2015 (2) TMI 850

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....009-10. 2. The facts in this case would disclose that the assessee being a partnership firm, undertakes transporting contract for transportation of goods for various organisations. During the assessment year, the assessee has spent Rs. 4.77 crores towards lorry hire charges of which the assessee had paid a sum of Rs. 1,06,69,600 in cash, contrary to the provisions of section 40A(3) of the Income-tax Act. The Assessing Officer disallowed the said amount. The assessee preferred an appeal before the Commissioner of Income-tax (Appeals), which stood dismissed against which the appeal was preferred before the Tribunal, which also came to be dismissed. 3. The main contention urged by the appellant is that the assessee was maintaining accoun....

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....angers for one-time transportation in cash exceeding the prescribed limit of Rs. 20,000 is out side the ambit of business expediency as provided under the proviso to section 40A(3) of the Act ?             (iii) Whether, on the facts, and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in holding that the relationship of the drivers of the lorries hired for transportation of goods towards the appellant was not that of an agent for the purpose of rule 6DD(k) of the Income-tax Rules ?         (iv) Whether, on the facts, and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in holding tha....

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....uch cases and under such circumstances as may be prescribed, having regard to the nature and extent of banking facilities available, considerations of business expediency and other relevant factors." Rules have been prescribed under rule 6DD(k), which reads as under :               "(k) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person ;" The appellate authorities found that the assessee was engaging lorries on hire from the market through brokers. The assessee was not paying any amount to the concerned lorry owners. Even, according to the assessee, lorry freights are finalised w....