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TMI Blog2014 (9) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... to verify the aggregate payment made by the assessee on each day and if the payment in a day does not exceed 20,000/-, then no disallowance under Section 40A(3) would be made. That if assessee makes the payment not exceeding 20,000/- every day, it cannot be said that the payment has been made to circumvent the provisions of Section 40A(3). Section 40A(3) would be applicable when the assessee makes payment exceeding 20,000/- in a day. If there is no payment exceeding 20,000/- in a day, there is no violation of Section 40A(3), so there is no question of any circumvention of the provisions. - Decided in favour of assessee for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer made the total disallowance of ₹ 95,96,883/-. It is the assessee's contention that the sum of ₹ 64,12,470/- (25,29,895 + 38,84,575) are the payments made on Sundays/bank holidays and, therefore, the same are squarely covered by Rule 6DDJ. In support of this contention, he also referred to the remand report by the Assessing Officer in which the Assessing Officer has confirmed that the payment has been made on Sundays/bank holidays. He submitted that the learned CIT(A) did not accept the assessee's contention on the ground that the payment is not recorded on Sundays/bank holidays in the books of M/s Sir Shadi Lal Distillery & Chemical Works, Mansurpur. It was explained by the learned counsel that payment is made by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er hand, relied upon the orders of authorities below and he stated that from the order of CIT(A), it is evident that in the books of account of M/s Sir Shadi Lal Distillery & Chemical Works, the receipt of payment from the assessee is not recorded on Sundays or bank holidays and therefore, Rule 6DDJ would not be applicable. Similarly, with regard to the payment below ₹ 20,000/-, he stated that the assessee has only adopted a device to make the payment not exceeding ₹ 20,000/- at a time so as to circumvent the provisions of Section 40A(3) which cannot be permitted. He, therefore, submitted that the order of learned CIT(A) should be sustained. 5. We have carefully considered the submissions of both the sides and perused relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding date 13.11.2008 (G. Nanak Jayanti) the amount is shown at ₹ 3,03,384/-." 7. From the above, it is evident that the Assessing Officer examined the books of account of Shri Prafful Bhatnagar and found that the payments to the extent of ₹ 64,02,470/- have been recorded in the books maintained by him on Sundays or bank holidays. It is not in dispute that Shri Prafful Bhatnagar was the depot-in charge of M/s Sir Shadi Lal Distillery & Chemical Works. In one more remand report dated 17.12.2012, the Assessing Officer examined the books of M/s Sir Shadi Lal Distillery & Chemical Works and reported that the transactions are not found recorded in the books of M/s Sir Shadi Lal Distillery & Chemical Works. On the basis of the thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se payments have also been found duly accounted for in the books of accounts of the assessee." 8. Again, in the remand report dated 29.11.2012, the Assessing Officer reported as under:- "(iv) Cash payments made not exceeding ₹ 20,000/- ₹ 28,10,102/- On examination, these payments have also been found duly accounted for in the books of accounts of Sh. Prafful Bhatnagar." 9. Thus, in these two remand reports, the Assessing Officer has not disputed the assessee's claim that the cash payment to the extent of ₹ 28,10,102/- was not exceeding ₹ 20,000/-. Section 40A(3) reads as under:- "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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