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2016 (12) TMI 449 - AT - Income TaxAddition made u/s.40A(3) - cash payment to transporters - Held that:- Contention of the assessee that the payments were effected to lorry drivers cannot be accepted since each of the parties mentioned above were transport companies having their own PAN number and sales tax number. It is not been disputed by the assessee that atleast some of the payments were made by account payee cheques. No doubt the paramount reason which Sec. 40A(3) of the Act was enacted was to reduce the possibilities of black money transactions as held by Gujarat High Court in the case of Anupam Tele Services (2014 (2) TMI 30 - GUJARAT HIGH COURT ). But in the said case payments effected by the concerned assessee to a party which had issued a circular instructing the assessee to deposit cash. The recipient company had also instructed assessee not to make payments by cheque or demand draft. Thus, there were certain peculiar circumstances which called for relaxing the rigours of Sec. 40A(3) of the Act. On the other hand, in the case before us, there was no record to show that concerned transport operators had insisted an cash payments. If the assessee had paid money to the lorry drivers, as argued by it, vouchers would have been given by the lorry drivers and not by the transport companies. Considering clause (k) of Rule 6DD, rule of exemption, assessee has to show that the person to whom he had paid payments was his agent and such agent was required to make payment in cash. None of these could be proved by the assessee. In such circumstances, we are of the opinion that Sec. 40A(3) of the Act stood attracted to the cash payments made by the assessee. We do not find any reason to interfere with the orders of the lower authorities. - Decided against assessee.
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