M/S Ghanshyam Goyal & Sons (Huf) v. The Commissioner Of Income Tax, C.r. Building Rawat Bhataroad, Cad Circle, Kota

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 451 / 2008 M/s Ghanshyam Goyal & Sons (HUF) Proprietor of M/s. Goyal KhadBhandar, Khatoli, Kota, Through Its Member Sh. Ghanshyam GoyalS/o Sh. Laxmi Chand Goyal. ----Appellant Versus 1. The Commissioner of Income Tax, C.R. Building Rawat BhataRoad, CAD Circle, Kota. 2. The Income Tax Officer , Ward 2(2), C.R. Building Rawat BhataRoad, CAD Circle, Kota. ----Respondents Connected With M/S Ghanshyam Goyal & Sons (HUF) Proprietor of M/s. GoyalKhad Bhandar, Khatoli Kota, Through Its Member Sh. GhanshyamGoyal S/o Sh. Laxmi Chand Goyal ----Appellant Versus 1. The Commissioner of Income Tax, C.R. Building, Rawat BhataRoad, CAD Circle, Kota. 2. The Income Tax Officer, Ward2(2),, C.R. Building, Rawat BhataRoad, CAD Circle, Kota. ----Respondents_____________________________________________________ For Appellant(s) : Mr.R.K. Agrawal, Senior Advocate with Mr.Naresh Gupta For Respondent(s) : Smt.Parinitoo Jain _____________________________________________________ HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE GOVERDHAN BARDHAROrder 28/03/2017 1.By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby, the Tribunal hasallowed the appeal preferred by the department reversing theview taken by the CITA and dismissed the appeal of the assessee. 2.While admitting D.B. Income Tax Appeal No.451/2008on 11/11/2008, this Court has framed the following substantialquestions of law:- “(1)Whether the provisions of Section 40A(3) of theIncome Tax Act in the relevant assessment year applyto a single payment in a sum exceeding Rs.20,000/-and not to the aggregate of payments made to aperson in a day and the amendment made in Section40A(3) by the Finance Act, 2008 w.e.f. 1.4.2009 leavesno manner of doubt in that respect and vitiates theorder of ITAT? (2)Whether the statement of Govind KumarKhandelwal recorded in the course of assessmentproceedings of another assessee could have anyapplication qua the assessee-appellant that too withoutenabling the appellant assessee to cross examine thesaid witness and leave evidence in rebuttal and thiswas in total disregard of the rule of evidence andviolation of the principles of natural justice vitiating theAssessment order as affirmed by the ITAT?” 3.Counsel for the appellant does not press Question No.2 and confined his argument only to the extent of Question No.1. 4.Counsel for the appellant has taken us to Section40A(3) of the Income Tax Act, 1961 amended w.e.f. 01/04/2009,which reads, as under:- “40A(3) Whether the assessee incurs any expenditure inrespect of which a payment or aggregate of paymentsmade to a person in a day, otherwise than by an accountpayee cheque drawn on a bank or account payee bankdraft, exceeds twenty thousand rupees, no deduction shallbe allowed in respect of such expenditure.” After amendment, this Court has taken into consideration theidentical two substantial questions of law on 23/10/2008 in D.B.Income Tax Appeal No.223/2008. 5.Relying on the judgment of the Orissa High Court in{1980} 121 ITR 680 (Ori) : Commissioner of Income-Tax, OrissaVs. Aloo Supply Co., counsel for the appellant has contended thatin view of the amendment, it is very clear that at the relevanttime, Rs.2,500/- was the statutory limit and now Rs.3,000/- urgedby the assessee is quite contrary. 6.Even Rule 6DD(j) of the Rules, which was put intoservice by the learned counsel for the appellant was considered bythe Orissa High Court and taking into consideration the judgmentof the Orissa High Court, the issue is liable to be decided in favourof the assessee. After amendment, this Court has taken into consideration theidentical two substantial questions of law on 23/10/2008 in D.B.Income Tax Appeal No.223/2008. 5.Relying on the judgment of the Orissa High Court in{1980} 121 ITR 680 (Ori) : Commissioner of Income-Tax, OrissaVs. Aloo Supply Co., counsel for the appellant has contended thatin view of the amendment, it is very clear that at the relevanttime, Rs.2,500/- was the statutory limit and now Rs.3,000/- urgedby the assessee is quite contrary. 6.Even Rule 6DD(j) of the Rules, which was put intoservice by the learned counsel for the appellant was considered bythe Orissa High Court and taking into consideration the judgmentof the Orissa High Court, the issue is liable to be decided in favourof the assessee. 7.Learned counsel for the respondents has contendedthat in view of the decision of the Orissa High Court reported in1991 ITR 667 : Attar Singh Gurmukh Singh Vs. Income-taxOfficer, Ludhiana, the issue is covered in favour of the department. 8.We have heard counsel for the parties and perused thematerial available on record. 9.We have considered the question placed before us forconsideration whether the single transaction can be taken intoconsideration in a day in view of the amendment which was madew.e.f. 01/04/2009 and from the language used therein, it is veryclear that the single transaction can be done in a day but prior to01/04/2009. 10.In that view of the matter, the Question No.1 is answered in favour of the assessee and against the department. 11.Hence, the appeals are allowed in part. (GOVERDHAN BARDHAR),J. (K.S. JHAVERI)ACTING C.J. Anil Goyal-PS/181-182