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2007 (7) TMI 664 - HC - Income TaxDelete the addition made cash payment to different person u/s. 40A(3) - various cash payments made to one party on one day were not required to be clubbed and treated as one cash payment? - several payments made on one day in small instalments and each instalment/payment has to be treated as an independent cash transaction? - HELD THAT:- A perusal of the of section 40A(3), shows that no deduction concerning payments made by an assessee is to be allowed, if the payment exceeding ₹ 2,500 has been made otherwise than by a crossed-cheque. A perusal of the accounts submitted by the respondent-assessee as reproduced in the assessment order would show that an amount of ₹ 2,500 or even less than that amount has been paid by the respondent-assessee. Once this is the factual position, then the rigours of section 40A(3) of the Act as it stood in the assessment year 1986-87, would not be attracted to the facts of the present case. There are further findings that the payments have been found to be made after banking hours which have been found to be appropriate after looking into the exigencies of business. We are further of the view that the Tribunal has also correctly applied the view taken by Orissa High Court in the case of Aloo Supply Co.[1979 (12) TMI 60 - ORISSA HIGH COURT]. Therefore, the question referred is answered against the revenue and in favour of the assessee.
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