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TMI Blog1991 (1) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. Under section 256(1) of the Income-tax Act, 1961, two questions are referred by the Tribunal, one at the instance of the assessee and the other at the instance of the Revenue. The question referred at the instance of the assessee reads : "Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the provisions of section 40A(3) we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they were disallowed by the Income-tax Officer relying upon sub-section (3) of section 40A of the Income-tax Act. We have perused the order of the Tribunal. The Tribunal has found as fact that the payment of Rs. 3,800 made by the assessee to Agra Steel Traders on March 31, 1975, has not been established to have been made under any exceptional or unavoidable circumstances or for other reasons ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration of the goods which were actually supplied to him on December 11, 1974. The Tribunal held that since the payment was made before delivery of the goods, it is in the nature of an advance and does not fall within the meaning of the expression "expenditure" occurring in subsection (3) of section 40A of the Act. In so far as it is relevant, sub-section (3) reads as follows : "(3) Where th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed bank draft. In the context of the language employed in the section, the Tribunal is not justified in saying that since the payment was made prior to delivery of the goods, it constitutes an advance and not an expenditure. Admittedly, the payment was made towards consideration of the goods which were supplied on the next day. We may also point out that the balance of consideration, namely, Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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