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TMI Blog2014 (12) TMI 934X X X X Extracts X X X X X X X X Extracts X X X X ..... to be fraudulent - in terms of the amendment made to Section 40A(3) of the Act, aggregation of the total payments during the day has to be made - the amendment is applicable w.e.f. 1st April, 2009 - assessee had pointed out that he had expanded the ambit and area of business to include sale of mobile phones, mobile phone accessories and recharge coupons - He had made purchases of ₹ 1,38,43,525/- for which payments were made to two parties in cash - there are several mitigating factors to show and establish commercial expediency and reasons for making the purchases – thus, the order of the Tribunal is upheld – Decided against revenue. - ITA 801/2014 - - - Dated:- 22-12-2014 - Sanjiv Khanna And V. Kameswar Rao,JJ. For the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner:- The word sum has no statutory definition and must have the common parlance meaning. Relying upon its meaning as given in the dictionary, learned standing counsel has contended that the word conveys a sense of totality and, therefore, even if an assessee has paid a sum exceeding ₹ 2,500 in different installments, the total having exceeded the prescribed amount, the section operated. The argument does not at all impress us. The word sum has been used there to convey the meaning of amount and not the sum total figure. The Reader's Digest Great Encyclopaedic Dictionary gives one of the meanings of sum as a quantity or amount of or of money . The Oxford English Dictionary gives one of the meanings of the word to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s considerable for in the stand accepted by the Tribunal that if payments are made at different times during the day and the assessee has no idea that he has to pay to the same person on more than one occasion, he cannot be subjected to the statutory restriction contained in the provision in question unless any one payment is above ₹ 2,500. Section 40A appears in Chap. IV of the Act dealing with computation of total income and is classified under the sub-heading in group D Profits and gains of business or profession . Parliament must have intended a working rule and unless by clear meaning of the words a different intention appears, we must give the provision a construction which would make the provision workable. 3. The decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the reasons given for fall in the Gross Profit rate which, it was stated, was on account of three-fold increase in turnover. The respondent-assessee had pointed out that he had expanded the ambit and area of business to include sale of mobile phones, mobile phone accessories and recharge coupons. He had made purchases of ₹ 1,38,43,525/- for which payments were made to two parties in cash. The purchases were not made on one day, but throughout the year. Earlier, he was only running an STD booth/public phone booth and related services. Being new in the business and having a small capital base of less than ₹ 10,00,000/-, the distributors were not ready to give him goods on credit for even one or two days. He was hence, forced to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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