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TMI Blog2023 (10) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... ther modes, whereby, banking channels were used for the subject payments. We find that the Tribunal has returned with a finding of fact that these confirmations were produced for the first time before the CIT(A). The grounds of appeal preferred before us show that there is nothing stated that would indicate that the appellant/assessee has averred that the said observation was perverse. However, as indicated hereinabove, even if we were to assume that these confirmation letters were produced before the AO, it would still not help the cause of the assessee. Clearly, payments made by the assessee to the concerns violated Section 40A(3) as they were not made through an account payee cheque drawn on a bank, account payee bank draft or through th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared his total income as Rs. 2,23,140/-. 6. During the assessment proceedings, the Assessing Officer (AO) found that in respect of certain purchases aggregating to Rs. 2,77,13,513/-, payments had been made otherwise than by account payee cheque. 7. On enquiry, it was found that payments to suppliers had been made via bearer cheques. 8. The aforementioned payments were paid to three concerns i.e., (i) Dolphine Sales Corporation, (ii) Salasar Enterprises, and (iii) Balaji Tradings. The breakup of the amounts is as follows: Sl.No. Name of the parties and address Total purchase (in Rs.) Mode of payment in cash during the year 1. Dolphine Sales Corporation, 425/14, Street No. 6, Bhola Nath Nagar, Shahdara, Delhi 96,69,410/- 32,09,513/- 2. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of the payee. 2. It would be seen that where payment of a sum exceeding Rs. 2,500 is made, otherwise than by a crossed cheque/draft, the assessee besides furnishing evidence as to the genuineness of the payment and the identity of the payee, is required to satisfy the Income-tax Officer that his case falls under any one of the circumstances mentioned in (a) and (b) above, if he claims that no disallowance should be made under section 40A(3). 3. Various representations have been received by the Board regarding the difficulties that are being experienced by the taxpayers due to lack of uniformity in the interpretation of the provisions of rule 6DD(j ) by the Income-tax Officers. The Board have considered these representations and have dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 6DD(j). 6. It is further clarified that the above circumstances are not exhaustive but illustrative. There could be cases other than those falling within the above categories which would also meet the requirements of rule 6DD(j ). [Emphasis supplied by us] 11. Counsel for the appellant/assessee says that confirmations were received from the aforementioned parties, in compliance with the above 1977 circular. 12. The appellant/assessee contended before the AO that the 1977 circular applied to his case, given the circumstances at hand. 13. In support of his plea that the 1977 circular applied to the facts of the instant case, the assessee contends that there were exceptional circumstances that compelled the appellant/assessee to make payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oached us on JANUARY 2013 for the want of material and we insisted that we will not accept account payee cheques for the payment of our dues. Mr. Rajesh Kumar insisted for payment through banking channel only since he was receiving payments through bank. We then insisted for bearer cheque payment only. 14.1. These are undated confirmations that bear identical language. This brought the genuineness of the transactions into serious doubt. 15. According to us, even if we were to accept that the reason given in the confirmation letters was correct, that is, the appellant/assessee was a new entrant in the business, we believe, to allay concerns of the suppliers i.e., the above-mentioned concerns, payments could have been made through bank drafts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SEVENTH AMENDMENT) RULES, 2008 SUBSTITUTION OF RULE 6DD NOTIFICATION NO. 97/2008, DATED 10-10-2008 In exercise of the powers conferred by section 295 read with proviso to sub-section (3A) of section 40A of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely: 1. (1) These rules may be called the Income-tax (7th Amendment) Rules, 2008. (2) They shall come into force with effect from assessment year 2009-10. 2. In the Income-tax Rules, 1962, for rule 6DD, the following rule shall be substituted, namely:- [ Cases and circumstances in which a payment or aggregate of payments exceeding twenty thousand rupees may be made to a person in a day, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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