TMI Blog2004 (1) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... to contravention of section 40A(3). In the grounds of appeal filed by the assessee there are five grounds covering two issues, first one relates to invoking of provisions of section 40A(3) and the second one is with regard to disallowance of Rs. 5,000 out of travelling and shop expenses upheld by the CIT(A). The ld. AR of the assessee did not press for the second issue. Hence, the same is decided against the assessee. 3. With regard to the first issue the learned AR of the assessee vociferously argued that although the changed law is applicable w.e.f. 1997-98 assessment year, but in the instant case not a single payment has been made in cash exceeding Rs. 20,000. All the payments exceeding Rs. 20,000 were made by cheque. He went up to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the authorities below should be upheld in all fairness. 5. We have heard the rival parties and gone through the provisions of law and the case laws cited by both sides. Although we agree with the contention of the Department as per records available with us along with the arguments advanced by the Senior DR that the facts of the case CIT v. Aloo Supply Co. [1980] 121 ITR 680 (Orissa) are little different from the facts of the present case under consideration, it cannot be denied that the interpretation made in that case by the Hon ble jurisdictional High Court has to be adopted by us not only for judicial discipline but also for proper interpretation of the section and the Legislative intention. As has been held by the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have caused genuine difficulty to the payee. It is also open to the assessee to identify the person who has received the cash payment. Rule 6DD provides that an assessee can be exempted from the requirement of payment by a crossed cheque or crossed bank draft in the circumstances specified under the rule. It will be clear from the provisions of section 40A(3) and rule 6DD that they are intended to regulate business transactions and to prevent the use of unaccounted money or reduce the chances to use black money for business transactions". It was further held by Hon ble Apex Court that in interpreting a taxing statute, the court cannot be oblivious of the proliferation of black money which is under circula- tion in our country. Any restrai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in order to treat the same as unaccounted money there is no scope for the Revenue to debar the assessee from availing of cash discount of 3 per cent in each transaction by making cash payment and treat the same as commercial expediency. In the instant case, according to the contention of the assessee, by making cash payment he was getting a discount at the rate of 3 per cent which has not been challenged or rebutted by revenue. Simply because the assessee has to follow the Income-tax rules strictly, he could not be deprived of the discount claimed to have been availed by the Revenue. Hence, availing of discount in the present set of circumstances of the case is to be treated to come within the ambit of commercial expediency . After all wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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