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TMI Blog1994 (3) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer in the course of the assessment proceedings noted certain payments having been made in cash above Rs. 2,500. On being asked to show cause as to why the aforesaid payments not be disallowed the assessee filed a written explanation stating therein that the payments had been made in cash in the evening after banking hours at the instance of the sellers. The further submission was that there was a scarcity of fertilizers and the assessee could not displease the distributors by refusing to pay in cash. In support of the aforesaid arguments attention was invited to Rule 6-DD(j). 4. The Income-tax Officer perused the relevant copies of accounts as also the dates of the bills and the payments thereof in cash. It was noted by him that the bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee had not been able to prove that its case was covered within the exceptional circumstances outlined by Rule 6-DD(j). 6. The learned counsel, at the outset, stated that the Income-tax Officer had not raised any query at the assessment stage vis-a-vis the aforesaid payments in cash. According to him, such payments in cash were warranted having been made during the season for purchase of fertilizers and after the close of the banking hours. The further submission on his part was that the payments had to be made urgently as stipulated by the Govt. authorities failing which the assessee would have had to undergo penal consequences. It was further stated that the Income-tax Officer proceeded to examine the books of the sellers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowed by a cash payment of Rs. 5,000 on10-7-1984. There are further cash payments of Rs. 10,000 on25-7-1984and Rs. 5,000 in28-7-1984with intervening bills of Rs. 5,150, Rs. 22,385 and Rs. 10, 500 on various dates. It is apparent that there is a time-gap in between the dates on which the purchases have been made and the dates on which the payments have been made in cash. A similar position emerges in the case of M/s. Kissan Khad Bhandar from which the assessee made a purchase on5-2-1985amounting to Rs. 11,220 and which was discharged in cash partly on13-2-1985, viz. Rs. 10,200 and again on26-2-1985Rs. 1,020. 10. The aforesaid facts do not support the stand taken on behalf of the assessee that the payments were made in cash in the evening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as urgently needed "in the proper conduct of the company's business". On the aforesaid facts their Lordships held that the case clearly fell within the exceptions provided in clause (j) of Rule 6-DD and the disallowance was not sustainable. Their Lordships further referred to the decision of the same Court in the case of Hari Chand Virender Paul relied upon by the counsel appearing for the Department and distinguishing the same on the ground that the facts discussed therein bore no resemblance to the facts of the assessee's case. The position before me, however, is different since the facts of the assessee's case are quite akin to those discussed in the case of Hari Chand Virender Paul. Their Lordships referred to the goods having been pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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