TMI Blog2023 (1) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... orting evidence, no relief could be granted. Therefore, reject this plea of learned counsel. Assessee has placed reliance on the judgment of Attar Singh Gurumukh Singh [ 1991 (8) TMI 5 - SUPREME COURT] wherein it has been held that the term of Section 40A(3) are not absolute. Consideration of business expediency and other relevant factors are not excluded. Therefore, looking to the facts where the assessee has made clear averments regarding business expediency and the Revenue has not rebutted the same. We direct the Assessing Officer to delete the impugned disallowance. Decided in favour of assessee. - ITA No. 905/DEL/2022 - - - Dated:- 2-1-2023 - SHRI KUL BHARAT, JUDICIAL MEMBER Assessee represented by : Sh. Vinod Garg, CA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g order. 4. That the appellant craves leave to add, delete or amen' grounds of appeal on or before the disposal of appeal. 2. Facts giving rise to the present appeal are that case of the assessee was taken up for scrutiny assessment and the assessment u/s 143(3) of the Income-tax Act, 1961 (in short the Act ) was framed vide order dated 05.12.2018. The Assessing officer while making the assessment noticed that the assessee had violated the provisions of Section 40A(3) of the Act, as expenditure was incurred in cash in excess of the mandatory limit. Aggrieved against this, the assessee preferred appeal before the learned CIT(Appeals), who also sustained the addition to the extent of Rs. 12,62,990/- as per Rule 6DD of Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee entitled for exemption from applicability of the provisions of Section 40A(3). It was incumbent upon the assessee to bring positive evidence in support of his contentions. 5. I have heard the rival contentions and perused the material available on record. The submissions of the assessee can be summed up as under: (a) The payments were made under the business expediency as the suppliers insisted payment in cash. (b) There was no banking facility at the place of payment and the suppliers were not holding bank accounts. (c) Certain payments during the bank holidays and finally the payments were made to the category of persons who fall under clause (f) of Rule DD of Rules, hence excluded. 6. The learned CIT(Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inding of learned CIT(Appeals) it is clear that clause (f) of Rule 6DD of the Rules was not considered by the learned CIT(Appeals). Looking to the facts, the lower authorities have not doubted the genuineness of the payment. As per clause (f), any payment made for the products for purchase of the products manufactured or processed without aid of power in a cottage industry, such payments to the producer of such products would be excluded from the disallowance u/s 40A(3) of the Act. The claim of the assessee is, therefore, rest on the assertion that the case of assessee fall under clause (f) of Rule 6DD of Rules and explanation to Section 40A(3) of the Act. Learned counsel for the assessee primarily rested his arguments on the transactions b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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