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TMI Blog1998 (7) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... f the paper-book. The customs duty paid relating to the closing stock was Rs. 2,51,024 which the assessee claimed in its income-tax return by making a profit and loss adjustment account. The assessee's authorised representative argued that the customs duty to the extent of Rs. 2,51,024 as included in the closing stock should be allowed to the assessee under s. 43B on the basis of actual payment. In this regard he relied on the Gujarat High Court decision in the case of Lakhanpal National Ltd. vs. ITO (1986) 54 CTR (Guj) 241 : (1987) 162 ITR 240 (Guj) and also the Special Bench decision of the Delhi Bench B of the Tribunal in the case of Indian Communication Network (P) Ltd. vs. IAC (1994) 48 TTJ (Del)(SB) 604 : (1994) 206 ITR (AT) 96. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the extent of Rs. 2,51,024 as allowing this deduction again will tantamount to a double deduction of the very same expenditure which has already been allowed to the assessee under the head 'Purchase'. 4. The next issue relates to the disallowance of Rs. 60,734 under s. 40A(3) confirmed by the CIT(A). The AO has disallowed a sum of Rs. 63,751 under s. 40A(3). The CIT(A) has allowed a sum of Rs. 3,027, but confirmed the disallowance of the balance amount of Rs. 60,734. The assessee has submitted before the AO that confirmation was available in respect of five parties to whom the payments were made in excess of Rs. 2,500, the details of such items are given at p. 5 of the assessment order. As per the assessment order the total amount of con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (1987) 66 CTR (Raj) 109 : (1987) 167 ITR 139 (Raj) and on the decision of the Hon'ble Supreme Court in the case of Attar Singh Gurmukh Singh vs. ITO (1991) 97 CTR (SC) 251 : (1991) 191 ITR 667 (SC), and also on the Calcutta High Court decision in the case of CIT vs. Bansidar Jalam & Co. (1989) 78 CTR (Cal 49 : (1989) 46 Taxman 129 (Cal). 5. We have considered the rival submissions and perused the material on record. We find that the case of the Calcutta High Court in CIT vs. Bansidar Jalan is not applicable to the facts of the present case because in this case the genuineness of the party was not proved. The party to whom the payment was made did not appear before the AO for the purpose of verification but in the instant case before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ossed cheque drawn on a bank or a crossed bank draft, then it will be easier to ascertain, when deduction is claimed, whether the payment was genuine and whether it was out of the income from disclosed sources. In interpreting a taxing statute, the Court cannot be oblivious of the proliferation of black money which is under circulation in our country. Any restraint intended to curb the chances and opportunities to use or create black money should not be regarded as curtailing the freedom of trade or business." From the said decision of the Hon'ble Supreme Court we find a genuine transaction has been kept out of the purview of s. 40A(3) of the Act. In the case of the assessee the transaction was genuine. The parties were identifiable. This f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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