TaxTMI 
TaxTMI 
2012 (3) TMI 119
X X X X Extracts X X X X
X X X X Extracts X X X X
....-) on account of cash payment u/s 40A(3) that too without considering the facts of the case. 2. That in any case and in any view of the matter action of ld. CIT(A) in confirming the action of ld. AO in disallowing of Rs. 27,47,516.80/- is illegal, contrary to law and facts, beyond jurisdiction and the same are also not sustainable on various legal and factual grounds. 3. That the assessee craves the leave to add, alter or amend the grounds of appeal at any stage and all the grounds are without prejudice to each other." 2. The facts are that the AO observed that during the year under consideration, the assessee cooperative society was carrying on the business of plying and transportation of cement and food grains; that the assessee had ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that as such, the payments made to the truck owners are not the expenses incidental to the business, as is also evident from the clause 11 of the memorandum of the society and from the income and expenditure account filed along with the return; that the assessee society does not own any truck; that sometimes, before the start of journey the truck drivers require filing of diesel in the truck, for which, patrol pumps have been assigned to supply the diesel and at the time of final payment of transportation, the cost of diesel is adjusted from their bills and paid to the patrol pumps; that as such, the costs for filing of diesel in the trucks are in the nature of advance for transportation charges; that therefore, the payments made to the pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Commissioner of Income Tax Vs. Sirmour Truck Operators Union 236 CTR (HP) 550; 2. Commissioner of Income Tax Vs. Ambuja Darla Kashlog Mangu Transport Cooperative Society 227 CTR (HP) 299 and 3. GA Road Carriers Vs. ITO, Ward-I, Nizamabad, 9 taxmann.com 184 (HYD. - ITAT). 5. The ld. DR, on the other hand, has strongly relied on the impugned order. It has been contended that the disallowance has rightly been confirmed by the ld. CIT(A); that besides crediting the amounts received on account of hire charges, the assessee has also claimed other expenses, as in any other business, like payment on account of diesel, rent, depreciation, etc.; that further, payments were made to patrol pumps otherwise than by account payee cheques, disproving th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat no disallowance u/s 40A(3) of the Act shall be made where payment could not be made by way of cross cheque drawn on a bank or by a cross bank draft, due to exceptional or unavoidable circumstances or because payment in such manner was not practicable or would have caused genuine difficulty to the payee, having regard to the nature of the transaction and the necessity for expeditious settlement there. Before the authorities below, the assessee relied on numerous case laws to contend that it is a general practice that the transporters do not accept payments other than in cash. These case laws are as follows: i) "Deputy Commissioner of Income Tax vs. Shree Vallabh Glass Works Ltd. in (2002) 76 TTJ (Ahd) 652; ii) Nuchem Plastic Ltd. vs. D....