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TMI Blog2019 (8) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... t, based on actual purchases for which cash was paid by the Assessee. He could have asked them to produce their books of accounts, bill books, etc. On its part, the Assessee appears to have made the effort of producing the confirmation letters from the three parties before the CIT (A) and it was on that basis the CIT (A) rendered the factual finding that the Assessee was constrained to make the cash purchases due to exceptional or unavoidable circumstances , as envisaged in 6 DD (j) of the Rules. The Court is unable to find any legal infirmity in the impugned order of the CIT (A), which has been confirmed by the ITAT in the order under appeal.- Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... to explain the justification for making the above cash purchases, which was in contravention of Section 40-A (3) of the Act. The AO was not satisfied with the explanation and accordingly added the above amount to the income of the Assessee. 4. The Assessee then appealed to the Commissioner of the Income Tax (Appeals) [CIT(A)].By the order dated 31st March, 1999, while allowing the appeal of the Assessee, the CIT(A) noted that by letters dated 1st December, 1997, two of the parties i.e. M/s Hearing House and M/s. Durga Photo Sales by letters dated 12th June, and 1st December 1997 respectively confirmed that they had sold goods to the Assessee on cash payment only as per their invoices of sales. As far as M/s Usha Photographers was concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was deleted. 7. The Revenue then carried the matter in appeal to the ITAT, which by the impugned order agreed with the CIT (A) and dismissed the appeal of the Revenue. The reasoning of the ITAT on this issue is contained in para 6 of the impugned order, which reads as under: "6. We have duly considered the rival contentions and the material on record. One of the main objections of the learned DR was with regard to the additional evidence admitted by the CIT (Appeals). These evidence were in the form of letters were forwarded to the Assessing Officer for his comments in terms of Rule 46-A of the IT Rules. Next, it needs to be appreciated that this was the first year of assessee's business. Therefore, there was all the more reason for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchases, the AO could have summoned one or all of those three parties and asked them questions in relation to the confirmation letters, to satisfy himself that the contents thereof were, in fact, based on actual purchases for which cash was paid by the Assessee. He could have asked them to produce their books of accounts, bill books, etc. 10. On its part, the Assessee appears to have made the effort of producing the confirmation letters from the three parties before the CIT (A) and it was on that basis the CIT (A) rendered the factual finding that the Assessee was constrained to make the cash purchases due to 'exceptional or unavoidable circumstances', as envisaged in 6 DD (j) of the Rules. 11. The Court is unable to find any legal infir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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