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TMI Blog2007 (3) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... owing questions of law have been referred for our opinion: - 1 .Whether on the facts and in the circumstances of the case, was the Income-tax Appellate Tribunal legally correct in upholding the disallowance as made by the Income-tax Officer amounting to ₹ 1,06,120 by invoking the provisions of section 40A(3) of the Income-tax Act? 2 .Whether or not the case of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is the applicable provision, prohibited, at the relevant time, payment by way of cash in a sum exceeding ₹ 2,500 otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft. 3. There was an exception to this provision and that has been given in rule 6DD of the Income-tax Rules, 1962. Rule 6DD(j) of the Rules, as it existed at the relevant time, and on which relia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the payee, having regard to the nature of the transaction and the necessity for expeditious settlement thereof; and also furnishes evidence to the satisfaction of the Assessing Officer as to the genuineness of the payment and the identity of the payee. 4. A bare reading of the above provision shows that not only is the genuineness of payment and the identity of the payee re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has not been able to show that there were some exceptional reasons for the assessee to make the payment in cash. 7. The ingredients of rule 6DD of the Rules read with section 40A(3) of the Act have not been satisfied by the assessee. 8. We may note that all the three statutory authorities have found that there was no special reason for the assessee to make the payment to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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