TMI Blog2022 (4) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... her mode than by way of cash payment - HELD THAT:- We are of the considered view that in the facts of the instant case, no disallowance u/s 40A(3) is called for. The assessee has identified the parties to whom payments were made. The parties have confirmed receipt of payment in cash. The assessee has laid down the circumstances which necessitated payments in cash, being payment for advertisement for political parties on account of State elections, outside of banking hours. In a few instances, the assessee has obtained letter from the parties to the effect that it was at their insistence that cash payment was made. Exceptions contained in Rule 6DD are not exhaustive and that the said rule must be interpreted liberally, depending upon busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances covered by the proviso of Section.40A(3) of the Act. b. The CIT (A) erred in stating that factual position examined by the AO has no explanation by the appellant. c. The CIT (A) erred in not dealing with written submission that on facts of the case there was no alternative for Appellant to make payment other than in cash. There was reasonable cause. d. The order passed by CIT (A) without considering and dealing with the case laws relied and copies filed, is unjustified illegal. e. The action of CIT (A) to confirm disallowance of expenditure of ₹ 32,65,805/- u/s 40A(3) is invalid bad in law on facts law. 3. The appellant craves for leave to add, alter or amend all or any grounds before fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advertisement they refused to accept printing orders, otherwise than for payment made in cash. The ld. A.O. rejected the assessee s plea by holding that assessee has not been able to substantiate why payments could not be made by account payee cheque. The ld. A.O. held that assessee s reliance on P H decision in the case of Balkrishna Jagdish Chandra 213 CTR 174 which is to the effect that payment after banking hours is allowable, is misplaced since the assessee has not been able to prove that there was any business exigency which necessitated payments after banking hours. Regarding the second plea of assessee that the newspapers have confirmed that the parties have accepted cash payments for printing advertisements of political par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash to the news papers in the year under consideration. There is no terms and condition or agreement which says that only cash payment for advertisement from political party will be accepted. It is also noticed that in the earlier year or subsequent year no such payment was made in cash to the media houses. The situation and condition in the appeal under consideration is nowhere covered by the exceptional circumstances mentioned in proviso of section 40A(3) of the Act. The AO in the assessment order has examined the factual position and the contention of the appellant in detail for which the appellant has no explanation. The case law relied on by the appellant are not applicable in the facts and circumstances of the appeal under considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A No. 1887/Ahd/2013 wherein it was held that where genuineness of the payment and the identity of the payee is not doubted, additions u/s. 40A(3) should be deleted. He further placed reliance on several other decisions in support of arguments put before us. 6. In response, the ld. DR submitted that it is nowhere mentioned that any of the parties refused to accept payments other than in cash. The ld. D.R. drew our attention to para 7.8 and 7.9 of CIT(A) s order that opportunity was given to the assessee to justify the extra-ordinary circumstances as to why payments in cash were necessitated, but assessee has not been able to bring forth such extra-ordinary circumstances. There is nothing on record to prove that the orders for publication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n took longer time and such payments should be made only in cash in their bank account. If assessee would not make cash payment and make cheque payments alone, it would have received recharge vouchers delayed by 4/5 days which would severely affect its business operation. The assessee, therefore, made cash payment. The Gujarat High Court held that in view of above circumstances of the case, no disallowance under section 40A(3) was to be made in respect of payment made to principal. In the case of Sri Laxmi Satyanarayana Oil Mill v. CIT [2014] 49 taxmann.com 363 (Andhra Pradesh), assessee made certain payment for purchase of ground nut in cash exceeding prescribed limit. The assessee submitted that he made payment in cash because seller insi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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