TaxTMI 
TaxTMI 
2026 (4) TMI 1307
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....ing out of the assessment order dated 05.03.2021 passed u/s 143(3) read with sections 143(3A) & 143(3B) of the Act pertaining to Assessment Year 2018-19. 2. Brief facts of the case are that assessee company e-filed its return of income on 26.10.2018, declaring total Income at INR 40,24,910/ which stood processed u/s 143(1) of the Act on 17.05.2019. Subsequently, case was selected for scrutiny under CASS for the issues viz, (i) refund; (ii) unsecured loans; and (iii) Contract receipts or fees and notice u/s 143(2) of the Act was issued on 22.09.2019 which was duly served/delivered on the assessee. Thereafter notices u/s 142(1) of the Act were issued alongwith questionnaire from time to time which were duly replied by the assessee. Assesse....
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....n the appeal memo. 5. Ld. Sr. DR for the Revenue placed reliance on the order of AO and in terms of its submissions, has filed the copy of the Central Scrutiny Report submitted by the AO to Ld. Pr. CIT for proposing to file the appeal before the Tribunal and as such no further submission was made by Ld. Sr. DR in support of the Grounds of appeal taken by the revenue which is considered and placed on record. 6. Per contra, with respect to Ground of appeal No.1, Ld. AR for the assessee submits that the AO has made disallowance u/s 37(1) on account of penalty of INR 15,000/-; interest on TDS of INR 431/-; interest on payment of PF & ESI of INR 19,592/- and interest on service tax of INR 66,664/-. Ld.AR submits that Ld. CIT(A) has confirm....
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....t advance and necessary sale invoices were raised to the parties against these advances in subsequent year. Since the assessee has declared sales against these advances which has not been doubted therefore, he requested that Ld. CIT(A) has rightly deleted the same. He prayed accordingly. 10. Heard the contentions of both parties at length and perused the material available on record. Regarding Ground of appeal No.1, it is observed that Ld. CIT(A) while deleting the disallowance made u/s 37(1) of the Act has followed the judgment of Co-ordinate Mumbai Bench of Tribunal in the case of Neel Kamal Realtors Suburban Pvt. Ltd. vs ACIT in ITA No.86/Mum/2021 wherein it is held that "interest on delayed payments of statutory dues like PF and ESI ....
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....d by Ld. CIT(A) therefore, this ground of appeal taken by the Revenue is not borne out from the orders of Ld. CIT(A) accordingly, the same is hereby, dismissed. 12. Regarding Ground of appeal No. 2 regarding deletion of disallowance of INR 3,14,54,850/- u/s 40A(3) of the Act, it was the claim of assessee that none of the payment was made to any of the party in contravention to section 40A(3) of the Act as none of the payment was made in excess of threshold limit of INR 10,000/-. The assessee has filed relevant details before AO as well before Ld. CIT(A) and Ld. CIT(A) after appreciating the same, has deleted the disallowance by making following observation in para 6.4 of the order:- 6.4. "Ground No.3 and 7: Disallowance of expen....
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....It is noted that the reproduced tables only reflect net wages post-deduction of EPF and ESIC, and they fail to capture the actual payment dates or disbursement patterns, Section 40A(3) disallows cash payments exceeding Rs. 10,000 to a single person in a single day. The appellant has convincingly shown that no such payments were made. Payments were made to over 400 laborers across different project sites on different days, and each payment was well within the prescribed limit of Rs. 10,000. The AO's presumption that these were bulk payments is not substantiated by any evidence, and the appellant has provided enough documentation to confirm that individual payments complied with the provisions of Section 40A(3). While the AO clai....