TMI Blog2009 (6) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... the genuineness of the transactions and the identity of the persons to whom the payments were made had not been doubted. Held that- the nature of the business of the assessee and the transactions made with respect to the expenditure incurred during the business as well as the evidence adduced before the Tribunal with regard to the cash transactions showed that the case of the assessee was covered under rule 6DD of Income Tax Rule. . - 34/99 - - - Dated:- 30-6-2009 - PRAKASH KRISHNA and RITU RAJ AWASTHI JJ. Ms. Urvashi Dhugga Judgment: Ritu Raj Awasthi J .- The present income-tax appeal filed under section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act") was admitted, vide order dated Septe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38,760 is concerned, the appellate authority had confirmed the finding of the assessing authority. 8. The respondent-assessee thereafter had filed an appeal before the learned Income-tax Appellate Tribunal, wherein the findings of the assessing authority as well as the appellate authority were reversed and the Appellate Tribunal has held that the assessee has fully explained the details of payment made in cash. The entire evidence in the form of bills, cash memos, etc., has also been furnished by the assessee. Looking into the business of the assessee and also the nature of items purchased, it cannot be disputed that the assessee had to make the payments in cash under unavoidable and exceptional circumstances. The Departmental authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer the circumstances under which the payment in the manner prescribed in section 40A(3) was not practicable or would have caused genuine difficulty to the payee." 12. Relying on the aforesaid judgment, the Division Bench of this court in the case of CIT v. Chaudhary and Co. [1996] 217 ITR 431 has held that the object of section 40A(3) of the Income-tax Act, 1961, is that a fictitious amount should not be claimed as revenue expenditure. The intention of section 40A(3) was not that cash payment can never be allowed as a deduction. The terms of section 40A(3) are not absolute. 13. The learned Tribunal looking into the exceptional circumstances has rightly allowed the cash payments to be included within the purview of 6DD of the Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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