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TMI Blog2017 (6) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 6 DD(h) of the I.T. Rules, on merit, proceed to adjudicate the claim under Rule 6 DD (j) of I.T. Rules ?" 2. At the joint request of the Counsel, the substantial question of law is being reformulated for consideration as under:- "Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in applying Rule 6DD(j) of the Income Tax Rules,1962 (Rules) to disallow the claim of the appellant in respect of Rs. 21.37 lakhs in respect of payments made in excess of Rs. 10,000/- in cash?" 3. This appeal relates to Assessment Year 1991-92. 4. The appellant has its factory at village Devada in Bhandara district. The village Devada has no banking facilities. In that view of the matter, the appellant had occa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded from the application of Section 40A(3) of the Act as the Rule 6DD(h) and (j) of the Rules was not satisfied. Thus the assessment order dated 30.03.1993 added the aforesaid sum of Rs. 21.37 lakhs to the income of the appellant-assessee. 6. Being aggrieved, the appellant carried the issue in appeal to the Commissioner of Income Tax (Appeals) (CIT(A)). By an order dated 22.03.1995, CIT(A) dismissed the claim of the appellant while recording the fact that the appellant had failed to prove the genuineness of the payments, as no bills/vouchers in support of the payment made in cash, were produced. Thus upholding the order dated 30.03.1993 of the Assessing Officer. 7. Being aggrieved, the appellant filed a further appeal to the Tribunal. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich payment is made, after such date (not being later than the 31st day of March, 1969) as may be specified in this behalf by the Central Government by notification in the Official Gazette, in a sum exceeding ten thousand rupees otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft, such expenditure shall not be allowed as a deduction:- Provided that where an allowance has been made in the assessment for any year not being an assessment year commencing prior to 1.4.1969, 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 ten thousand rupees otherwise than by a crossed cheque drawn on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .................. (e) ................... (f) .................. (g) .................... (h) 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 resides, or is carrying on any business, profession or vocation, in any such village or town; (i) ................... (j) in any other case, where the assessee satisfies the Assessing Officer that the payment could not be made by a crossed cheque drawn on a bank or by a crossed bank draft (1) due to exceptional or unavoidable circumstances, or (2) because payment in the manner aforesaid was not practicable, or would have caused genuine difficulty to the payee, having regard to the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a common impugned order relating to Assessment Year 1986-87 and 1991-92. The impugned order refers to the fact that wherever the genuineness of the payments were established, the benefit of Rule 6DD(j) of the Rules was made available to the appellantassessee. For the subject assessment year, the appellantassessee was not able to establish the genuineness of the payments of Rs. 21.37 lakhs made to transporters, contractors and suppliers of rice straw. Thus the benefit of exclusion from Section 40A(3) of the Act was rightly not extended by the Authorities under the Act. (B) Further the application of Rule 6DD(j) of the Rules in the present facts cannot be found fault with for the reason that the appellant-assessee had not established that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be allowed. 12. In terms of Rule 6DD(h) of the Rules, a person who makes the payment in a village, which does not have the facility of banking, to a person who ordinarily resides therein or is carrying on business therein, will be allowed the benefit of deduction even when the expenditure is not paid by a crossed cheque drawn on a bank or by a crossed bank draft. However, it is for the assessee who seeks to claim the benefit of the second proviso of Section 40A(3) of the Act and Rule 6DD of the Rules to establish that its case falls within the precincts of Rule 6DD(h) of the Rules. Admittedly, the appellant-assessee has led no evidence before the Authorities under the Act to show that the transporters, contractors and suppliers of rice s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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