2007 (7) TMI 664

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....on for the opinion of this Court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that various cash payments made to one party on one day were not required to be clubbed and treated as one cash payment and, for that reasons, total cash payment and, for that reason (sic), total cash payments exceeding Rs. 2,500 in a day to that party were not to be held as violative of section 40A(3) of the Income-tax Act?" 2. The respondent-assessee filed its return on 30-7-1986, in respect of the assessment year 1986-87 declaring its income of Rs. 97,150. The Assessing Officer issued notices under sections 142(1) and 143(2) along with a questionnaire dated 17-12-1986 which were duly served upon the ....

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....of the Tribunal is discernible from Para Nos. 12 and 13 of the judgment which reads as under:- "12. We have considered the rival contentions and we are of the view that the matter has been examined in detail by the CIT(A) in respect of each of the payees and, therefore, we do not intend to interfere with the finding of fact. It has been noted by the CIT(A) that certain payments had been made by the assessee in the bank account of the payee and, therefore, such payments were not found to be cash payments. Though these were not by way of crossed bank draft or crossed cheque, looking to the nature of payment and bank account of the payee, the payments were rightly allowed. Similarly, payments made after banking hours are also found to be app....

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....es-(1) The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other provision of this Act relating to the computation of income under the head 'Profits and gains of business or profession'. ****** (3) Where the assessee incurs any expenditure in respect of which payment is made after such date (not being later than the 31st day of March, 1969) as may be specified in this behalf by the Central Government by notification in the Official Gazette, in a sum exceeding two thousand five hundred rupees otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft, such expenditure shall not be allowed as a deduction: Provided that where an allowance has been made in the assess....