1994 (3) TMI 158

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....nt received as cash incentive. This ground is accordingly rejected. 2. Ground No. 2 in the appeal pertains to the disallowance effected by the Assessing Officer in a sum of Rs. 28,682 under s. 40A(3) and which was subsequently confirmed by the CIT(A). The Assessing Officer in the course of the assessment proceedings came across the following payments having been made in violation of provisions of s. 40A(3): Date Amount Account debited 13.4.84. Rs. 3,250 Repairs & Renewals 2.7.84 10,000 Mr. Nem Singh 14.11.84 3,000 Mr. Than Singh 11.12.84 2,600 Mr.Than Singh 10.01.85 2,540 Carriage Inward 10.01.85 3,819 Carriage Inward 9.02.85 3,473 Cartage Account . 28,682 .....

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....y provisions of r. 6DD(j) wherein it is specified that any payment by way of gratuity or compensation on the death of an employee to his legal heir is allowable if paid in cash. Moreover, the legal heirs of the labourers are illiterate and they do not have any bank account and they insisted for cash payment. (iii) The appellant paid Rs. 3,000 and Rs. 2,600 to one Mr. Than Singh another labourer as wages for the repair and maintenance work undertaken by him in the factory during two different periods and the payments are also separately of Rs. 3,000 and Rs. 2,600. Since in this case also the payee was not having any bank account he insisted for cash payment and the same has been made. (iv) The Appellant has paid Rs. 2,540 to a Thelewal....

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.... CIT(A) and placed reliance on the decision of the Hon'ble Supreme Court in the case of Attar Singh Gurmukh Singh vs. ITO (1991) 97 CTR (SC) 251 : (1991) 191 ITR 667 (SC). 7. We have examined the rival submissions and have also perused the material on record, to which our attention was invited by the parties. The decisions cited at the bar have also been duly considered. In our opinion, no disallowance is required to be made within the meaning of s. 40A(3) either on facts or in accordance with the provisions of law. As stated by the learned counsel, party No. 1, namely, Shri Hukam Singh to whom a sum of Rs. 3,250 has been paid in cash for repair of a generator is not known to the assessee and he refused to accept payment in a mode other ....

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.... at all applicable on the facts and circumstances of the present case. In the final analysis, we delete the disallowance made by the Assessing Officer and confirmed by the CIT(A). 8. The only other ground which remains for our consideration is the one pertaining to the disallowance of the claim for investment allowance of a computer. The assessing officer rejected the claim for deduction in a sum of Rs. 13,750 on the ground that computer was an "office appliance" having been installed in the office of the assessee-company. On further appeal the CIT(A) confirmed the action of the Assessing Officer although it was contended before him that the computer was not installed in the office premises, but in the factory premises. According to the ....