INCOME TAX OFFICER v. DHARIWAL MEDICAL STORES - 1986-LL-1120-3

Citation	1986-LL-1120-3
Appellant Name	INCOME TAX OFFICER
Respondent Name	DHARIWAL MEDICAL STORES
Court	ITAT
Relevant Act	Income-tax
Date of Order	20/11/1986
Assessment Year	1975- 76, 1976-77, 1977-78
Judgment	View Judgment
Keyword Tags	payment in cash • sister concern • crossed cheque
Bot Summary:	These appeals by the Revenue are directed against the order of the CIT deleting the additions made under s. 40A of the IT Act, 1961. The CIT(A) found that the payments were all made in a running account between the assessee and the sister concern, that the payments were genuine and the party to whom the amounts are paid have been identified, and that the party has given an affidavit to state that they required the payment in cash. In the appeals, the contention of the Revenue was that the Commissioner had overlooked the fact that even though an affidavit was given saying that the other concern required the payment of the amount in cash, it had not been able to justify the requirement of the payment in cash, and the reason given was false and accordingly the addition should be restored. All that we need say is that this appeal goes against the spirit of the circular for the instruction of the CBDT itself is that the requirements of r. 6DD(j) would be satisfied if a letter to the effect that the seller refused to accept the payment made by crossed cheque is produced. We are satisfied that the assessee falls within the parameters given by the Circular and order of the Commissioner deleting the addition was fully justified by the facts of the case. We are of the opinion that there is no justification to interfere with the order of the Commissioner The cross-objections merely support the orders of the Commissioner and do not claim any relief. In the result the appeals and cross objections are dismissed.

These appeals by Revenue are directed against order of CIT (A) deleting additions made under s. 40A (3) of IT Act, 1961. CIT(A) found that payments were all made in running account between assessee and sister concern, that payments were genuine and party to whom amounts are paid have been identified, and that party has given affidavit to state that they required payment in cash. He, therefore, applied instructions given by CBDT dt. 31st May, 1977 and deleted disallowance. In appeals, contention of Revenue was that Commissioner had overlooked fact that even though affidavit was given saying that other concern required payment of amount in cash, it had not been able to justify requirement of payment in cash, and, therefore, reason given was false and accordingly addition should be restored. All that we need say is that this appeal goes against spirit of circular for instruction of CBDT itself is that requirements of r. 6DD(j) would be satisfied if letter to effect that seller refused to accept payment made by crossed cheque is produced. Obviously Circular was intended to avoid any harassment that may be caused by rigid application of s. 40A(3) without keeping in mind proviso to that section. We are satisfied that assessee falls within parameters given by Circular and order of Commissioner deleting addition was fully justified by facts of case. We are of opinion that there is no justification to interfere with order of Commissioner (Appeal) cross-objections merely support orders of Commissioner and do not claim any relief. They are, therefore, incompetent. In result appeals and cross objections are dismissed. *** INCOME TAX OFFICER v. DHARIWAL MEDICAL STORES

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