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TMI Blog2016 (5) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... It is also a finding of fact recorded by the Commissioner of Income-tax (Appeals) that copies of the ledger accounts were produced before the Assessing Officer who has not found any discrepancy in such books of account and no unaccounted transaction has been reported/noticed by the Assessing Officer. - Decided in favour of assessee. - D. B. Income Tax Appeal No. 2 of 2015 - - - Dated:- 4-1-2016 - Ajay Rastogi And J. K. Ranka, JJ. For the Petitioner : R. B. Mathur JUDGMENT J. K. Ranka, J. 1. Instant Income-tax Appeal under section 260A of the Income-tax Act, 1961 (for short, Act ), is directed against the order dated September 5, 2014, passed by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (for short, T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere also furnished. It was further contended that the agents purchase diesel from the local petrol pumps and supply it to the sites of M/s. Idea Cellular Company in that area and the assessee deposits the amount in the bank account of the agents, who are located at various locations including interior and remote places in Rajasthan and contended that as per rule 6DD(k), it is covered by the said definition and provisions of section 40A(3)(a) are inapplicable. However the Assessing Officer was dissatisfied and made disallowance of the entire amount of ₹ 2,41,14,570. 4. On an appeal, the Commissioner of Income-tax (Appeals) for short, CIT(A) ) allowed the claim of the assessee and deleted the entire disallowance under section 40A(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... generating sets for Idea Cellular Company. The petrol pump asked for payment in cash as neither the assessee nor the agents were known to them and it was neither practicable nor feasible for the assessee to open office or branch at every location. It is also an admitted fact that the assessee has placed on record the agreements with the various agents and it is a finding of fact recorded by the Commissioner of Income-tax (Appeals) as well as the Tribunal that these payments are not made in cash to the agents but the amount has been deposited in their bank account at a branch at Jaipur and in these times of e-banking payment can be drawn by the agents out of their bank account. Thereafter withdrawing from their bank account the payment has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in a sum exceeding twenty thousand rupees is made otherwise than by an account payee cheque drawn on a bank or account payee bank draft in the cases and circumstances specified hereunder, namely :-. . . (k) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person. 8. On perusal of the above, in our view also, the case of the assessee can be said to cover in the exception of rule 6DD(k), quoted (supra) as the payment is made by any person (assessee) to his agent who is required to make payment in cash for goods or services on behalf of such person (in the instant case, the assessee). The assessee has made the payment to the bank account of the agen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have relied upon the judgment rendered in the case of Attar Singh Gurmukh Singh v. ITO [1991] 191 ITR 667 (SC), where the hon'ble apex court has observed as under (page 673) : The terms of section 40A(3) are not absolute. Consideration of business expediency and other relevant factors are not excluded. Genuine and bona fide transactions are not taken out of the sweep of the section. It is open to the assessee to furnish to the satisfaction of the Assessing Officer the circumstances under which the payment in the manner prescribed in section 40A(3) was not practicable or would have caused genuine difficulty to the payee. It is also open to the assessee to identify the person who has received the cash payment. Rule 6DD provides that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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