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TMI Blog2015 (5) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... e. We are not impressed by the contention that the assessee should have made the payment before that date. When a particular agreement provides for a payment on or before a particular date, it is not necessary that just to meet the technical requirement of Income-tax provisions, payment should be made earlier. Payment has been made on March 28, 2010 which falls on a Sunday and is squarely covered by the exception provided under rule 6DD(j) which has been extracted by the Assessing Officer above. Further, the sale deed was also executed on March 30, 2010. Therefore, in our opinion, the cash payment would covered by the exception under rule 6DD(j) and accordingly we set aside the order of the learned Commissioner of Income-tax (Appeals) and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e worthy Commissioner of Income-tax (Appeals) by not considering our submissions made during the course of hearing properly and the disallowance was not justified since it is covered in clause (j) of rule 6DD. 3. That the worthy Commissioner of Income-tax (Appeals) has also erred in confirming the addition of ₹ 4,79,230 made by the Assessing Officer by disallowing proportionate interest on alleged interest-free advances under section 36(1)(iii) of the Income-tax Act. 4. That the disallowance of proportionate interest has been made by the worthy Commissioner of Income-tax (Appeals) against the facts and circumstances of the case and by not considering properly that the assessee had not borrowed any interest bearing funds from the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreed date i.e., March 28, 2010 as per agreement dated December 16, 2009 and ₹ 12,500 (Rs. Twelve thousand five hundred only) on dated March 29, 2010. As regards disallowance of amount under section 40A(3) on account of cash purchase of land is not applied to our case because as per clause no. (j) and clause no. (k) rule 6DD clearly state that no disallowance under sub-section (3A) of section 40A shall be made and no payment shall be deemed to be the profit and gains of the business or professions under sub-section (3A) of section 40A where the payment or aggregate of payments made to a person in a day, otherwise on account payee cheque drawn on a bank or account payee bank draft, exceed ₹ 20,000 in the cases and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... navoidable circumstances and payment by draft were not practicable on March 28, 2010 my assessee forced to make the payment in cash on determent date i.e., March 28, 2010, which was a Sunday (bank holiday). (affidavits from sellers are attached herewith). Since the payment made by my client comes under the exceptions given in clauses (j) and (k) of rule 6DD of the Income-tax Rules, 1962 hence there is no violation of section 40A(3)." The Assessing Officer noted that rule 6DD(j) reads as under : "6DD(j) : where the payment was required to be made on a day on which the banks were closed either on account of holiday or strike." 4. According to him, this rule provides for urgent circumstances for payment on a day when bank i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 7. On the other hand the learned Departmental representative strongly supported the order of the Commissioner of Income-tax (Appeals) and submitted that the assessee had plenty of time before March 28, 2010 to make payment. The exception provided under rule 6DD(j) applied to the exceptional circumstances and not in a case where the assessee had waited till Sunday. 8. We have considered the rival submissions carefully and find force in the submissions of learned counsel for the assessee. It is not doubted that in the agreement to sell it was agreed that sale deed would be executed, i.e., registered on or before March 28, 2010 and the assessee was required to make full payment before that date. Later on, it was found that March 28, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o interest paid on unsecured loans. During the financial year 2009-10 my client debited profit and loss account with ₹ 4,79,203 on account of interest paid to partners capital account." 10. The Assessing Officer referred to the provisions of section 36(1)(iii) and calculated the proportionate disallowance at ₹ 9,58,256. However, he noted that since claim for interest is only ₹ 4,79,230, the disallowance was restricted to this amount. 11. On appeal, disallowance was confirmed by the learned Commissioner of Income-tax (Appeals) in view of the decision of the hon'ble Punjab and Haryana High Court in the case of CIT v. Abhishek Industries Ltd. [2006] 286 ITR 1 (P&H). 12. Both parties were heard. 13. After consider ..... X X X X Extracts X X X X X X X X Extracts X X X X
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