TaxTMI 
TaxTMI 
TaxTMI 
2023 (10) TMI 1285
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....he Income Tax Appellate Tribunal [in short, "Tribunal"]. 4. Via the order, the Tribunal sustained the order of the Commissioner of Income Tax [in short "CIT(A)"] and rejected the appeal of the assessee. 5. The record discloses that for the aforementioned assessment year, the appellant/assessee had filed a return of income (ROI), whereby, he declared his total income as Rs. 2,23,140/-. 6. During the assessment proceedings, the Assessing Officer (AO) found that in respect of certain purchases aggregating to Rs. 2,77,13,513/-, payments had been made otherwise than by account payee cheque. 7. On enquiry, it was found that payments to suppliers had been made via bearer cheques. 8. The aforementioned payments were paid to three concerns i.e.....
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....to exceptional or unavoidable circumstances; 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. 2. It would be seen that where payment of a sum exceeding Rs. 2,500 is made, otherwise than by a crossed cheque/draft, the assessee besides furnishing evidence as to the genuineness of the payment and the identity of the payee, is required to satisfy the Income-tax Officer that his case falls under any one of the circumstances menti....
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....ced in respect of each transaction falling within the categories listed above from the seller giving full particulars of his address, sales tax number/permanent account number, if any, for the purposes of proper identification to enable the Income-tax Officer to satisfy himself about the genuineness of the transaction. The Income-tax Officer will, however, record his satisfaction before allowing the benefit of rule 6DD(j). 6. It is further clarified that the above circumstances are not exhaustive but illustrative. There could be cases other than those falling within the above categories which would also meet the requirements of rule 6DD(j )." [Emphasis supplied by us] 11. Counsel for the appellant/assessee says that confirmations were ....
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....s Deals in :R.S. Joist, M.S. Angle, M.S. Channel & All Kinds of Iron & Steel Auth. Dealer: RATHI STEEL LTD. FLAT NO. 1, PLOT NO. A/4/2932, SHRl RAM COLONY, BHOLA NATH NAGAR SHAHDARA, DELHI -110032 Ref. No ............. Dated .............. TO WHOM IT MAY CONCERN We herby [sic...hereby] confirm that Mr. Rajesh Kumar (Prop. Luxmi Trading Co., Shop No. 2 Mam Road, Jagatpur Road, Village Wazirabad, Delhi-110084) was a new entrant in the business of hardware and Iron & Steel trading. He approached us on JANUARY 2013 for the want of material and we insisted that we will not accept account payee cheques for the payment of our dues. Mr. Rajesh Kumar insisted for payment through banking channel only since he was receiving payments thr....
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.... to fall within the ambit of the 1977 circular, the appellant/assessee was required to establish the genuineness of the transactions. The appellant/assessee having failed to do so, led to the deduction being rightly disallowed for the subject payments. 21. Significantly, with effect from A.Y. 2009-10, Rule 6DD was substituted via Notification No. 97/2008 dated 10.10.2008 issued by the CBDT. For convenience, the portions of this circular that pertain to the issue in question are extracted hereafter: "INCOME-TAX (SEVENTH AMENDMENT) RULES, 2008 - SUBSTITUTION OF RULE 6DD NOTIFICATION NO. 97/2008, DATED 10-10-2008 In exercise of the powers conferred by section 295 read with proviso to sub-section (3A) of section 40A of the Income-tax Act....