9911796707
TMI Blog1979 (11) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... . The amount was included on the balance of advance to three parties Jayanand Nagjee, Shantilal Kamdar and Shrekant. It is argued before us by the assessee's Ld. Representative that the AAC had wrongly upheld the inclusion relying on the decision of the Allahabad High Court in 97 ITR 69 and of the Bombay High Court in CIT vs. Corn Finance(1) as the facts in those cases are distinguishable from the facts in the assessee's case. It is stated that there is no agreement between the assessee and the parties concerned from whom the advances have been made of recharging any interest and therefore it is submitted that the Departmental authorities were not justified in holding that any interest accrued to the assessee. The learned Departmental Repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y us above and following our order for the year, we delete the addition made on the ground of accrued interest. 5. The amount of Rs. 34,900 disallowed and added back under s. 40A(3) of the IT Act is in respect of payments made by the assessee in cash in respect of expenditure on payment of wages or labour work and purchase of cement. According to the details furnished by the assessee in this connection Rs. 28,400 were paid to various mukadams or labour contractors who were incharge of the construction work and cash payment had to be made to them because they did not have any bank account and it is not the practice to make payment by way of cheque to them. A sum of Rs. 6,500 for purchase of cement was made in cash to M/s Kotak and Co., Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative of the assessee that the payments are supported by vouchers and receipts given by the payees and therefore, the identity of the persons concerned is established and that the ITO has not disputed the genuineness of the payment. The learned Departmental Representative supported the disallowance pointing out that it cannot be said that in respect of various payments to Mukadams either the genuineness of the payment or the identity of the payee is established and in regard to payment for cement to one Kotak and Company, no circumstances has been pointed out as to why the payment could not be made in the manner prescribed. 6. Having considered the facts and the submissions, we hold that so far as the payments aggregating to Rs. 28,400 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner prescribed was not practicable and it was necessary for expeditious settlement, etc. having regard to the nature of the transaction. Having regard to the nature of the assessee's business and the commodity involved in the transaction, the reason adduced by the assessee has great degree of probability and truth. We therefore, delete the disallowance so far as this payment is concerned. 7. Coming to the appeal for the year 1975-76, the only ground of objection is to the disallowance and addition of Rs. 13,211 under s. 40A(3) of the IT Act. From the details furnished by the assessee, the payments in respect of two amounts Rs. 6,531.00 and Rs. 2,680 have been made for the purchase of cement and another sum of Rs. 4,000 to a labour co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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