2007 (3) TMI 810

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on 256(1) of the Income-tax Act, 1961, the following questions of law have been referred for our opinion: - "1 .Whether on the facts and in the circumstances of the case, was the Income-tax Appellate Tribunal legally correct in upholding the disallowance as made by the Income-tax Officer amounting to Rs. 1,06,120 by invoking the provisions of section 40A(3) of the Income-tax Act? ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ction 40A(3) of the Act, which is the applicable provision, prohibited, at the relevant time, payment by way of cash in a sum exceeding Rs. 2,500 otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft. 3. There was an exception to this provision and that has been given in rule 6DD of the Income-tax Rules, 1962. Rule 6DD(j) of the Rules, as it existed at the relevant time,....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssed bank draft- (1) due to exceptional or unavoidable circumstances, or (2) because payment in the manner aforesaid was not practicable, or would have caused genuine difficulty to the payee, having regard to the nature of the transaction and the necessity for expeditious settlement thereof; and also furnishes evidence to the satisfaction of the Assessing Officer as to t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n stated before the departmental authorities that there was no insistence that cash payment should be made. 6. In view of these findings of fact, it is quite clear that the assessee has not been able to show that there were some exceptional reasons for the assessee to make the payment in cash. 7. The ingredients of rule 6DD of the Rules read with section 40A(3) of the Act have not been satis....