TMI Blog2007 (7) TMI 664X X X X Extracts X X X X X X X X Extracts X X X X ..... en made otherwise than by a crossed-cheque. A perusal of the accounts submitted by the respondent-assessee as reproduced in the assessment order would show that an amount of ₹ 2,500 or even less than that amount has been paid by the respondent-assessee. Once this is the factual position, then the rigours of section 40A(3) of the Act as it stood in the assessment year 1986-87, would not be attracted to the facts of the present case. There are further findings that the payments have been found to be made after banking hours which have been found to be appropriate after looking into the exigencies of business. We are further of the view that the Tribunal has also correctly applied the view taken by Orissa High Court in the case of Alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had made certain payments in cash exceeding the amount of ₹ 2,500. On that basis, the aggregated amount of ₹ 3,24,257 was added to the assessee s income on the ground that cash payments in violation of section 40A(3) of the Act were made to ten firms. 3. The respondent-assessee was successful in persuading the Commissioner of Income-tax (Appeals) to accept its contention to the effect that several payments had been made on one day in small instalments and each instalment/payment has to be treated as an independent cash transaction, therefore, section 40A(3) of the Act could not be applied because in no transaction one individual cash payment has exceeded ₹ 2,500. The Appellate Authority took the view that clubbing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness. Payments made on a particular day in instalments for less than ₹ 2,500 are also found to be allowable in the light of the decision of the Orissa High Court in the case of Aloo Supply Co. (supra). So far as the cross-objection is concerned. We find no force therein because no confirmation was at all filed to show that genuineness of the parties. The plea taken by the assessee that all the three parties had left Ahmedgarh is not based on any definite material or evidence on record. Therefore, in the absence of any evidence on record, regarding the genuineness of the transactions, these additions are found to have been rightly made. The assessee has failed to file confirmations from the three parties in question. Simply because ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year commencing prior to the 1st day of April, 1969, in respect of any liability incurred by the assessee for any expenditure and subsequently during any previous year the assessee makes any payment in respect thereof in a sum exceeding two thousand five hundred rupees otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft, the allowance originally made shall be deemed to have been wrongly made and the Income-tax Officer may recompute the total income of the assessee for the previous year in which such liability was incurred and make the necessary amendment, and the provisions of section 154 shall, so far as may be, apply thereto, the period of four years specified in sub-section (7) of that section being rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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