TaxTMI 
TaxTMI 
2023 (5) TMI 782
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....ome Tax Act, 1961 (hereinafter referred as 'the Act') by the ITO, Ward- 35(1), New Delhi (hereinafter referred as the Ld. AO). 2. The facts in brief are that return of income declaring the total income of Rs. 2,23,140/- was filed by the assessee which was taken up for scrutiny through CASS. The assessee during the year under consideration derived income from Trading in Iron and Steels and other items and deriving profit under the head Profit and gain from business and profession. The assessee was asked to submit the party wise sale and purchase details and their ledger accounts. It was found by Ld. AO that during the financial year in respect of purchases, aggregate payments of Rs. 2,77,13,513/- was made otherwise than by an account paye....
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....mstances; or b. 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 Income-tax Officer as to the genuineness of the payment and the identity of the payee. 6.3.5 It is claimed that circumstances of the Assessee were exceptional as the parties were not accepting payments through account payee cheques. There are conditions when payment through RTGS are not practical. Before me, the Assessee has submitted certificates from M/s Dolphine Sales Corporation (Prop. Satish Sharma), Varun Verma (Prop. M/s Balaji Tradi....
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....not understandable. In certain circumstances the receipt of payments through bearer cheque may be more uncertain than an account payee cheque or account payee draft. The provisions of law in the case of bouncing the cheque are the same. The Appellant has not submitted before me the evidences that the parties declared the payments in their books of account and paid the taxes thereon. I also find force in the observation of the Assessing Officer that payments amounting to Rs.24,25,000/- were made by the Assessee to M/s Dolphine Sales Corporation to RTGS and NEFT. On the above facts, it can be stated here that the reasons submitted by the Assessee through the certificates from the parties to the effect that they were not ready to accept the pa....
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....facts and in the circumstances of the case and in law the Hon'ble Commissioner of Income-tax (Appeals)' erred in rejecting that issuing payment through RTGS or NEFT is not possible under peculiar circumstances and various case laws mentioned by the assessee. 4. On the facts and in the circumstances of the case and in law the Hon'ble Commissioner of Income-tax (Appeals)' erred in not accepting that the market will accept his credibility over a period of time not in the first year of the business. 5. On the facts and in the circumstances of the case and in law the Hon'ble Commissioner of Income-tax (Appeals)' erred in not accepting that the assessee had filed letter dated 26.02.2016. 6. The appellant prays that the ....
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....h payments could be allowed as exception to Section 40A(3) of the Act. 6.1 However, still on a reading of the first proviso to section 40A(3) with Rule 6DD(j), as considered above, it is very much clear that no disallowance under section 40A(3) can be made, if the transaction for which the payment is made is genuine and due to business expediency and other compelling factors payment was required in cash. There are judicial pronouncements, as also relied by Ld. AR, that even after amendment of Rule 6DD(j), the legal exposition propounded by the Hon'ble Supreme Court in case of Attar Singh Gurmukh Singh Vs. ITO, 191 ITR 667 (SC), regarding consideration of expediency and other relevant factors cannot be considered to be diluted as the rule....
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....ities below the evidence from bank showing that the bearer cheques were encashed by the said parties only. Same could have only corroborated the confirmations given by parties that in order to secure their payments they insisted for payments through bearer cheques. 8. Ld. CIT(A) has rightly observed that a bearer cheque can bounce as well, for insufficient balances therefore giving bearer cheque to parties as the surety of being encashed is not sustainable explanation of business expediency. The bench finds no error in the findings of the Ld. CIT(A) because if the intention was to secure the payments to the parties by bearer cheques to be as good as cash then there are other banking instruments like Banker's cheque or RTGS/NEFT facilitie....