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TMI Blog2011 (7) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... encies. The circumstances under which the provisions of section 40A(3) will not be applicable, where payment in cash is more than 20,000/- is provided in Rule 6DD and the ground of business expediency has been deleted by the Amendment made by the Finance Act, 1995 w.e.f. 01.04.1996. In the case before us, there is no dispute to the fact that assessee had made purchases against which the payments were made in cash exceeding 20,000 rupees at a time - authorities are justified to make disallowance @ 20% of cash purchases. Therefore, we uphold the order of CIT(A) - Decision against Assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer after considering the details of cash payments made by assessee, details of which are given by Assessing Officer at pages 2 to 5 of the assessment order aggregating ₹ 72,30,096/- and also the details of other purchases made by assessee in cash, details of which are given at pages 6-7 of assessment order aggregating ₹ 14,83,983/-, made the disallowance @ 20% of the total cash purchases as per section 40A(3) of the Act. Being aggrieved, assesese filed appeal before the first appellate authority. 5. It was contended that it was the regular practice of the assessee in respect of payments made by her as she was dependent on the employees, who were frequently absent. It was also contended that the payments were gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Limited -vs.- ACIT (2009) 121 ITD 50 and also the decision of ITAT, Chennai Bench in the case of ITO -vs.- Smt. N. Padma (2007) 106 TTJ 739. He further submitted that payments were made by assessee due to business exigencies. Ld. AR submitted that merely because the payments were made by cash, no disallowance could be made. He further submitted that considering the facts of the case, no disallowance under section 40A(3) should be made. 8. On the other hand, ld. DR supported the order of ld. CIT(Appeals). He further submitted that assessee has tried to justify the cash payments by expressing that payments were made due to business exigencies. He submitted that in the relevant assessment year, the said ground is no more as provided in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cash payment of ₹ 20,000/- or more at a time due to business exigencies. The circumstances under which the provisions of section 40A(3) will not be applicable, where payment in cash is more than ₹ 20,000/- is provided in Rule 6DD and the ground of business expediency has been deleted by the Amendment made by the Finance Act, 1995 w.e.f. 01.04.1996. 11. On perusal of the cases cited by ld. AR (supra), we observe that in the case of K. Abdu & Co. (supra), Hon'ble High Court considered the payments when made to Institutions referred to in Clause (a) of Rule 6DD, where payments made were eligible for exemption from disallowance under section 40A(3) of the Act. In the case of assessee, it is not the case that payments were made by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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