KANSHI RAM MADAN LAL Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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(1.) THIS appeal raises a question of some interest. It involves the familiar game of hide and seek with legislative intent. The facts are simple.
(2.) The assessee-company carries on business as a wholesale dealer in wines and spirits. Accounts are kept on mercantile basis. Accounting year ended on 31-3-1978.
The company purchased a scooter in the previous year for Rs. 4,500. It paid for the scooter in cash. There is no dispute that the scooter was in use as a business asset. Depreciation was claimed and presumably allowed also thereon.
(3.) THE ITO, however, thought that Section 40A(3) of the Income-tax Act, 1961 ('the Act') applied in the matter. This section, to the extent relevant, reads as under :
(3) Where the assessee incurs any expenditure in respect of which payment is made, after such date (not being later than the 31st day of March, 1969) as may be specified in this behalf by the Central Government by notification in the Official Gazette, in a sum exceeding two thousand five hundred rupees otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft, such expenditure shall not be allowed as a deduction.;
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