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TMI Blog1976 (2) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 on each of the three dates and should have been made only by crossed cheque or bank draft as required under s. 40A(3), the ITO required the assessee to explain the circumstances in which the payments had been made in cash. The assessee made by it to N.P.K. Fertilisers and subsequently, the latter supplier fertiliser to it. The assessee had brought the amount in cash from Anand Nagar where it carries on business to Gorakhpur, but as no purchases were made the amounts on the aforesaid dates were deposited with N.P.K. Fertilisers. Thus, on the date of the deposit it was not an expenditure but was a cash deposit. The ITO did not accept this explanation. The supply of goods by N.P.K. Fertiliser was made as under : 19-7-1971 8,510 24-10-197 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced the onus on the Department to controvert those assertions. The position, on the other hand, is that the onus is on the assessee to prove the special and unavoidable circumstances in which the payment had to be made in cash. A mere assertion cannot take place of evidence. Thus, according to the Departmental Representative the assessee should have proved these circumstances and then alone the Department could have been required to controvert such evidence. On behalf of the assessee, on the other hand, Shri S.N. Agarwal, drew my attention to the reply filed by the assessee before the ITO on 14th Oct., 1974. It was stated that letter that these amounts were in the form of advances made by the assessee to N.P.K. Fertilisers. The assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade before the actual supply of goods, but it cannot be said that there was no correlation between the payment of the money and the supply of goods. The deposit of Rs. 4,000 was made on 17th July, 1971 which goods worth Rs. 8,510 were supplied on 19th July, 1971. After adjusting the amount of Rs. 4,000 there was still a sum of Rs. 4,510 to be paid for these goods. Similarly Rs. 7,000 was deposited on 15th Oct., 1971 and good worth Rs. 4,030 were supplied on 24th Oct., 1971. In other words, this amount was adjusted against these goods and the balance price of the goods supplied on the earlier date. On 11th Nov., 1971 the amount deposited was Rs. 12,445 while on 26th Nov., 1971 goods worth Rs. 12,945 were supplied. After adjusting this amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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