1987 (1) TMI 73

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....to Rs. 27,379 for purchase of timber falls within the purview of the Circular of the CBDT No. 220 dated May 31, 1977 ? " The Income-tax Officer disallowed the expenditure of Rs. 27,379 on the ground that such payments were made in cash in contravention of section 40A(3) of the Income-tax Act, 1961. The Income-tax Officer negatived the plea of the assessee that the payments were made due to unavoidable circumstances and further the genuineness of payment and the identity of the payee are proved on appeal, the Commissioner of Income-tax (Appeals) and, on further appeal, the Income-tax Appellate Tribunal confirmed the order of the Income-tax Officer. Learned counsel for the assessee raised a two-fold contention, viz., the payments made f....

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...., 1977, the assessee stated that the cash payments were made as the assessee had no bank accounts at those places, viz., Bavarsha and Damanpet, and further the sum of Rs. 3,881 paid to M/s. Abul Kareem & Co. represented consolidated payment of the small amounts made on different dates. The Income-tax Officer, in the course of the order, stated that the payment and the identity of the parties who sold the goods were established, and the payments were made by hundis mostly, and the C.S.T. number and the S.T. numbers of the vendors were furnished. It is also further stated by the Income-tax Officer that the assessee might have paid because he has no bank account in those places but, however, he did not accept this version as the assessee on ot....