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TMI Blog2019 (5) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... r the reasons not known to them it was not allowed to do so nor the finding of the Appellate Authority, showing non application of mind to the exceptional circumstances of Rule 6DD and why the same do not apply to the transaction of the purchase of lands in question. Apparently there was no reason for the Assessing Authority for not affording an opportunity to the Assessee to produce not only the confirmation letter from the sellers but also to examine the sellers themselves, by which the Assessee could have established the exemptions of Rule 6DD. Miscarriage of justice might have resulted in cutting short of the assessment procedures by the Assessing Authority. Appellate Authority have just put their imprimatur without discussing any details. Such lack of diligent assessment exercise by the fact finding bodies opens all the doors for the flow of the work in the constitutional Courts, which is not desirable. It is settled legal position that the fact finding arrived at by the final fact finding body is binding on the High Court, while considering the Substantial Questions of Law u/s 260A. Appeal filed by the Assessee is allowed for statistical purposes, without answering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of Attar Singh Gurmukh Singh Vs.ITO 191 ITR 667 . As it is often said equity and tax does not always made good friends. In the circumstances, I am of the opinion that lower authorizes were justified in applying Section 40A(3) of the Act to the subject transanctions. I do not find any reason to interfere. 5.In the result, appeal of the assessee is dismissed. 3. The learned Counsel for the Assessee Mr.B.Ramana Kumar submitted before us that Section 40A(3) of the Act does not apply to the facts and circumstances of the present case as his the lands in question were purchased by him for personal purpose as Capital Assets and not in the ordinary course of business. Therefore,there was no expenditure claimed in the computation of income for the Assessment Year 2011-2012 and therefore the said Provisions of Section 40A(3) do not apply to such purchase of Capital Assets for personal purpose. In the alternative, the learned counsel for the Assessee submitted that the enquiry with regard to the applicability of Rule 6DD was not held by the learned Assessing authority before whom the Assessee even though produced the confirmation letters of tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40A. (1) The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other provision of this Act relating to the computation of income under the head Profits and gains of business or profession. ...... (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 payeee cheque drawn on a bank or account payeee bank draft, [or use of electronic clearing system though a bank account, exceeds ten thousand rupees] no deduction shall be allowed in respect of such expenditure. 7. The contention of the learned counsel for the Assessee that no separate deduction in respect of the purchase of two lands in question was claimed in the computation of total income, eventhough, these purchases were debited in the Profit Loss Account of the Assessee which was produced during the course of argument before us for perusal, is a misconceived contention and deserves to be rejected. It is only Net profit as per the Profit and Loss Account which is taken to the computation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income under the head Profits and gains of business or profession, the said provisions disallows cash payment if made beyond the prescribed limit of ₹ 20,000/-. The purpose of such provisions is to check circulation of unaccounted transaction in the form of cash. Such a fair objective of the Legislature cannot be bypassed in the normal course of circumstances. Therefore, the Legislature enacted specific circumstances in Rule 6DD of the Income Tax Rules, 1962. It is needless to say that the burden of proof lies upon the Assessee to prove before the Assessing Authority, the exceptional circumstances for making the cash payments for which deduction is claimed to establish that such payment squarely fall within four corners of circumstances enumerated in Section 6DD of the Rules. 10. From the perusal of the records including the Assessment order and Appellate order unfortunately we do not find any discussion by any of the authorities neither the detailed circumstances in which such cash payment was made by the Assessee who wanted to produce the confirmation letters from the dealers of the lands and for the reasons not known to them it was not allowed to do so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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