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2010 (4) TMI 236 - HC - Income TaxBusiness Expenditure- The assessee filed a return declaring total income of Rs. 1,93,950. The Assessing Officer completed the assessment u/s 143(3) of the Act, by making addition of Rs. 61,51,028. The Assessing Officer disallowed the payments on the ground that the payments were made by the assessee for stock otherwise than by crossed cheque drawn on a bank or crossed demand draft and added the payment to the total income of the assessee. The Commissioner (Appeals) deleted the addition and this was upheld by the Tribunal. Held that- sub clause (iv) of clause (d) of amended rule 6DD of the Rules, provide that “no disallowance shall be made where the payment is made by bill of exchange made payable only to a bank”. From a reading of the definition of bill of exchange u/s 5 and cheque under section 6 of the Negotiable Instrument Act, 1881, it is clear that the banker’s cheques/pay orders/ call deposit receipts are instruments which fall within the definition of bill of exchange. The Assessing Officer has not doubted the genuineness of the transactions. The payment could not be disallowed.
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