TMI Blog2022 (10) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... parcel of total sale consideration which is reflected in the purchase deed. The sellers also admitted the payment of cash before the registering authority under due process. The contention of ld. AR is that the payment vide cheque or draft is not at all practicable due to circumstances on demand of settlement of purchase consideration in cash from the sellers of the property. Therefore, the ratio laid down in the case of Attar Singh Gurmukh Singh [ 1991 (8) TMI 5 - SUPREME COURT] is applicable and the disallowance as confirmed by the CIT(A) in the hands of assessee on account of section 40A(3) of the Act is deleted. Thus, ground No. 2 raised by the assessee is allowed. - ITA No.364/PUN/2022 - - - Dated:- 30-8-2022 - SHRI S.S. VISWA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee purchased a land for a total consideration of Rs.20,00,000/- and paid Rs.15,00,000/- in cash. The AO invoked the provisions u/s. 40A(3) of the Act and requested the assessee to explain as to why an amount of Rs.15,00,000/- should not be disallowed for violation of payment of consideration in cash beyond the prescribed limit of Rs.20,000/- vide show cause notice. The explanation given by the assessee was reproduced by the AO and the assessee placed reliance on the decision of Hon ble Supreme Court in the case of Attar Singh Gurmukh Singh Vs. ITO reported in (1991) 191 ITR 667 (SC). The AO found that the submissions of assessee is not acceptable and added an amount of Rs.15,00,000/- to the total income of the assessee on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in the case of Attar Singh Gurmukh Singh (supra) and proceeded to add the said amount by holding the explanation of assessee is not covered by exceptions contained in Rule 6DD of the Rules. The ld. AR referred to order of this Tribunal in the case of ITO Vs. M/s. Dhanshree Ispat in ITA No. 794/PUN/2013 for A.Y. 2009-10 vide order dated 31-05- 2017 and drew our attention to para No. 5 of the said order and argued that this Tribunal while placing reliance on the decision of Hon ble Supreme Court in the case of Attar Singh Gurmukh Singh (supra), Hon ble High Court of Rajasthan in the case of Smt. Harshila Chordiya Vs. ITO reported in 298 ITR 349 (Raj.) and Hon ble High Court of Punjab and Haryana in the case of Gurdas Garg Vs. CIT reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Income Tax Appeal (L) No. 2128 of 2018 vide order dated 08-10- 2018. He submits that the Hon ble High Court of Bombay dismissed the appeal of assessee confirming the disallowance made u/s. 40A(3) of the Act. He argued the ratio laid down by the Hon ble High Court of Bombay is applicable to the facts and circumstances of the present case and supported the order of CIT(A). 8. Heard both the parties and perused the material available on record. I note that the assessee placed reliance on the decision of Hon ble Supreme Court in the case of Attar Singh Gurmukh Singh (supra) before the AO and the order of this Tribunal in the case of Dnyaneshwar Jagannath Dhamne (supra) before the CIT(A). The AO held the exceptions under rule 6DD are not co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n perusal of the same, I note that the payment in cash was part of sale consideration which is incorporated in the purchase deed. The ld. AR placed on record a copy of purchase deed in Marathi before this Tribunal. 9. This Tribunal in the case of ITO Vs. M/s. Dhanshree Ispat (supra) by following the decision of Hon ble Supreme Court in the case of Attar Singh Gurmukh Singh (supra) deleted the addition made u/s. 40A(3) of the Act vide para 7 of the said order by holding when the transaction is genuine no disallowance is warranted. In the present case also the cash payment forming part of sale consideration was incorporated in the purchase deed and a contention was made before the AO that on the demand of the sellers having no faith amongs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble High Court of Bombay did not observe that Rule 6DD is not exhaustive. On perusal of the relevant para 9 of the said decision, I note the Hon ble High Court of Bombay was pleased to observe that Rule 6DD of Rules enables the assessee to urge that the exceptional or unavoidable circumstances led to payment made in cash. Therefore, I find force in the arguments of ld. AR that Rule 6DD is exhaustive and it is open to the assessee the exceptional and unavoidable circumstances which made the assessee to make payment in cash. As already discussed above, the contention of the assessee from the day one is that the sellers demanded the assessee to pay in cash which is part and parcel of total sale consideration. Further, there is no disput ..... X X X X Extracts X X X X X X X X Extracts X X X X
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