were found during the search operation to warrant any addition u/s 153A of the Act to be made. He, therefore, stated that the alleged addition made by the Assessing Officer is contrary to the provisions of the Act and needs to be deleted. He further submitted that even on merits, the disallowance u/s 40A(3) of the Act was not justified as the cash payments were made in advance to the various project mangers acting as assessee's agent and not directly to any parties. The project manager disbursed these amounts to various parties organizing exhibitions and managing expenses. The ld. AR stated that the cash payments made by the assessee were duly recorded in the books of accounts of the assessee. In support o....

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....s found during the said search, thus the assessment u/s 153A is bad in law. We rely on the settled position of law laid down by the Hon'ble Supreme Court in the case PCIT vs. M/s Abhisar Buildwell Pvt. Ltd. (supra) that assessment order u/s 153A cannot be disturbed when the assessment was completed unless there is any incriminating material found during the search. We further note that even on merit, the disallowance of Rs. 2,73,603/- made u/s 40A(3) of the Act is not sustainable as the assessee provided sufficient evidence by showing that the cash payments were in the nature of advance given to its project manager and no direct payments were made to any parties and also the payments were in fact made for organising exhibitions and for expe....