TMI Blog2017 (6) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... s covered by the exception Rule 6DD(b) of the IT Rules and as such no disallowance u/s. 40A(3) of the Act can be made. Therefore, the grounds raised by the assessee are allowed. - I.T.A No. 732/Kol/2015 - - - Dated:- 7-6-2017 - Shri P.M.Jagtap, Accountant Member and Shri S.S. Viswanethra Ravi, Judicial Member For the Appellant : Shri Soumitra Choudhury, Advocate, ld.AR For the Respondent : None appeared/Adj. Petition filed, but rejected ORDER Shri S.S.Viswanethra Ravi, JM: This appeal by Assessee is against the impugned order dt. 27-03- 2015 passed u/s. 263 of the Act by the CIT(A), Burdwan for the assessment year 2010-11. 2. It is noticed that none appeared for the respondent Revenue, but, however, an applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dt. 17-12-2012. 5. The CIT by exercising his power u/s. 263 of the Act on a reference from the JCIT, Range-2, Burdwan under revision found that the assessee has debited ₹ 3,03,957/- towards power charges payment made to West Bengal State Electricity Distribution Company Limited (WBSEDCL) in the P L account. According to CIT the said payments were made in cash to West Bengal State Electricity Distribution Company Limited (WBSEDCL) in contravention of the provisions contemplated in Section 40A(3) of the Act. Under show cause, the assessee submitted that the revision initiated u/s. 263 by the CIT is barred by limitation and West Bengal State Electricity Distribution Company Limited (WBSEDCL) is controlled by Govt. of West Benga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the above stated discussions the order passed by the AO is erroneous as well as prejudicial to the interest of Revenue. Therefore, proceedings initiated u/s. 263 is as per law. It may be mentioned here that under Rule 6DD(b) payment made to the Government and, under the rules framed by it, such payment is required to be made in legal tender. The payment made to West Bengal State Electricity Distribution Company Limited does not appear to fall under this exclusion clause as such. However, the A.O is directed to re-assure himself by making further enquiry and investigation whether such payment falls under rule 6DD(b) or any other exclusion clause of rule 6DD and then to take action as per law. 6. Before us the ld.AR reitera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuineness of such payments made to West Bengal State Electricity Distribution Company Limited (WBSEDCL). We find that the CIT assumed his jurisdiction only on the ground that the said cash payments were made on different dates and the same do not fall under any of the exceptions of Rule 6DD of the IT Rules. The CIT also found that inspite of opportunities availed by the assessee, the assessee did not point out any specific section/rule clause on which such payment is outside the proviso of Section 40A(3). Admittedly, the assessee paid such cash payments towards power charges to West Bengal State Electricity Distribution Company Limited (WBSEDCL) and debited the same to its P L account on different dates from April 09 to Feb 10. In such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sport Corporation Vs. Diwakar Madhukarrao Malkapure and Others in Writ Petition No.2762/2012 decided on 12-11- 2013 while dealing with an issue relating to payment of compensation to one of the employee of MSRTC has observed as under : The Petitioner employer is a body Corporate and is State within the meaning of Article 12 of the Constitution of India and therefore it has to act as a Model Employer. 14. Thus, in view of the facts of the case and in the light of observations of the Hon'ble Bombay High Court, we are of the considered opinion that the CIT(A) has erred in holding that MSRTC is not a State and cash payments made to MSRTC are hit by the provisions of section 40A(3) of the Act. 15. In so far as genuineness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f which payment is not made by crossed cheque 0n crossed bank draft. The payment by crossed cheque or crossed bank draft is insisted on to enable the assessing authority to ascertain whether the payment was genuine or whether it was out of the income from undisclosed sources. The terms of section 40A(3) are not absolute. Considerations of business expediency and other relevant factors are not excluded. Genuine and bona fide transactions are no taken out of the sweep of the section. It is open to the assessee to furnish to the satisfaction of the Assessing Officer the circumstances under which the payment in the manner prescribed in section 40A(3) was not practicable or would have caused genuine difficulty to the payee. It is also open to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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