TMI Blog1996 (4) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... iving income from rice milling, purchase and sale of foodgrains and pulses. A return of income was filed on July 30, 1982, showing income of Rs. 49,356 and the assessment was completed on a total income of Rs. 10,72,440. The Income-tax Officer made a disallowance of Rs. 8,72,130 under section 40A(3) represented by payments shown to have been made being purchase price of rice to 57 different parties. The Income-tax Officer observed that the managing partner of the assessee-firm, Shri Kanhaiyalal Kothari, drew the cheques, encashed these from the banks and himself received the payments from the bank. Shri Kothari deposed before the Income-tax Officer that he drew bearer cheques, got them encashed and paid cash to the parties, as they demanded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the finding of the Commissioner of Income-tax (Appeals) and it was observed that it is covered by rule 6DD and also the Board's Circular No. 220, dated May 31, 1977. Hence, the Revenue approached the Tribunal for making reference before this court of the aforesaid question of law. We have gone through the matter in detail. It is true that before the Income-tax Officer, no evidence was led by the assessee to show as to whether these transactions were bona fide or they lacked bona fides. Therefore, the Income-tax Officer inferred that the assessee has failed to account for these items and payments made thereafter were in contravention of section 40A(3). He concluded that no transaction took place. But as against this, the appellate author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances were found to be satisfied in order to explain the payment in cash. Therefore, the Tribunal also accepted those transactions and found that the transactions to the extent of Rs. 8,72,130 were properly accounted. Learned counsel for the Revenue has strenuously urged before us to show that the trucks through which the goods were said to have been received were not genuine ones and the numbers of trucks were some of the cars and scooters. Therefore, the whole transaction is doubtful. It may be true but essentially it is a question of fact. The Commissioner of Income-tax (Appeals) and the Tribunal were satisfied with the explanation given by the assessee on each of the 57 items. Therefore, there is no ground for us to go into this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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