TMI Blog2020 (3) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... any fault with the payment nor has disbelieve the payment made for the coal suppliers who are duly registered with the VAT department. The payment has not been doubted by the A.O. or by the Ld. CIT(A), hence looking to the facts that the payments were made after the banking hours and that too at village Ballarpur, where there are no banking facilities, we are of the considered opinion that even this amount should not have been disallowed u/s 40A(3) read with Rule 6DD of the Income-Tax Rules as the CIT(A) had observed in respect of payments made to truck drivers where he deleted the part cash payment. In that matter, the CIT(A) was not justified in confirming part additions under the same set of facts. - Decided in favour of assessee. - IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble tobe deleted. The assessee craves leave to add, alter, amend or withdraw any of the above ground(s) ofappeal during the course of hearing. The assessee has raised the revised/additional ground as follows: The aforesaid appeal has been fixed for hearing on 04.05.2017. In the aforesaid appeal in Ground no. 1 Rule 6DD(h) was inadvertently typed in place of Rule 6DD(j). Thus, the assessee (appellant) wishes to revise the Ground no. 1 as above. Further, the assessee also wishes to raise an additional ground for judicious disposal of the appeal. All the necessary material relating to this ground of appeal is already on record. No new facts are to be investigated. The appellant prays and seeks your honours permission and leave to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the addition at ₹ 27,07,320/-. The relief provided of ₹ 2,58,194/- was in respect of payment made to truck drivers as the Ld. CIT(A) observed that the nature of the payments coupled with the fact of non - existence of banking facility in village Ballarpur, the appellant could take advantage of Rule 6DD of the Income Tax Rules and hence disallowance to the extent of ₹ 2,58,194/-was deleted by the Ld. CIT(A). The Ld. CIT(A) in respect of payment made to agents of coal suppliers of ₹ 27,07,320/- observed that the suppliers had not insisted for cash payments and hence he upheld the addition to that extent. 4. Apropos the first three and the additional grounds, the Ld.A.R. of the appellant Shri Deependra Mohan has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (g) of Rule 6DD it is submitted that the village Ballapur from where the assessee operates was not having banking facilities on the said date. To substantiate this fact the certificate of Gram Pradhan was also submitted. Even the assessee was having a bank account in SBI, Auraiya which is 30 kms far from the assessee's business place. As regards applicability of clause (j) it is submitted that the payments have also been made on Sundays and Bank Holidays. These cases clearly fall in exception provided in clause (j). 1.1 The assessee has mostly made payments below ₹ 20,000/- and these payments are specifically excluded from the ambit of disallowance as mentioned in section 40A(3) of the Income-tax Act, 1961. 1.2 That the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowed business practices in the area and of he does not adopt the same business practices he will not be able to run the business. Thus, the payments made by the assessee fall within the proviso to section 40A(3) which clearly states Provided that no disallowance shall be made and no payment shall be deemed to be the profits and gains of business or profession under sub-section (3) and this sub-section where a payment or aggregate of payments made to a person in a day otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, in such cases and under such circumstances as may be prescribed, having regard to the nature and extent of banking facilities available, considerations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) had in similar circumstances allowed part relief to the assessee stating that banking facilities were not there at village Ballarpur, whereas for the other part disallowance was upheld by the Ld. CIT(A). 6. We have heard both the sides on this issue and have perused the relevant material on record with regard thereto. The assessee firm is engaged in the business of running a brick kiln where coal is used as a primary fuel. As per the Ld. A.R. coal is supplied to these brick kilns by agents of the coal supplier at the brick kiln itself and these agents ask for cash payments, as they have to make the payment to the truck drivers for the fare as well as for the coal amount to their principals. The auditors in their tax audit report have a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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