TaxTMI 
TaxTMI 
2025 (3) TMI 2118
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment-Year ["AY"] 2017-18, the assessee has filed this appeal on following grounds: "1. On the facts and circumstances of the case and in law the learned Commissioner of Income tax (Appeals) erred in confirming the addition amounting to Rs. 4139084/- under Section 40A(2)(b) of the Act. The Appellant prays the said arbitrary disallowance be directed to be deleted. 2. The CIT(A) failed to appreciate and ought to have held that the AO has not perused the audit report correctly and neither questioned the reasonableness of purchase from related party. Accordingly, the Appellant prays that the said disallowance be directed to be deleted." 2. The background facts leading to present appeal are such that the assessee-company file....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on we hereby draw your kind attention that the assessee company had neither purchased any goods nor sale any unit in the open market. Further we would like to draw your kind attention that the clarification you require is pertaining to the F.Y. 2015-16 Tax Audit Report. The contention of the assessee is misleading because the auditors have clearly mentioned in the audit report the details of payments made to persons specified u/s 40A(2)(b). Therefore, amount of Rs. 41,39,084/- is disallowed as assessee failed to furnish any proof of purchases. The same is added to the total income of the assessee. Penalty proceedings u/s 270A are hereby initiated for under reporting of income." 5. Now, we extract the order passed by CIT(A) reading as und....
X X X X Extracts X X X X
X X X X Extracts X X X X
....imit for audit. He referred the Balance-Sheet of assessee of current AY 2017-18 and explained that the same was audited by statutory auditors for the purpose of Companies Act since the assessee is a company but, however, there was no tax audit done and consequently no form No. 3CD. Ld. AR submitted that there was in fact no purchase made by assessee from M/s Gupta Trading Co. during the previous year relevant to current AY 2017-18 under consideration. Thus, by means of these submissions, Ld. AR demonstrated that the AO has picked the Form No. 3CD of preceding AY 2016-17 and taken the impugned purchase of Rs. 41,39,084/- therefrom for making disallowance u/s 40A(2). 7. Then, Ld. AR referred the CIT(A)'s order re-produced above to explain ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... He submitted that the CIT(A) has not taken in account that there was no Form No. 3CD in current AY 2017-18 and the AO has wrongly referred to the Form No. 3CD of preceding AY 2016-17. 8. Finally, Ld. AR summed up his contention by stating that there was no Form No. 3CD of current AY 2017-18 before AO; the AO has wrongly picked a Form No. 3CD of preceding AY 2016-17 and made addition in current AY which is abruptly wrong and unsustainable. 9. Replying to this, Ld. DR for revenue only relied upon orders of lower authorities but, however, could not controvert the submissions of Ld. AR. 10. We have considered rival contentions of both sides and perused the orders of lower-authorities as well as the material held on record to which ou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es debited to the profit and loss account, to the extent disallowable under section 40A 3 Amounts paid to persons specified in section 40A/2)(b) 9 .. · ৳ Amount paid otherwise than by account payee cheque or account payne bank draft under section 40A(3) - 100% @isalowabie 90 0 c Provision for payment of gratulty 140A(7) 9€ 0 ₫ any sum paid by the assessoe as an employer for sering up or as contribution to any fund. trust company. ADR, or BOI or society or any other institution [40A/1)1 98 0 € Any other disa lowance De 0 ! Total amount di sallowable under section 40A (total of Sa to 90) DE 0 From the above table, it is observed that the appellant had not mentioned Nil purchase made from its associated c....