This appeal involves number of grounds. We proposed to discuss them one by one as under. (Para Nos. 2 to 4 are deleted being related to minor issues) second disputes relates to disallowance under s. 40A(3) of IT Act. ITO found that cash payment of Rs. 11583 had been made to M/s. Rameshchand Somchand Mansa and Rs. 14,645 to M/s. Rathio Gum Industries. In respect of former, assessee furnished letter from Agent of SBBJ, Sanchore that during year 1978-79, drafts of more than Rs. 5000 were not issued for branch at Mansa. Since Bank draft was only method by which this payment could be made, assessee had to pay same in cash. ITO, however, rejected this story and disallowed claim of expenditure incurred in this behalf. In respect of Rathi Gum Industries it was stated that purchases were made on 16th March, 1979 and 17th March, 1979 and cash was paid on later day through Sri Multanmal, in interest of business. ITO on scrutiny of books of account found that payment was actually made through Sri Amar Singh and not through Sri Multanmal. He, therefore, added bact amount under s. 40A(3). AAC has endorsed both these disallowances and they have been challenged before us. After carefully considering all facts and circumstances of case, we are not inclined to agree with conclusion of authorities below. In this behalf Mr. Ranka took us through entire history of s. 40A(3) which, according to him, had also been looked into by Hon'ble Rahasthan High Court in M/s. Kantilal Purshottam and Co. vs. CIT in DB IT Ref. No. 8 of 1975 decided on 29th Feb., 1985, since reported in (1986) 53 CTR (Raj) 190. Therein their Lordships have gone through relevant provisions of s. 40A(3), r. 6 DD(j) and quoted portion of speech by Dy. Prime Minister and Minister of Finance delivered on 29th Feb., 1968 while introducing Finance Bill culminated in proposed addition and reads as under: "Tax liability is some times artificially reduced by diverting profits to relatives and associate concerns in form of excessive payment for goods and services. Claims are also made for deduction of expenses in large amounts shown to have been paid in cash, often with view to frustrating investigation as to identity of recipients and genuineness of claim. To plug these loopholes, I propose to provide that payments made in business and professions to relatives or associate concerns will have to pass test of reasonableness in order to qualify for deduction. Further, I propose to provide that payments made in amounts exceeding Rs. 2,500 after date to be notified later will be allowed as deduction only if these are made by crossed cheque or by Bank draft." According to their Lordships very purpose of introducing this section w s check over dishonest assessees who wanted to claim false deductions on account of expenditure incurred in cash and this intention was further fortified by r. 6DD (j), addition of cl. (f) therein by which certain liberalisatons were made in respect of purchases of agricultural produce as per Notification published in Gazette of India Extra ordinary Part 2 s. 3(11) page 393 on 25th March, 1969. Again there is reference to Notification No. S.O, 3769 dt. 18th Nov., 1970 which further clarified provision and liberalised same. After going through all these Notifications and relevant authorities on subject, their Lordships were of opinion that CBDT was itself not very certain about position of law and interpretation thereof was not very clear because doubts were often raised in relation thereto and benefit of these doubts should go to assessee. In that particular case, genuineness of payment had been established and notwithstanding fact that there was technically breach of provisions of s. 40A(3), assessee was held entitled to benefit exemption under cl. (f) and (j) in respect of payments made for purchase of good from other traders in course of business. Relying upon this case and some other decisions on subject, for example, decision of Punjab and Haryana High Court in CIT vs. Sawran Singh Balbir Singh, (1981) 20 CTR (PAH) 131: (1982) 136 ITR 595, (P&H) this Bench had itself deleted disallowance made in more or less similar circumstances under s. 40H(3) in Chaman Lal Sanchore vs. ITO, ITA No. 306 and 307/Jp/84 Durga Oil Mills vs. ITO ITA Nos. 474 and 632/Jp/84. Keeping in view over all position of law as expounded by Rajasthan High Court above, and fact that certain circumstances have been brought out by assessee for justifying its failure to comply with provision of s. 40A(3), we are of opinion that benefit claimed by assessee should be given to it. In such border line cases, harsh provision of law which has imposed rather technical obligation, should not be applied so as to disallow otherwise genuine expenditure. We, therefore, accept ground and delete disallowance. ( Para No.s 7 to 9 are deleted being related to minor issues.) In result appeal is partly allowed for statistical purposes. *** BHANWAR LAL v. INCOME TAX OFFICER