1995 (9) TMI 53

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....M. KATJU J. ---This is an income-tax reference under section 256(2) of the Income-tax Act, 1961. The following question has been referred to us at the instance of the applicant : " Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally justified in holding that the payments made to Santlal Jain, Daulat Ram Makhan Lal and to M. M. Istiaq Ahmad S....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....of section 40A(3) of the Income-tax Act, 1961, as the payments were not made by crossed cheque or draft. The assessee's appeal to the Assistant Commissioner was rejected by him but in the second appeal, the Tribunal has reversed the order of the Assistant Commissioner and held that the amounts were deductible. A perusal of the Tribunal's appellate order shows that Sant Lal Jain and M. M. Istiaq....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....) of the Rules. However, in the present case the totality of circumstances indicates that the view taken by the Tribunal is not incorrect. The considerations taken into account by the Tribunal were : 1. The statement of the assessee that his seller has been insisting on cash payment ; 2. The identity of the seller had been disclosed by the assessee ; 3. The assessee had furnished certific....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....in section 40A(3) was not practicable or would have caused genuine difficulty to the payee. " As has already been observed above, in the present case the totality of circumstances shows that the transactions were genuine for the reasons already mentioned above. In fact, the amount said to have been paid in cash by the assessee to certain parties has been verified by the certificates of those pa....