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2019 (9) TMI 685 - AT - Income TaxCash payments made to Royal Calcutta Turf Club u/s. 40A(3) - payment of operational expenses in relation to Horse Race - HELD THAT:- There is no dispute about assessee’s carrying on licensed bookmaker’s business with RCTC and therefore, he made the impugned cash payment to the said club only as ‘ operational charges’ has nowhere been doubted. The said operational charge relate to setting on horse racing conducted in the club on Saturdays/Sundays/Holidays only. Assessee’s agreement with the club. The same suggest that the bookmakers have to pay operational charges in relation to previous day(s) horse racing next day & prior to commencement of the day(s) rates. Learned Departmental Representative fails to dispute that non compliance of this agreement clauses attracts appropriate action against book makers. It therefore emerges that all these clinching agreement’s conditions only made the assessee to pay operational charges to the club in cash at the earliest in order to avoid appropriate actions. This tribunal ‘s co-ordinate bench’s decision in Sri Manoranjan Raha v/s. ITO [2016 (1) TMI 359 - ITAT KOLKATA] holds that impugned disallowance provision does not apply in case of overwhelming genuine payments coupled with business exigencies which may go beyond the prescribed rule 6DD of the Income Tax Rules, 1962.- Decided in favour of assessee.
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