ITO, Patiala v. Sh. Ajay Kumar Singla, Patiala

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA JUDICIAL MEMBER ITA NO. 356/CHD/2013 ASSESSMENT YEAR: 2009-10 THE ITO VS. SHRI AJAY KUMAR SINGLA WARD 1 20 NEW LAL BAGH PATIALA PATIALA PAN NO. AVTPS8009F & C.O NO. 16/CHD/2013 (IN ITA NO. 356/CHD/2013) ASSESSMENT YEAR: 2009-10 SHRI AJAY KUMAR SINGLA VS. THE ITO 20 NEW LAL BAGH WARD 1 PATIALA PATIALA PAN NO. AVTPS8009F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AKHILESH GUPTA RESPONDENT BY : SHRI TEJ MOHAN SINGH DATE OF HEARING : 15/10/2013 DATE OF PRONOUNCEMENT : 18/10/2103 ORDER PER T.R.SOOD A.M. THE APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) PATIALA DATED 30.01.2013. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL:- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 2 85 45 077/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE U/S 40A(3) OF THE ACT. 2. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET AS IDE AND THAT OF THE AO RESTORED . 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE BOOKS OF ACCOUNT WERE REJECTED AND PROFIT WAS ESTIMATED BY THE ASSESSING OFFICER. HOWEVER IT WAS FURTHER NOTED THAT SOME PAYMENTS HAVE BEEN MADE IN CASH AND ACCORDINGLY A S EPARATE ADDITION U/S 40A(3) OF THE ACT WAS MADE IN RESPECT OF SUCH CASH PAYMENTS AMOUNTING TO RS. 85 45 077/-. 4. ON APPEAL IT WAS MAINLY SUBMITTED THAT PROPER E XPLANATION FOR CASH PAYMENT WERE FILED BEFORE THE ASSESSING OFFICER. I T WAS FURTHER SUBMITTED THAT CHANDIGARH TRIBUNAL IN THE CASE OF KARANBIR S INGH SANDHU V JCIT 717/CHANDI/2010 HAS TAKEN VIEW THAT ONCE PROFITS WERE ESTIMATED TH EN NO FURTHER ADDITION CAN BE MADE U/S 40A(3) OF THE ACT. THE LD. CIT(A) ACCEPTED THIS CONTENTION AND DELETED THE ADDITION. 5. BEFORE US THE LD. DR RELIED ON THE ORDER OF ASS ESSING OFFICER. 6. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSE SSEE RELIED ON THE DECISION OF KARANBIR SIGNH SANDHU (SUPRA). HE FURT HER SUBMITTED THAT SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V SMT. SANTOSH JAIN (2008) 296 I TR 324 (P&H). 7. AFTER CONSIDERING THERE RIVAL SUBMISSIONS WE FI ND THAT HON'BLE PUNJAB & HARYANA HIGH COURT I THE CASE OF CIT V SAN TOSH JAIN (SUPRA) FOLLOWING THE DECISION OF HON'BLE OF ALLAHABAD HIG H COURT IN THE CASE OF CIT V BANWARI LAL BANSHIDHAR [1998] 229 ITR 229 HAS HELD AS UNDER;- 3 WHERE THE INCOME OF THE ASSESSEE HAS BEEN COMPUTED BY APPLYING A GROSS PROFIT RATE THERE IS NO NEED T O LOOK IN TO THE PROVISIONS OF SECTION 40A(3) OF THE INCOM E-TAX ACT 1961 AS APPLYING THE GROSS PROFIT RATE TAKES CARE OF EXPENDITURE OTHERWISE THAN BY WAY OF CROSSED CHEQUES ALSO. FOLLOWING THE ABOVE DECISION WE SET ASIDE THIS ISS UE AGAINST THE REVENUE. 8. IN THE RESULT REVENUES APPEAL IS DISMISSED. CROSS OBJECTION NO. 16/CHD/2013 9. DURING THE COURSE OF HEARING LD. COUNSEL FOR TH E ASSESSEE SOUGHT WITHDRAWAL OF THE CROSS OBJECTIONS FOR WHICH ENDORS EMENT HAS BEEN MADE ON THE MEMORANDUM OF THE CROSS OBJECTION. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION. THEREFORE THE CR OSS OBJECTIONS ARE DISMISSED AS WITHDRAWN. 10. IN THE RESULT CROSS OBJECTION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/10/2013. SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 18 TH OCTOBER 2013 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER ASSISTANT REGISTRAR ITAT CHANDIGARH 4