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2025 Supreme(Online)(ITAT) 6473
INCOME TAX APPELLATE TRIBUNAL (BANGALORE BENCH)
Shri Prashant Maharishi, VP, Shri Keshav Dubey, J
Smt. Chandra Moolchand Jain – Appellant
Versus
National Faceless Appeal Centre, Delhi (NFAC) – Respondent
ITA No.1133/Bang/2024
For the Appellants/Petitioners: Shri R.K. Singhvi, CA
For the Respondents: Shri V. Parithivel, Jt.CIT(DR)(ITAT), Bengaluru
Cash purchases exceeding the specified limit can be disallowed unless substantiated by adequate proof of exceptions under the Income Tax Act.
Headnote:(A) Income Tax Act, 1961 - Section 40A(3) - Disallowance of cash purchases exceeding Rs.20,000 - Assessee claimed that cash transactions were covered under exceptions of Rule 6DD of the Income Tax Rules - Assessee failed to provide adequate evidence that contributions fell within the exceptions - The case is restored back to the Assessing Officer for reconsideration of cash payments on grounds of bank holidays, agent payments, and genuineness. (Paras 9, 10)
(B) Judicial Principles - The tribunal reiterated the principles concerning the burden on the assessee to establish compliance with the legal provisions governing cash transactions and the strict interpretation of exceptions provided under Rule 6DD. (Paras 3, 4, 5)
| Table of Content |
|---|
| 1. introduction to case details and cash purchase issues. (Para 1 , 3 , 4) |
| 2. assessment of the grounds raised against the cita's decision. (Para 2) |
| 3. court's observation and reasoning about cash transactions. (Para 6 , 8) |
| 4. restoration of case for further examination. (Para 9) |
| 5. final conclusion on the appeal's outcome. (Para 11) |
ORDER
Per Prashant Maharishi, Vice President
1. This appeal is filed by Smt. Chandra Moolchand Jain (the assessee/appellant) for the assessment year 2015-16 against the appellate order passed by the National Faceless Appeal Centre, Delhi (NFAC) [ld. CIT(A)] dated 12.4.2024 wherein the appeal filed by the assessee against the assessment order u/s. 143(3) of the Income-tax Act, 1961 [the Act] dated 28.12.2017 passed by the ITO, Ward 6(2)(4), Bangalore [ld. AO] was dismissed.
2. The assessee is aggrieved with the appellate order and has raised the following grounds:-
“ 1. This is an Appeal against the orders passed by the learned commissioner of Income Tax (Appeals) for the Assessment Year 2015-16.
2. That the orders passed by the learned commissioner of income tax (Appeals) is bad in law.
3. That the learned commissioner (Appeals) had passed the order without considering the facts of the case.
4. That the facts & Grounds of appeal is not considered while passing the order u/s 250 of the Income Tax Act 1961.
5. That the cash purchases are made within the purview of section 40 A (3) and the said section would have not been revoked in the case of the Assessee.
6. That where ever it was possible for Assessee to get credit, she utilized and where ever it was not possible (practicable) she made cash purchases.
7. That the case of the Assessee is clearly covered under Rule 6DD of the Income Tax Rules.
8. That the Assessee is being lady, the business is carried by employing persons who are also utilized for going and making purchases on her behalf.
9. That most of the purchases are made in the evening time only when the requirement for the next working day is ascertained. This generally will be after the Banking hours.
10. That for making cash payments for purchases, the Assessee was given discount.
11. That the purchases varies from Rs. 28,000/- to within Rs. 2,00,000/-, Hence no transaction exceeding Rs. 2 Lakhs in cash is made.
12. That the Assessee's case is covered under Rule 6 DD (f) where in the Assessee is given specific discounts of Rs.1,05,353/- by the seller for the payments made in cash.
13. That at the time of hearing before the learned ITO and learned Commissioner of Income Tax (Appeals) the detailed list with copies of Invoices were submitted where in the Assessee had get specific discounts, as specified under Rule 6 DD (f) which is ignored by both the learned ITO as well as the learned Commissioner of Income Tax (Appeals).
14. That as stated above a sum of Rs. 1,09,13,444/- should have been allowed under Rule 6 DD and section 40 A (3) should have not been revoked.
15. That the Interest u/s 234 (B) and u/s 234 (C) shall be waived off as Tax itself is not payable.
16. That penalty u/s 271 (1) (c) shall not be applicable as there is no concealment of Income.
In the light of the above facts the Assessee prays the Honorable Bench to allow Rs. 1,09,13,444/- as added to the total income by setting aside the orders passed by the learned Commissioner of Income Tax (Appeals) for the above Assessment Year 2015-16.
For these and any other such grounds which may be urged at the time of hearing.it is prayed that the relief as prayed before the Honorable Bench may please be allowed in the interest of law and natural justice.”
3. The brief facts of the case show that assessee is an individual, deriving income from business, house property and other sources. Assessee is also carrying on wholesale dealing in gold and silver bullion. She filed her return of income on 30.9.2015 declaring income of Rs.8,82,840. This return was selected for scrutiny under CASS and notices u/s. 143(2) & 142(1) were issued.
4. The assessee was
