https://www.taxtmi.com/caselaws?id=15889 Cash payments exceeding the statutory limit were disallowed under s. 40A(3) on the premise that financial stringency and deferred payments could not constitute "exceptional or unavoidable circumstances" under r. 6DD(j). The HC held that s. 40A(3) is a preventive provision to curb tax evasion and unaccounted money, not to penalise genuine transactions. Where the transaction is genuine and the payee's identity is established, a liberal construction of compelling circumstances under r. 6DD(j) is warranted; mere delay between billing and payment does not negate the exception. As no authority found the payments non-genuine and the payee identity stood established, the Tribunal's contrary inference was a legal error, and the deduction was allowed. en-us Fri, 08 Oct 1999 00:00:00 +0530 Thu, 01 Jan 2026 18:18:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=15889 Cash payments exceeding the statutory limit were disallowed under s. 40A(3) on the premise that financial stringency and deferred payments could not constitute "exceptional or unavoidable circumstances" under r. 6DD(j). The HC held that s. 40A(3) is a preventive provision to curb tax evasion and unaccounted money, not to penalise genuine transactions. Where the transaction is genuine and the payee's identity is established, a liberal construction of compelling circumstances under r. 6DD(j) is warranted; mere delay between billing and payment does not negate the exception. As no authority found the payments non-genuine and the payee identity stood established, the Tribunal's contrary inference was a legal error, and the deduction was allowed. Case-Laws Income Tax Fri, 08 Oct 1999 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=15889