TMI Blog2015 (4) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the assessee has made payment of ₹ 4,68,655/- in cash in violation of provisions of the Act on number of occasions and the payment made in cash does not match with the amount of cheques bounced. Be that as it may, we also note that the payment made by the assessee does not fall any circumstances prescribed in Rule 6 DD of the IT Rules, 1962. We may note that the words used Rule 6DD are specified the cases on circumstances and no case or circumstance can be employed or interpreted which is not specifically provided in Rule 6DD. - Decided against the assessee. - ITA NO. 1933/DEL/2011 - - - Dated:- 20-2-2015 - Shri R.S.Syal And Shri C.M.Garg JJ. For the Appellant : Sh. Sunil Bhatia, C.A. For the Respondent : Shri Vikram Sahay , Sr. DR. ORDER PER C.M.GARG, JUDICIAL MEMBER : This appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals) XVII, New Delhi dated 8.2.2011 in the appeal no. 56 / CIT (A) XVII/ Del/ 2010 / 2010- 11 for Assessment Year 2006-07. 2. The assessee has raised following grounds in this appeal :- 1. That the order of the Ld. Assessing Officer is arbitrary, beyond the facts and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the memorandum of appeal filed on 19.4.2011. The Ld. Departmental Representative replied that this is a 2nd round on litigation before Tribunal and the assessee did not bother to raise this ground during earlier round of proceedings neither before authorities below nor before the Tribunal. Therefore, the same cannot be admitted for adjudication. However, the Ld. DR alternatively submitted that if it is found just and proper then the legal objection of the assessee may be considered. On careful consideration of above submissions, we are of the view that the assessee wish to raise additional grounds in addition to grounds submitted raised by the assessee in the memorandum of appeal filed on dated 19.04.2011 by way of application in hand.The assessee has sought to raise following additional grounds :- Additional Ground : 1. That the Ld. AO completed the assessment without affording the assessee sufficient opportunity of being heard. 2. That the Ld. CIT(A) erred on facts in concluding that the case of the assessee was not covered under Rule 6DD of the Income Tax Rules. On careful consideration on above submissions of both the parties and perusal of the relevant mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufficient opportunity of being heard. Accordingly additional ground no. 1 of the assessee is dismissed. 7 . Additional ground no. 2 ground no. 1 to 5 of the assessee :- Having heard argument of both the sides and careful perusal of the relevant material placed on the record, inter alia, ratio of the decision relied by both the parties. At the very outset, we find it necessary relevant to reproduced provision of section 40A(3) of the Act and Rule 6DD of the (g), (j) (k) Income Tax Rules, 1962 which read as under :- Section 40A(3) :- Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure. 6DD. No disallowance under sub-section (3) of section 40A shall be made and no payment shall be deemed to be the profits and gains of business or profession under subsection (3A) of section 40A where a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted that the payments were made generally after 9.00 p.m as it is notified that the plying of heavy vehicles on most of the roads in Delhi is not permitted between 7.30 A.M. to 9.30 P.M. and as per prevailing rates of the diesel during financial year 2005-06 the average purchase of diesel for vehicle was not more than ₹ 20,000/- and the payment was always made for more than one vehicle. The Ld. AR submitted that the assessee used to pay cash to the drivers of vehicles to make payments to supplier i.e. Keshav Motors, therefore, payment made to the agent is within the ambit of sub rule (k) of Rule 8DD of the IT Rules, 1962 and therefore, the assessee was also entitled for the exemption available under sub rule (g) (j) of said Rule. 10. Replying to the above, the Ld. Departmental Representative (DR) placing reliance on the decision of ITAT, Pune Bench A in the case of DCIT Vs. Vijay Kumar Ramesh Chand Co. (2007) 108 ITD 626 (Pune Trib.) Submitted that sub rule (j) of Rule 6 DD of the IT Rules, providing the exception to section 40A(3) of the Act, has a limited scope and prescribed exception only in respect of agent and does not covered an employee for such an except ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was regular cheque transaction between the two throughout the year. Therefore, it cannot be said that there were any circumstances which are covered by Rule 6DD. The words used in Rule 6DD are very clear and unambiguous. If the legislature intended to provide for any other circumstances than those mentioned in Rule 6DD, they would have provided for the same. But the legislature in their wisdom have not provided for any other circumstances. 4.1.1. In the case of Narayan Bijoy Kumar Vs. CIT(Pat) 163 ITR, 695, it was held that even where the assessee showed a certificate from the other party insisting for cash payment, the same was not sufficient to justify cash payment. Similarly, in the case of Jai Talkies Steel Traders Vs. CIT (P H) 250 ITR 738, it was held that the assessee must produce confirmatory letter from other party as proof for insisting cash payment. The jurisdictional ITAT in the case of Jai Talkies Vs. Income Tax Officer (ITAT, Delhi) 57 TTJ 745 has held that making payment on bank holiday do not ipso facto permit assessee to make cash payments. In view of the facts and circumstances of the case, legal provisions and judicial pronouncements on the issue, I ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Rule 6 DD of the IT Rules, 1962. We may note that the words used Rule 6DD are specified the cases on circumstances and no case or circumstance can be employed or interpreted which is not specifically provided in Rule 6DD. On the basis of foregoing discussion, we are of the considered view that the assessee s case does not fall in any of the clauses specified in Rule 8 Rule 6DD of the Act Rule which of provides that an assessee can be exempted from the requirement of payment by cross-cheque or a cross bank draft beyond prescribed limit where the circumstances in which such payment has been made falls under exceptions as mentioned in Rule 6 DD of the Act. 16. On the basis of foregoing discussion, we reach the conclusion that in view of the facts and circumstances of the case, legal provisions and jurisdictional pronounce of the issue the AO as well as the CIT(A) were fully justified in making disallowance u/s 40A(3) of the Act and we are unable to see any perversity or any other valid reason to interfere with the same. Accordingly additional ground no. 2 and ground no. 1 to 5 of the assessee being devoid of merits are dismissed. 20. In the result, appeal of the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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