2013 (10) TMI 282

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....ng substantial question of law:- "Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that there was an unavoidable or exceptional circumstance existed which compelled the assessee to make payment in cash, in violation of provisions of Section 40 A (30 of the Income Tax Act, 1961, read with Rule 6 DD(J)?" The brief facts of the case are that the respondent-assessee is engaged in manufacture and trading of sugar, khand and boora. On his case being selected for scrutiny, proceedings under Section 143 (2) of the Act were initiated, inter alia, on the ground that the assessee having made cash payments in excess of Rs.10,000/- in contravention of the provision Section 40 A (3) of the Act, the s....

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....king hours and have been made in cash as per requisition of Sugar Corporation to lift the sugar in time to make supplies to the parties. The U.P. State Sugar Corporation Bareilly is a sick unit and all its stock of sugar is hypothecated to Punjab National Bank, Civil Lines, Bareilly. Thus as per the instructions of the Corporation, the assessee has made payments in the bank account of the Corporation directly in Bank or in case of payments made after banking hours, the payments have been made at Mill counter as directed by the Corporation to enable them to meet their daily expenses and excise duties payments. Such fact is clearly mentioned in the certificate issued by the Corporation which inter alia provides that the cash was deposited in ....

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....t M/s Khandelwal Sugar Stores, Shiamganj, Bareilly had lifted sugar from this unit from 1.4.1989 to 31.3.2000 deposit of cash at Mill counter or deposits of value in Punjab National Bank A/c No.649 in our account. The cash was deposited in the factory after banking hours for meeting day to day payments of excise duty etc. We normally accept cash to avoid lapse of monthly quota in view of our being sick unit and avoid acceptance of cheques against sugar deliveries." The CIT (A), accordingly, by its order dated 21.4.1993 directed that the addition of Rs.13,43,790/- be deleted and held that the assessee would be entitled to relief in respect of the said amount of Rs.13,43,790/-. Aggrieved by the order dated 21.4.1993 of the CIT (A), the Re....