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TMI Blog1985 (7) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had issued memos to the parties on the purchase. However, on no occasion the signature of the persons was taken nor stamped receipts was given. The AO did not accept the contention that the quantity records maintained by the assessee would do, when it was not able to establish the genuineness of the purchases made by it from its customers as above, It was not able to obtain confirmation from the parties for having sold the assessee their silver ornaments. The ITO found that four purchase form Shri R.L. Soni, Bherumal Shamaldas and Ratansingh Kahaassing, the assessee had paid in case over Rs. 2,500 and therefore, such amounts could not be allowed in view of the statutory provisions of s. 40(3). However, as he was disallowing Rs. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance should have been made, In this connection he invited our attention to the observation at. p 142 in the judgment in the case Hasanand pinjomal vs. CIT 1977 CTR (Guj) 486 : (1978) 112 ITR 134 (Guj). The observations are to the effect that the purpose of the said provision was to check tax evasion by payments made with unaccounted money posed by the assessee. Since, according to him in the present case the assessee' books were accepted there was no such possibility of tax evasion and so the said disallowance was not justified. He then stated that in the assessee's case r. 6DD was fully applicable and so the disallowance under the said section could not be made. 5. The ld. Departmental Representative replied that separate bills w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the total circumstances. We have therefore to take into account the said r. 6DD. the relevant part of it is as follows: (i) in any other case, where the assessee satisfies the ITO that the payment could not be made by a crossed cheque drawn on a bank or by a crossed bank draft— (1) due to exceptional or unavoidable circumstances, or (2) because payment in the manner aforesaid was not practicable, or would have caused genuine difficulty to the payee, having regard to the nature of the transaction and the necessity for expeditious settlement thereof. and also furnishes evidence to the satisfaction of the ITO as to the genuineness of the payment and the identity of the payee." Clause (1) mentions not only exceptional but also unav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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