TMI Blog2023 (3) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... bank account. We find that although the assessee tries to make out a case of business exigency, but reasons given by the assessee to make cash payment does not come under any exception as provided u/r.6DD of IT Rules. Genuineness or otherwise of payment is not a criteria to exclude cash payment in excess of prescribed limit from the provisions of Sec.40A(3) of the Act. In this case, there is no dispute that the assessee has made cash payments in excess of prescribed limit and further reasons given by the assessee for making cash payment does not come under any exception as provided under u/r.6DD of IT Rules. The assessee had also failed to make out a case of business exigency in making cash payment, because, it was the claim of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #2310;यकर अपीलीय अिधकरण, सी !ायपीठ, चे$ई। 4. The Ld.CIT(A) failed to consider that the sub-contractors insisted cash payment for expenditure which the nature of business calls for. 5. The Ld. CIT(A) ought to have seen that the cash was deposited as and when the sub-contractors required for meeting the postdated cheques issued for hire purchase installments. 3. The brief facts of the case are that the assessee is a partnership firm engaged in lorry transport business, filed its return of income for the AY 2011-12 on 27.07.2011 declaring total income of Rs.2,63,184/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance to persons like M/s ML.Shivali Rai, Sharmila Devi, S.L.Roadways in cash exceeding Rs.35,000/- in same day and the payments were remitted in the recipient bank account in cash which is equivalent to payment in cash. (2) Some of the Vouchers titled Trip Advance are without details of recipient. (3) One payment of Rs.5 lakhs made on 31/03/2011 as trip Advance to 13 vehicles and each vehicle is paid Rs.38,500/-. (4) In respect of Rs.6 lakhs paid on 31/03/2011 as Lorry Hire advance to ML as per cash book the assessee has not produced any vouchers. The assessee has made payments attracting the mischief of section 40A(3). The payments as detailed in annexure amounting to Rs.35,59,087/- is disallowed u/s.40A(3) and adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venience. Therefore, the assessee has directly credited cash through bank account and thus, argued that payment made by the assessee are genuine in nature which are outside the scope of provisions of Sec.40A(3) of the Act. 6. The Ld.DR, on the other hand, supporting the order of the Ld.CIT(A), submitted that what is required to be seen in light of provisions of Sec.40A(3) of the Act, is whether any expenditure has been incurred in excess of prescribed limit, otherwise than by an account payee cheque or bank draft or use of electronic clearance system but, genuineness or otherwise of payment is not a criteria to exclude those payments from the purview of said provision. If at all, the case of the assessee comes under any one of exception ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of prescribed limit from the provisions of Sec.40A(3) of the Act. In this case, there is no dispute that the assessee has made cash payments in excess of prescribed limit and further reasons given by the assessee for making cash payment does not come under any exception as provided under u/r.6DD of IT Rules. The assessee had also failed to make out a case of business exigency in making cash payment, because, it was the claim of the assessee that cash has been directly credited into bank accounts of sub-contractors and said bank accounts are maintained in one bank. In our considered view, the assessee could have made payment through one of the of the modes provided u/s.40A(3) of the Act. Since, the assessee has paid in cash in excess of pres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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