TaxTMI 
TaxTMI 
1996 (6) TMI 86
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.... in holding that the disallowances by the Income-tax Officer in respect of cash payment of Rs. 61,200 made on various dates to Sharma Enterprises, Gauhati, was proper ? 2. Whether, on the facts and in the circumstances of the case and in view of the decision of the Gauhati High Court on identical issue in the case of Paul Brothers v. CIT [1990] 186 ITR 356, the finding of the Tribunal was not erroneous in law ? " The questions relate to the assessee's assessment year 1985-86. For the said assessment year, the assessee claimed deduction under rule 6DD(j) of the Income-tax Rules, 1962 (for short, " the Rules "). The case of the assessee, inter alia, is that it made payment in cash for repair of truck, etc., to Sharma Enterprises, A. ....
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....he identity of the party and genuineness of payments, but the assessee had failed to establish the exceptional and unavoidable circumstances under which payment had to be made in cash exceeding Rs. 2,500, that there was a wide gap between the date of raising the bill and the date of payment by the assessee and that it was not the case of the assessee that there had been urgency for which payment had to be made in cash nor was it the case of the assessee that both the parties did not have bank accounts. As regards the confirmatory letter from Sharma Enterprises, the Commissioner of Income-tax (Appeals) held that it could not be admitted within the meaning of rule 46A of the Rules. The assessee being aggrieved further took up the matter be....
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....ounsel appearing on behalf of the assessee submitted two new sets of questions quoted earlier and referred by the Tribunal. We heard Mr. J. P. Bhattacharjee, learned counsel appearing on behalf of the assessee, and Dr. A. K. Saraf, learned special counsel appearing on behalf of the Revenue. Dr. Saraf submitted that the finding regarding existence of exceptional and unavoidable circumstances by the Tribunal was a question of fact and this court in exercise of the power under section 256(1) might not answer such question of fact. Dr. Saraf further submitted that if the challenge was against the finding of the Tribunal on the basis that it was unjustified or perverse or not based on reasonably acceptable evidence, that could be the subje....
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....entity of party and genuineness of transaction but has failed to establish exceptional or unavoidable circumstances under which payment has to be made in cash exceeding Rs. 2,500. " Before coming to a decision regarding failure to establish exceptional and unavoidable circumstances, the authority must give reasons why it came to such conclusion. On a perusal of the order of the Commissioner of Income-tax (Appeals), we find that no specific reason has been given. Mr. Bhattacharjee also drew our attention to the order passed by the Tribunal. On a perusal of the order passed by the Tribunal, we do not find any ground why the Tribunal held that the assessee failed to prove exceptional and unavoidable circumstances. The Tribunal held thus : ....
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.... ; or (iv) The seller is refusing to accept the payment by way of crossed cheque/draft and the purchaser's business interest would suffer due to non-availability of goods otherwise than from this particular seller ; or (v) The seller, acting as a commission agent, is required to pay cash in turn to persons from whom he has purchased the goods ; or (vi) Specific discount is given by the seller for payment to be made by way of cash. " The circular itself indicates that these are not the only circumstances which can be said to be exceptional and unavoidable. There may be some other exceptional and unavoidable circumstances which may not be put in writing. In this case, the Income-tax Officer disallowed deduction on the ground th....