COMMISSIONER OF INCOME TAX Vs. S. MOHAMMAD DHURABUDEEN

JUDGEMENT

(1.) THIS appeal is filed under s. 260A of the IT Act, 1961 by the Revenue, against the order of the Tribunal, Bench 'C',

(2.) THE facts leading to the above substantial question of law are as under : The assessee is an individual engaged in the job work of stitching of clothes for exporters. The relevant assessment year refund of Rs. 57,940. Later, the matter was taken up for scrutiny and notice under s. 143(2) of the IT Act ("Act" in the total income at Rs. 7,15,550. While completing the assessment, the AO made additions and disallowance under s. 40A(3) of the Act. The assessee himself voluntarily offered for assessment an amount of Rs. 2,50,000 on the ground that he is not maintaining any books of account and also he is unable to produce any material or evidence to prove the case. Aggrieved by the disallowance and other additions made by the AO, the assessee filed an appeal to the CIT(A). The CIT(A) deleted the disallowance made under s. 40A(3) of the Act. In respect of other additions, he confirmed the order and allowed the appeal partly. Aggrieved by the deletion of the disallowance made under s. 40A(3) of the Act, the Revenue filed an appeal to the Income -tax Appellate Tribunal ("Tribunal" in short). The Tribunal dismissed the Revenue's appeal and confirmed the order of the CIT(A). Hence the present tax case by the Revenue.

(3.) LEARNED standing counsel appearing for the Revenue submitted that the Tribunal is wrong in deleting the addition of Rs. 2,35,012 made under s. 40A(3) towards cash payments/purchases by the assessee. Further, it is submitted that the Tribunal is wrong in holding that, when the income of the assessee is estimated and no deduction claimed on purchases, provisions of s. 40A(3) need not be applied.