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TMI Blog1984 (8) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... abad Bench, Allahabad : "Whether, on the facts and in the circumstances of the case, the agreement dated August 31, 1957, followed by letter dated September 28, 1957, from the payee, constituted a legal and valid contract between the assessee and the payee operative during the previous year and requiring the assessee to make payments in cash, as contemplated in rule 6DD(c) of the Income-tax Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of assessment year 1970-71. It has been found that the assessee, which is a company manufacturing tobacco, had made cash payments of Rs. 31,938 to one Sri Syed Mahmood Ali Rizvi, proprietor of Rizvi Company. These payments have been made on account of packing, filling and despatching charges for tobacco. Admittedly, these payments were made after April 1, 1969, when s. 40A(3) of the I.T. Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal held that these payments were bona fide and covered by rule 6DD(c) and (j) as well. It has been vehemently urged by the learned counsel for the CIT that s. 40A(3) being a remedial provision and enacted with a view to prevent evasion of tax should be construed strictly. Assuming it to be so, how does this help the Department is not understandable. The agreement was entered into between the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) of rule 6DD. In this view of the matter, it is not necessary to decide if deduction could have been allowed under clause (j) although there appears to be no hesitation in saying that even this finding of the Tribunal appears to be well founded. In the result, for the reasons stated above, we answer question No. in the affirmative, in favour of the assessee and against the Department. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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