TMI Blog2007 (11) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... yments are eligible for exemption from disallowance under section 40A(3) of the Act. I am in agreement with the contention of counsel for the respondents because the protection under clause (a) of rule 6DD is available only if the payments are made to any of the institutions referred to thereunder. Obviously in order to qualify for the benefit of rule 6DD(a) the beneficiary of the payee should be an institution referred to therein. Even though counsel for the petitioner contended that payments to any beneficiary in the account maintained in the banks referred to in rule 6DD(a) is also covered by the exception, I do not think the same can be accepted because, some of the institutions referred to in the rule, namely, Reserve Bank of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 and made addition under section 40A(3) for the payments made in cash in excess of ₹ 10,000. Against this, petitioner filed revision before the Commissioner, who rejected the same vide Ext. P6 order, which is under challenge in this O.P. 2. Heard counsel for the petitioner and standing counsel for the Income-tax Department. The claim put forward by the petitioner is that payments fall specifically within the exception clause, rule 6DD(a) of the Income-tax Rules, 1962. For easy reference the said rule is extracted hereunder :- 6DD. Cases and circumstances in which payment in a sum exceeding twenty thousand rupees may be made otherwise than by an account payee cheque drawn on a bank or account payee bank draft.-No disallowance u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Ltd., Madras; (xi)the Andhra Pradesh Industrial Development Corporation Ltd., Hyderabad; (xii)the Kerala State Industrial Development Corporation Ltd., Trivandrum; (xiii)the State Industrial and Investment Corporation of Maharashtra Ltd., Bombay; (xiv)the Punjab State Industrial Development Corporation Ltd., Chandigarh; (xv)the National Industrial Development Corporation Ltd., New Delhi; (xvi)the Mysore State Industrial Investment and Development Corporation Ltd., Bangalore; (xvii)the Haryana State Industrial Development Corporation Ltd., Chandigarh; (xviii)any State Financial Corporation established under section 3 of the State Financial Corporations Act, 1951 (63 of 1951); The contention of the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rations, Industrial Development Corporation and other financial institutions are not engaged in banking operations. Therefore, rule 6DD(a) applies only for payments to institutions referred to therein and not for payment made to any party s account maintained in the institutions referred to therein. In the circumstances, I reject the contention of the petitioner and uphold Ext. P6 order of the Commissioner of Income-tax confirming the assessment revised under section 154 of the Act. 3. The next contention raised by the petitioner is that cash remittances in the account of the suppliers were made by entrusting the cash to the truck drivers and, therefore, the same is covered by clause (i) of rule 6DD. This contention is seen not pressed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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