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TMI Blog2006 (1) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... rected against the order of the Income-tax Appellate Tribunal in I.T.A. No. 879/Mds/2000 dated July 15, 2005, raising the following substantial questions of law: "(a) Whether, in the facts and circumstances of the case, the Tribunal was right in interpreting the provisions of section 40A(3) with regard to the word 'sum' used therein, i.e., as to whether it would indicate total sum or would it ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal was allowed. Hence, the Revenue preferred an appeal before the Tribunal, which upheld the order of the Commissioner. Hence, the present appeal. Heard Mr. J. Narayanaswamy, learned counsel appearing for the Revenue at length. In this regard, it would be apt to refer section 40A(3) of the Act, which reads as follows: "Expenses or payments not deductible in certain circumstances. - (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ousand rupees otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft, the allowance originally made shall be deemed to have been wrongly made and the Assessing Officer may recompute the total income of the assessee for the previous year in which such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 ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Tribunal was right in holding that section 40A(3) of the Act would apply only if each item of the expenditure involved in a single bill for several items exceeds Rs. 2,500. It is true that this court answered the said question in favour of the Revenue. But, concededly, the facts and circumstances of the said case are with reference to the payment made in cash for each item of expenditure in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if it exceeds that amount, then such expenditure shall not be allowed as deduction. It does not say that the aggregate of the amount should not exceed Rs. 2,500. The words used are "in a sum", i.e., single sum has been used. Therefore, irrespective of any number of transactions, where the amount does not exceed Rs. 2,500 as above, the rigours of section 40A(3) will not apply. Now, the amount shou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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