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TMI Blog1981 (11) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad, has referred the following question to us: " Whether, on the facts and in the circumstances of the case, section 40A(3) of the Act is applicable to the facts of the present case ? " The brief facts are these. M/s. H. A. Nek Mohd. & Sons, a registered firm, was engaged in the business of purchase and sale of Banarasi sarees. Durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, received from the customers and some in cash. When called upon to explain the circumstances in which these payments were made, the assessee explained that it was ignorant of the relevant provisions of the I.T. Act and Rules. It did not produce any evidence in this behalf and hence the ITO added the total amount of such payments amounting to Rs. 49,902, in round figures, under s. 40A(3) of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2,500. Of course, if the amount paid in cash is added to the amount mentioned in the post-dated cheques received by the assessee from the customers, the total amount exceeds the above figure, paid at one time. The question, however, is as to whether payment made by post-dated cheque is a payment made on the date on which the cheque is given or it would be a payment made on the date on which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank draft. If a payment in a sum exceeding Rs. 2,500 at a time is made in cash, such expenditure is liable to be disallowed. It would be clear from the details of the disputed payments that the amount paid in cash at one time did not exceed Rs. 2,500. Some of the payments were made by post-dated bearer cheques as well. If these cheques were not post-dated, then certainly these payments would have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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