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TMI Blog2015 (4) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... also note that the payment made by the assessee does not fall any circumstances prescribed in Rule 6 DD of the IT Rules, 1962. We may note that the words used Rule 6DD are specified the cases on circumstances and no case or circumstance can be employed or interpreted which is not specifically provided in Rule 6DD. - Decided against the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be admitted for adjudication. However, the Ld. DR alternatively submitted that if it is found just and proper then the legal objection of the assessee may be considered. On careful consideration of above submissions, we are of the view that the assessee wish to raise additional grounds in addition to grounds submitted raised by the assessee in the memorandum of appeal filed on dated 19.04.2011 by way of application in hand.The assessee has sought to raise following additional grounds :- "Additional Ground : 1. That the Ld. AO completed the assessment without affording the assessee sufficient opportunity of being heard. 2. That the Ld. CIT(A) erred on facts in concluding that the case of the assessee was not covered under Rule 6DD of the Income Tax Rules." On careful consideration on above submissions of both the parties and perusal of the relevant material placed on record, inter alia, orders of the authorities below & order of the Tribunal during first round of litigation, impugned order the CIT(A) and the grounds raised by the assessee in the memorandum appeal filed on 19.04.2011 and additional grounds as reproduced on above. We are of the view that the additional groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties. At the very outset, we find it necessary relevant to reproduced provision of section 40A(3) of the Act and Rule 6DD of the (g), (j) & (k) Income Tax Rules, 1962 which read as under :- "Section 40A(3) :- Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees, no deduction shall be allowed in respect of such expenditure." "6DD. No disallowance under sub-section (3) of section 40A shall be made and no payment shall be deemed to be the profits and gains of business or profession under subsection (3A) of section 40A where a payment or aggregate of payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceeds twenty thousand rupees in the cases and circumstances specified hereunder, namely : (g) where the payment is made in a village or town, which on the date of such payment is not served by any bank, to any person who ordinarily resides, or is carrying on any business, profession or vocation, in any such village or town; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment was always made for more than one vehicle. The Ld. AR submitted that the assessee used to pay cash to the drivers of vehicles to make payments to supplier i.e. Keshav Motors, therefore, payment made to the agent is within the ambit of sub rule (k) of Rule 8DD of the IT Rules, 1962 and therefore, the assessee was also entitled for the exemption available under sub rule (g) & (j) of said Rule. 10. Replying to the above, the Ld. Departmental Representative (DR) placing reliance on the decision of ITAT, Pune Bench "A" in the case of DCIT Vs. Vijay Kumar Ramesh Chand & Co. (2007) 108 ITD 626 (Pune Trib.) Submitted that sub rule (j) of Rule 6 DD of the IT Rules, providing the exception to section 40A(3) of the Act, has a limited scope and prescribed exception only in respect of agent and does not covered an employee for such an exception and therefore, payment by the assessee company through its drivers of the vehicles to the supplier i.e. Keshav Motors does not fall under said exception. 11. The Ld. DR, further, placing reliance on the decision of Hon'ble Supreme Court in the case of Attar Singh Gurmukh Singh Vs. ITO (1991) 191 ITR 667 (SC) submitted that the cash payments made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same. But the legislature in their wisdom have not provided for any other circumstances. 4.1.1. In the case of Narayan Bijoy Kumar Vs. CIT(Pat) 163 ITR, 695, it was held that even where the assessee showed a certificate from the other party insisting for cash payment, the same was not sufficient to justify cash payment. Similarly, in the case of Jai Talkies Steel Traders Vs. CIT (P & H) 250 ITR 738, it was held that the assessee must produce confirmatory letter from other party as proof for insisting cash payment. The jurisdictional ITAT in the case of Jai Talkies Vs. Income Tax Officer (ITAT, Delhi) 57 TTJ 745 has held that making payment on bank holiday do not ipso facto permit assessee to make cash payments. In view of the facts and circumstances of the case, legal provisions and judicial pronouncements on the issue, I hold that the AO was fully justified in making the disallowance u/s 40A(3) of the Act, 1961. Therefore, the addition made by the AO is confirmed. The grounds of appeal are rejected." 13. Under facts and circumstances of rival submissions of both the sides, we note that the assessee has raised two contentions to the action of the authorities below first, the pay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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