TMI Blog1979 (12) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2. Whether the payees' insistence to be paid in cash can be construed as an exceptional or unavoidable circumstance within the meaning of clause (j) of rule 6DD of the I.T. Rules, 1962 ? " Assessee is a registered firm and deals on wholesale basis in potato and onion. It has also dealing on commission basis in those articles. The relevant assessment year is 1974-75 ending with March 31, 1974. In the course of assessment proceedings, the ITO found that the assessee had paid to the tune of Rs. 1,l0,024 in cash to different persons and called upon him to show cause as to why these payments should not be disallowed as revenue expenditure in view of the contravention of s. 40A(3) of the Act. The assessee explained that payments were ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be said that the assessee knew before it made the first payment as to how much it would pay during the day. The agents of the payees came from outside station and stayed for a day or two in the course of which they took money, in cash, as and when needed by them during the course of their stay at the place of the assessee's business. The mere fact that the assessee made one entry in the cash book for all the payments made to a single party in the course of the day does not, in our opinion, lead to the conclusion that the assessee knew at the beginning of the day all the payments that it would make to that party in the course of the day. The amount paid by the assessee depended not only on, its cash balance but also on the demand of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has paid a sum exceeding Rs. 2,500 in different instalments, the total having exceeded the prescribed amount, the section operated. The argument does not at all impress us. The word sum has been used there to convey the meaning of amount " and not the sum total figure. The Reader's Digest Great Encyclopaedic Dictionary gives one of the meanings of " sum " as " a quantity or amount of or of money ". The Oxford English Dictionary gives one of the meanings of the word to be a quantity of money of a specified amount. In Bouvier's Law Dictionary the meaning of the word has been given as a quantity of, money or currency. The Webster's Universal Unabridged Dictionary gives the same meaning of the word " sum ", i.e., a quantity of money o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the provision in question unless any one payment is above Rs. 2,500. Section 40A appears in Chap. IV of the Act dealing with computation of total income and is classified under the sub-heading in group D " Profits and gains of business or profession ". Parliament must have intended a working rule and unless by clear meaning of the words a different intention appears, we must give the provision a construction which would make the provision workable. Our answer to the first question, therefore, is : The statutory limit of Rs. 2,500 under s. 40A(3) of the Act applies to payments made to a party at a time and not to the aggregate of payments made to a party in the course of the day as recorded in the cash book. In view of such a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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