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Case Law Details

Case Name : Sabita Panda Vs ITO ( ITAT Cuttack)
Appeal Number : ITA No. 421 & 142/CTK/2016
Date of Judgement/Order : 08/03/2018
Related Assessment Year : 2011-2012
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Sabita Panda Vs ITO ( ITAT Cuttack)

In the present case, the assessee is engaged in dealings in mobile recharge vouchers on a wholesale basis and retail basis. During the assessment year under consideration, the assessee made purchases of recharge vouchers from M/s. Stock Point, Puri and the Assessing Officer verified the ledger account of the assessee and found that a large number of payments exceeding Rs.20,000/- were made in cash in contravention of the provisions of section 40A(3) of the I.T.Act, 1961.

The Assessing Officer recorded the statement of Shri Upendra Nayak, Prop. Of M/s. stock Point Puri and who has confirmed sales of recharge vouchers of Rs.70,50,839/- to the assessee and receipts of cash sales but the Assessing Officer found there is variation in the recording of entries in assessee’s ledger and the assessee has violated the provisions of section 40A(3) of the Act and the CIT(A) confirmed the findings of the Assessing Officer.

We find that provisions of Section 40A(3) of the Act prescribes that no deduction shall be allowed in respect of an expenditure for which payment is made to the other person otherwise than by way of an account payee cheque or draft, in all cases where the amount exceeds Rs.20,000/-.

The Assessing Officer has held that payment of Rs.53,13,007/- made by the assessee to M/s. Stock Point, Puri are made in cash and confirmed by the Prop. Mr Upendra Nayak of M/s. stock Point in his statement recorded u/s.131 of the Act and there is no dispute about the sales figure and transaction and revenue has accepted the same.

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