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TMI Blog2016 (2) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not have any bank account. These facts have not been conroverted by AO nor the learned CIT (Appeals) and the party was identifiable. He was of the view that the assessee is required to prove that due to exceptional and unavoidable circumstances as provided under the Rules, the payments were made in cash. Therefore, it is not a case of the Department that the payments so made in cash were not genuine. The reasons given by the assessee at every stage have not been disbelieved. The payments cannot be disallowed under section 40A(3) of the Act. The addition is deleted. - Decided in favour of assessee. - ITA No.919/Chd/2014 - - - Dated:- 15-2-2016 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 754 (P H). 4. The submissions were sent to the Assessing Officer for comments, who by letter No.449 dated 12.8.2004 basically relied on assessment order and submitted that the plea of the assessee that there are no banking facility in Sandhu Path where the assessee resides is not correct. After considering the submissions of the assessee and Remand Report by the Assessing Officer, the learned CIT (Appeals) held that there were certain exceptions provided under Rule 6DD of the Income Tax Rules for section 40A(3) of the Act where 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no addition under section 40A(3) of the Act can be made. 7. The learned D.R. relied on the orders of the lower authorities. 8. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material available on record. The only issue to be decided by us is whether on the given facts and circumstances of the case, the provisions of section 40A(3) of the Act can be applicable to the assessee or not. Section 40A(3) of the Act reads as under: Section 40A(3) : [(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 ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was established. The sale deeds were produced, the genuineness thereof was accepted. The amount paid in respect of each of these agreements was certified by the Stamp Registration Authority. In this way, the learned CIT (Appeals) held that the bar against the grant of deductions under section 40A(3) of the Act was not attracted. The Tribunal did not upset these findings given by the learned CIT (Appeals) including as to the genuineness and the correctness of the transactions. In fact, the Tribunal noted the contention on behalf of the assessee that there was a boom in the real estate market, that it was necessary, therefore, to conclude the transactions at the earliest and not to postpone them, that the assessee did not know the vendor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cash payments have not been disbelieved. This clearly makes out a case of business expediency. In this view, the Hon'ble High Court held the payments to be outside the purview of section 40A(3) of the Act. 10. Taking the guidance from the above said judgment of the Hon'ble Jurisdictional High Court, which is also a very recent judgment of the Hon'ble High Court we now advert to analyze the case of the present assessee. The proposition laid down by the Hon'ble High Court is quite unambiguous to the effect that even if the case of the assessee does not fall in any of the clauses of Rule 6DD of the Income Tax Rules, invoking the provisions of section 40A(3) of the Act can be dispensed with if the assessee is able to prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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