TMI Blog2020 (9) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal, which even otherwise is contrary to the material on record, which has already been referred. The aforesaid findings are findings of fact and this court as a general rule would not interfere except in cases where the parties have ignored material evidence or have acted on no evidence, or have drawn wrong inference from proved facts by applying the law erroneously. The assessee has not been able to show that its case falls in any of the aforesaid categories. - Decided against assessee. - I.T.A. NO. 32 OF 2013 - - - Dated:- 7-9-2020 - THE HON'BLE MR. JUSTICE ALOK ARADHE And THE HON'BLE MR. JUSTICE H.T.NARENDRA PRASAD FOR THE PETITIONER : SRI. CHYTHANYA K. K. ADV FOR THE RESPONDENT : SRI. E. I. SANMATHI , ADV JUDGMENT This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment year 2006-07. The appeal was admitted by a bench of this Court vide order dated 10.07.2013 on the following substantial question of law: Whether on the facts and circumstances of the case, the Tribunal was right in law in appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicability of Section 40A(3) as per the second proviso to Section 40A (3). In support of the aforesaid submissions, reliance has been placed on COPY OF CIRCULAR No.6-P, DATED 06.07.1968, COPY OF CIRULAR NO.22 OF 1969, COPY OF CIRCULAR NO.220, DATED 31.05.1977, COPY OF CIRULAR NO.717 OF 1995, 'ATTAR SINGH GURMUKH SINGH VS. ITO', (1991) 191 ITR 667 (SC), 'M.K.AGROTECH (P) LTD. VS ACIT', (2019) 412 ITR 351 (KAR), 'ACIT VS. SRI.SARASWATHI IRON FOUNDRY', (2006) 287 ITR 313 (KARN.), 'SMT.SAIRA BANU VS. ACIT IN ITA 228/2009 DATED 26.06.2015, 'PR.CIT VS. SAMWON PRECISION MOULD', (2018) 401 ITR 486 (DELHI), 'CIT VS. KEERTHI AGRO MILLS (P) LTD., SLP(C) NO.17441-42/2018, 'CIT VS. KEERTHI AGRO MILLS (P) LTD.', (2018) 405 ITR 192 (KER), 'GURDAS GARG VS. CIT', (2015) 63 TAXMANN.COM 289 (P H), 'SRI.LAXMI SATYANARAYANA OIL MILL VS. CIT', (2014) 367 ITR 200 (AP), 'SMT.HARSHILA CHORDIA VS. INCOME-TAX OFFICER', (2008) 298 ITR 349 (RAJ), 'WALFORD TRANSPORT (EASTERN INDIA) LTD. VS CIT', (1999) 240 ITR 902 (GAU.), 'CIT VS. THE SOLUTION', (2016) 382 ITR 337 (RAJ), 'ANUPAM TELE SERVICES VS. ITO', (2014) 366 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made no payment shall be deemed to be the profits and gains of business or profession under sub-Section (3A) of Section 40A where a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as prescribed under Rule 6ABBA, exceeds ten thousand rupees in the cases and circumstances specified hereunder namely: (a) where the payment is made to - (i) the Reserve Bank of India or any banking company as defined in Clause (c) of Section 5 of the Banking Regulation Act, 1949 (10 of 1949). (ii) The State Bank of India or any subsidiary bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959). (iii) Any co-operative bank or land mortgage bank; (iv) Any primary agricultural credit society or any primary credit society as defined under Section 56 of the Banking Regulation Act, 1949 (10 of 1949) (v) The Life Insurance Corporation of India established under Section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956); (b) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the provisions of section 192 of the Act, and when such employee-- (i) is temporarily posted for a continuous period of fifteen days or more in a place other than his normal place of duty or on a ship; and (ii) does not maintain any account in any bank at such place or ship; (j) 4[ *** ] (k) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person; (l) where the payment is made by an authorised dealer or a money changer against purchase of foreign currency or travellers cheques in the normal course of his business. Explanation.--For the purposes of this clause, the expressions authorised dealer or money changer means a person authorised as an authorised dealer or a money changer to deal in foreign currency or foreign exchange under any law for the time being in force.] 7. From perusal of the Circular dated 06.07.1998 issued by Finance Department, it is evident that object of incorporation of Section 40A(3) was to make a provision to counter evasion of tax through claims for expenditure shown to have been incurred in cash with a view to frustrating prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive in his written submission dated 18.12.2008 had disclosed the reason for payment in cash on the ground that the payments were made at place which was not served with any banking facility. The assessing officer has found that the place at which the payment was made had banking facility and therefore, has held that the assessee failed to prove that it was covered in the exception clause as provided under Section 40A(3) read with Rule 6DD. The aforesaid finding has been affirmed by Commissioner of Income Tax (appeals) vide order dated 23.02.2011. The relevant extract reads as under: Considering the various fats, I find that the appellant could not demonstrate with cogent evidences that there was business expediency or sufficient cause for such cash payments to various parties in the relevant assessment year. The explanation of the appellant that the transaction has taken place in Devenahalli Taluk which lacked the banking facilities in and around the place is not acceptable in the light of the fact that these transactions have taken place in the vicinity of Bangalore District, Devenahalli Taluk, which had umpteen number of banks and branches. Further, the contention of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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