1977 (8) TMI 76

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....e ITO on account of non-compliance by the assessee of the provisions of s. 40A(3) of the IT Act. 2. The assessee-respondent is a registered firm and during the relevant previous year, it was carrying on the business as a selling agent of various sugar mills. The assessee had returned an income of Rs. 1,33,000 but the assessment was completed on an income of Rs. 5,28,390. While making the additi....

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....he sugar mills. The payments were made directly by these customers to the mills in the name of the assessee and sugar was lifted on the authority of the delivery orders issued by the assessee. The sugar mills had no direct privity of contract with these customers and, therefore, they were not willing to accept payments by crossed cheques or drafts for fear of the same being dishonoured. Some times....

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.... otherwise than by a crossed cheque drawn on a bank or by sub-s. (3) of s. 40A. According to him, the payments in dispute were made in the name of the assessee and the assessee could always make such payments by crossed cheques, even in cases where the customers directly lifted the sugar from the mills on the authority of the delivery orders issued by the assessee. The learned counsel for the Reve....