Cash payment exceptions under section 40A(3) permit non-crossed payments when unavoidable and supported by genuine evidence. Payments made otherwise than by crossed cheque or bank draft will not be disallowed if the taxpayer establishes the genuineness of the payment, identifies the payee, and persuades the tax officer that payment fell within exceptions such as exceptional or unavoidable circumstances or impracticability or genuine difficulty for the payee. Illustrative examples include new trading relationships, absence of bank accounts, bank holidays, seller refusal, commission agent requirements, and cash discounts. A seller's letter with identification particulars is recommended and the tax officer must record satisfaction before allowing the benefit.
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Provisions expressly mentioned in the judgment/order text.
Cash payment exceptions under section 40A(3) permit non-crossed payments when unavoidable and supported by genuine evidence.
Payments made otherwise than by crossed cheque or bank draft will not be disallowed if the taxpayer establishes the genuineness of the payment, identifies the payee, and persuades the tax officer that payment fell within exceptions such as exceptional or unavoidable circumstances or impracticability or genuine difficulty for the payee. Illustrative examples include new trading relationships, absence of bank accounts, bank holidays, seller refusal, commission agent requirements, and cash discounts. A seller's letter with identification particulars is recommended and the tax officer must record satisfaction before allowing the benefit.
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