Surbhi Agarwal Vs ITO (ITAT Jaipur)
ITAT Jaipur held that disallowance of cash payment under section 40A(3) of the Income Tax Act deleted since genuineness of the transactions and the payment and identity of the receiver are established. Accordingly, appeal allowed.
Facts- Post completion of scrutiny assessment, PCIT passed the order u/s. 263 of the Income Tax Act, 1961 on 18.03.2019 holding that the assessment order passed on 26.12.2016 was found as erroneous and prejudicial to the interest of the revenue. WIt is seen that the assessee has made a journal entry for Rs. 14,75,000/- for purchase of plot on 02.09.2013 as per sale deed dated 02.09.2013. As per this sale deed, the assessee has issued Cheque for Rs. 13,21,000/- of Oriental Bank of Commerce, Church Road, Jaipur (without date) and Rs. 1,54,000/- paid in cash for purchase of the plot. However, there is no date mentioned in the sale deed on which the payment of Rs.1,54,000/- was made in cash. Further, as per bank statement of Oriental Bank of Commerce for the period 1-4-2013 to 31-3-2014 available on record, no transaction of the aforesaid cheque is reflected. No enquiry regarding encashment of this cheque from the seller’s bank statement has been made by the A.O. to verify whether actually the payment made through the aforesaid cheque has been encashed or not or dishonored or whether actually cash payment has been made attracting provisions of 40A(3). Thus, even though the case was selected for complete scrutiny, the A.O. failed to examine this issue in detail.
