TMI Blog2013 (3) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... led for u/s. 40A(3) of the Act even though there is no finding on record either before the Assessing Officer or CIT (A) or ITAT that any of the situation mentioned in Rule 6DD(j) or 6DD(g) exists ? (b) Whether in the circumstances and the facts of the case and in law the Appellate Tribunal is right in holding that the Assessing Officer was not right in invoking the provision of Section 40(a)(ia) of the Act for disallowing the payment of ₹ 5,26,384/- ? (c) Whether in the circumstances and the facts of the case and in law the Appellate Tribunal is justified in deleting the disallowance made u/s.40(a)(ia) of the Act of ₹ 40,94,923/- inspite of the fact that the Assessing Officer on the result of the field inquiry conducted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /=, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, by carving out instances and circumstances which are exceptional and unavoidable as specified in the said rule, it aids to overcome such requirement of Section 40A (3) of the act and in the case of the present assessee Explanation (g) is made applicable, which reads thus : 6DD : Cases and circumstances in which a payment or aggregate of payments exceeding twenty thousand rupees may be made to a person in a day otherwise than by an account payee cheque drawn or an account payee bank draft. Explanation (g) : Where the payment is made in a village or town, which on the date of such payment is not served by any bank, to any person, who ordinarily r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer. Prima facie, I am not convinced with AO's observation. Necessary evidences were submitted before the Assessing Officer. I also perused the ledger copy relevant of this expenditure. Each payment was less than ₹ 50,000/-. When the Assessing Officer suspected about the genuineness of the appellant's version, he should have made proper inquires on his own. That too, once that appellant filed the basis particulars on this transaction. He could have atleast verified this aspect during remand proceedings. He did not carry out such verification. Mere observation arose out of suspicion would not support AO's case. So he was not right in his approach in 'invoking the section 40(a)(ia) for disallowing the said payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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