TMI Blog1980 (7) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... n 15 occasions. On each occasion, the payment exceeded the sum of Rs. 2,500. According to the assessee, these payments were so made on urgent demands made by the company. The ITO noticed these payments and in view of the provisions of s. 40A(3) of the I.T. Act, 1961 (hereinafter referred to as " the Act "), declined to accept the explanation given by the assessee and included them in its taxable income. The assessee went up in appeal, which was disposed of by the AAC on November 30, 1973. Two points were raised before him. One was whether the money spent on the purchase of ghee fell within the definition of the word " expenditure " or not. The second point was whether the ingredients of r. 6DD(j) of the I.T. Rules, 1962 (hereinafter refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of 1976 against the decision of the Tribunal and has prayed that the same be directed to refer the following point of law to this court for its opinion: " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the respondent's case was not covered by the exception provided in clause (j) of rule 6DD of the Income-tax Rules, 1962 ? " The reference and the application filled by the assessee are being disposed of by this judgment. As far as Income-tax Reference No. 60 of 1976 is concerned, the question of law involved therein stands concluded against the assessee in view of the Division Bench judgments of this court reported as CIT v. New Light Tin Manufacturing Company [1980] 121 ITR 229, CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate dated 22-8-1972 were made under exceptional circumstances. No copy of the agreement has been produced to suggest that every time cash payment alone was to be accepted by the payee. The fact remains that during some of the months, three payments on different dates had been made and it is hard to infer that every time the transaction concluded or the delivery took place after banking hours and every time the payee was in direct or urgent necessity of cash on account of these sales. We are unable to believe the version put forward on the assessee's side in this regard." The reputation of the supplier company and the fact that it did not charge any interest were not at all taken into consideration. What importance is to be attached to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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