1984 (8) TMI 74

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....owing questions of law have been referred by the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad : "Whether, on the facts and in the circumstances of the case, the agreement dated August 31, 1957, followed by letter dated September 28, 1957, from the payee, constituted a legal and valid contract between the assessee and the payee operative during the previous year and requiring the as....

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....disallowance of Rs. 31,938 under section 40A(3) was not justified ?" Dispute is in respect of assessment year 1970-71. It has been found that the assessee, which is a company manufacturing tobacco, had made cash payments of Rs. 31,938 to one Sri Syed Mahmood Ali Rizvi, proprietor of Rizvi Company. These payments have been made on account of packing, filling and despatching charges for tobacco. ....

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....led as annexure C. Construing these documents and considering the circumstances, the Tribunal held that these payments were bona fide and covered by rule 6DD(c) and (j) as well. It has been vehemently urged by the learned counsel for the CIT that s. 40A(3) being a remedial provision and enacted with a view to prevent evasion of tax should be construed strictly. Assuming it to be so, how does th....