2004 (1) TMI 37 - HC - Income Tax

Payment by account payee cheque or account payee draft - Tribunal was of the opinion that the payee insisted on cash payment as observed by the learned CIT (Appeals) and further that the transactions were found to be genuine - Genuine and bona fide transactions are not taken out of the sweep of the section 40A(3) - It is open to the assessee to furnish to the satisfaction of the Assessing Officer the circumstances under which payment in the manner prescribed in section 40A(3) was not practicable or would have caused genuine difficulty to the payee. It is also open to the assessee to identify the person who has received cash payment. Tribunal s decision require no interference

Summary

The High Court Delhi upheld the Tribunal's decision in a case involving section 40A(3) regarding payment by cash. The Tribunal found the transactions genuine and accepted the payee's insistence on cash payment. The Court cited precedents emphasizing that genuine transactions can be exempt from section 40A(3). The appeal was dismissed as the Tribunal's factual conclusion was not interfered with.