TaxTMI 
TaxTMI 
2014 (9) TMI 1082
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng expenses with out rejection of a/c books. 3. That ld.CIT(A) was wrong in disallowing payments of expenses u/s 40A(3) at Rs. 25,29,895.00 in respect of purchase made on Sundays/Holidays/Bank Closed days. 4. That ld.CIT(A) was wrong in disallowing payments of Rs. 38,84,575.00 on Sundays/Holidays/Bank Closed days against purchases made previously on credit bases. 5. That ld.CIT(A), was wrong in disallowing Rs. 28,10,102.00 being cash payments not exceeding Rs. 20,000.00. 6. That ld.CIT(A) was wrong in not considering the written submissions dt. 19.12.2012. 7. That ld.CIT(A) did not consider the written submissions and rejoinders and evidencing papers properly and confirmed the additions of Rs. 91,45,944.00 wrongly." 3. At the tim....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Rule 6DDJ was that the assessee has not proved business exigency for making the payment on Sundays/bank holidays. He stated that as per Rule 6DDJ, there is no such requirement. That the assessee had further claimed that the sum of Rs. 28,10,102/- was cash payment not exceeding Rs. 20,000/- and the Assessing Officer has wrongly considered the same to be in violation of Section 40A(3). In the remand report, the Assessing Officer accepted these facts also. The learned CIT(A) sustained the disallowance in respect of payments below Rs. 20,000/- on the ground that the device has been adopted by the assessee so as to circumvent the provisions of law. He stated that Section 40A(3) is applicable only when the payment made by the assessee exceeded ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o adverse comment is made regarding the same." 6. Thus, the Assessing Officer, after examining the necessary details including the assessee's books of account, arrived at the conclusion that the payments have been made in cash on Sundays or other bank holidays and, therefore, such transactions are covered by Rule 6DDJ of the Income-tax Rules. Again, in the remand report dated 29.11.2012, the Assessing Officer stated as under:- "(ii) Cash payments made on bank closed days Rs. 64,02,470/- On examination, it has been found that the payments have been made in cash on days when there were Sundays or other bank holidays. All the payments have duly been accounted for in the books of accounts of Sh. Prafful Bhatnagar. However it is noticed t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ave been made on bank holidays. When the depot informs the head office and when and how the head office records the payments, it is the matter between the depot and the head office. Therefore, in our opinion, when in two remand reports i.e., the remand report dated 26.10.2012 and the remand report dated 29.11.2012, the Assessing Officer, after examining the books of the assessee as well as the books of the depot which is maintained by Shri Prafful Bhatnagar, has arrived at the conclusion that the payments have been made on bank holidays, it cannot be denied the benefit of Rule 6DDJ merely because the payment is not recorded in the head office on the said dates. We, therefore, allow ground Nos.2 & 3 of the assessee's appeal. Insofar as groun....