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TMI Blog2012 (9) TMI 1141X X X X Extracts X X X X X X X X Extracts X X X X ..... ajan, Junior Standing Counsel represented on behalf of the Revenue. 2. The only issue in the grounds of appeal of the assessee is that the Commissioner of Income Tax (Appeals) erred in sustaining the disallowance of ₹ 11.00 lakhs made under section 40A(3) of the Income Tax Act by the Assessing Officer. 3. The assessee is a firm engaged in the business of trading/marketing of rubber products filed return of income for the assessment year 2008-09 on 27.07.2009 declaring income of ₹ 13,460/-. The assessment was completed on 27.12.2010 under section 143(3) determining the income of the assessee at ₹ 11,13,460/-. While completing the assessment, the Assessing Officer made the addition by disallowing the cash payments made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yee cheques. The payments in cash were made on consideration of business exigency and exceptional circumstances, compelling necessity to the assessee, on insisting for cash payments by the supplier. The counsel submits that all the payments are genuine and the Assessing Officer is not disputing the genuineness of payment. The counsel further submits that few payments were made on bank holidays and therefore covered by exceptions under Rule 6DD. The counsel for the assessee relied on the decision in the case of CIT vs. Chrome Leathers Co. Pvt. Ltd. [235 ITR 708 (Mad)] and submitted that disallowance under section 40A(3) is not warranted when the identity and genuineness of the payments were established. The counsel therefore submits that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 40A(3) is warranted. Both the assessee and its associate concern, a registered SSI Unit are assessed to tax under the same jurisdiction of Business Range, Chennai - 34. The purchases accounted by the assessee in respect of the supplies received from M/s. Murugan Enterprises have been duly accounted as sales and offered to tax by them. The payments effected by the assessee both in cheque and cash stands duly confirmed with the assessee's account appearing in the books of account of M/s. Murugan Enterprises with their closing balance as on 31.03.2009 is duly tallied to each other. In the case of Giridharlal Goenka vs. CIT [179 ITR 122 (Cal.)], the Hon'ble High Court held that the object of the provision of section 40A(3) is to check ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yee where such payee is identifiable and the payment is genuine and is made on business expediency would be sufficient enough not to make any disallowance because the payment was made in cash. The Allahabad High Court in CIT v. Ram Agya Shyam Narain [1991] 189 ITR 470 held that such a finding of the Tribunal is a finding of fact. The Punjab and Haryana High Court in the case of, CIT v. Brij Mohan Singh and Co. [1994] 209 ITR 753, held that the finding arrived at by the Tribunal on the facts of the case that the provisions of section 40A(3) of the Act were fully satisfied is a finding of fact. We have noticed that the Tribunal has taken note of the relevant factors and found that the payments were duly accounted for in the accounts of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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