Income Tax Appellate Tribunal - Pune
Honrao Nitin Bhimashankar, Barshi vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
Pune Bench "B" , Pune
Before Shri G.S. Pannu Accountant Member
and Shri R.S. Padvekar Judicial Member
ITA No. 51/PN/2010
(Asstt. Year : 2005-06)
Honrao Nitin Bhimashankar, ... Appellant
Prop. Sanjivani Wine Centre,
Tel Giranai Chowk,
Barshi - 413 401
PAN : ABDPH4193F
v.
ITO Ward 2(3), Solapur ... Respondent
Appellant by : Shri Sunil Pathak
Respondent by : Shri. Alok Mishra
Date of Hearing : 16/7/12
Date of Pronouncement : 19 -7-12
ORDER
Per R.S. Padvekar, JM
In this appeal, the assesseee has challenged the impugned order of the Ld CIT(A) - III, Pune, dated 17.9.2009 for the A.Y. 2005-06. Ground No. 1 reads as under :
"1) The learned Income Tax Officer & Hon. CIT (Appeal)III, Pune has eared in making addition of Rs. 21,54,611.00 u/s 40A(3) of the Income Tax Act."
2. The assessee is a liquor dealer and running a wine shop. The assessee's case was selected for scrutiny for A.Y. 2005-06 and assessment is completed u/s. 143(3). The A.O has observed that the assessee has made the payment in cash in excess of Rs. 20,000/- otherwise than by Account Payee cheques and hence, provisions of Sec. 40A(3) of the I.T. Act are attracted. As observed by the A.O, the payments in violation of Sec. 40A(3) made by the assessee were to the extent of Rs. 1,07,73,059/- and the A.O made the disallowance at 20% of the said amount which was worked at Rs. 21,54,611/- and made addition to the income of the assessee. The Ld CIT(A) confirmed the addition. 2 ITA . No. 51//PN/2010
Honrao Nitin Bhimashankar A.Y. 2005-06 Page of 4
3. We have heard the parties and perused the record. The Ld Counsel was fair enough to submit that Rules 6 DD of I.T. Rules 1962 has undergone the amendment and no defence of the business expediency can be claimed, but, at the same time, some of the payments are made on the bank holidays and hence, in view of clause (j) to Rule 6DD, the said payments are out of the applicability of Sec. 40A(3). The Ld. Counsel filed the chart showing the holidays in the F.Y. 2004-05 and the payments made in cash by the assessee. He pleaded for restoring the matter for the file of the A.O for allowing the claim of the assessee to the extent of payments made in cash in excess of Rs. 20,000/- on the bank holidays. We also heard the Ld. D.R..
4. We find that there is a substance in the argument of the Ld. Counsel. We further find that there were Bank holidays in the F.Y. 2004-05 and on those holidays also, the assessee has made the payments for the purchase of the wine and liquor. In view of clause (j) to rule 6DD, if the payments are made on the Banking holidays, then those are to be excluded. We accordingly, set aside the order of the Ld CIT(A) on this issue and restore the same to the file of the A.O for fresh adjudication in the light of the above discussion. Accordingly, Ground No. 1 is allowed for statistical purposes.
5. Ground No. 2 reads as under :
"The learned Income Tax Officer & Hon. CIT (Appeal) III, Pune has eared in making addition of Rs. 1,04,628.00 u/s 69B of the Income Tax Act."
6. It was noticed by the A.O that the assessee has introduced a sum of Rs.8,72,742/- and the source of the same is shown as loan from one Shri Arvind Mahindrakumar. The assessee utilized the said amount for purchase of the factory unit at Kadappa in Gulbarga. It was seen that the assessee has purchased the said unit for Rs.11,81,000/- on which stamp duty of Rs.1,05,818/- and Registration fee of Rs. 11,810/- was paid. As observed by the A.O, total investment in the machinery and building made by the assessee was to the extent of Rs.12,98,628/- and in the capital account, the amount debited 3 ITA . No. 51//PN/2010 Honrao Nitin Bhimashankar A.Y. 2005-06 Page of 4 was Rs. 11,94,000/-. The A.O., therefore, made an addition of Rs.1,04,628/- as unexplained investment u/s. 69B. The Ld CIT(A) confirmed the same.
7. We have heard the parties. The Ld. Counsel submits that the A.O. has accepted the genuineness of the loan of Rs. 8,72,742/- which was taken from Shri Arvind Mahindrakumar, but the additional amount of Rs. 1,45,000/- taken from the said person was not accepted. He submits that the assessee has requested the Ld CIT(A) to accept the signed account statement of Shri Mahindrakumar and his affidavit, but the same was not considered. He pleaded for allowing the assessee to prove the additional expenditure. We have also heard the Ld. D.R.
8. We find that in the submission made to the Ld CIT(A), the assessee has requested that he may be allowed to submit signed account statement of Shri Arvind Mahindrakumar and his affidavit, if required, but there is no discussion in the order of the Ld CIT(A). The Ld. D.R. has no objection for restoring the issue to the file of the A.O. We, accordingly, set aside the order of the Ld CIT(A) on this issue and restore the second ground also to the file of the A.O. The assessee should produce the evidence to prove that the expenditure on the stamp duty & registration fee was out of the amount paid by Shri Arvind Mahindrakumar. Accordingly, Ground No. 2 is allowed for statistical purposes.
9. In result, assessee's appeal is allowed for statistical purposes.
The order is pronounced in the open Court on this day of 19th July, 2012 Sd/- Sd/-
(G.S. PANNU) (R.S. PADVEKAR )
ACCOUNTANT MEMBER JUDICIAL MEMBER
Pune, dated the 19th July, 2012
US
Copy of the order is forwarded to :
1. The Appellant
2. The Respondent
4 ITA . No. 51//PN/2010
Honrao Nitin Bhimashankar
A.Y. 2005-06
Page of 4
3. The CIT. IV, Pune
4. The CIT(A)- III, Pune
5. The D.R. "B" Bench, Pune
6. Guard File
/-True Copy-/
By order
Senior Private Secretary
Income Tax Appellate Tribunal
Pune