- (1.) HEARD Shri Pawan Shri Agrawal with Shri R.P. Agrawal in support of this appeal.
(2.) THE petitioner seeks to challenge the order of the Tribunal whereby the Tribunal has restored the order passed by the AO. The AO has added an amount of Rs. 5,34,323 in the income of the appellant assessee for the asst. yr. 1992 -93. The case of the assessee was that the assessee has made payment in cash to four contractors who were in turn making payments to their employees in cash.
(3.) SEC . 40A(3) requires all payments exceeding Rs. 10,000 to be made by cheques otherwise it is permissible to the AO to disallow such payments. Rule 6DD(j) of the IT Rules, 1962, makes exception in certain circumstances. Learned counsel for the appellant relied upon the judgment of the apex Court in Attar Singh Gurmukh Singh vs. ITO (1991) 97 CTR (SC) 251 : (1991) 191 ITR 667 (SC) and another of a Division Bench of this Court in CIT vs. Chaudhary & Co. (1995) 129 CTR (All) 101 : (1996) 217 ITR 431 (All). The first judgment lays down the proposition that the terms of s. 40A(3) are not absolute. In the case of Chaudhary & Co. (supra), there were certain solitary payments which were explained to the Division Bench of this Court. The Division Bench of this Court has taken this view that there was sufficient explanation and, therefore, the payment will not be hit by s. 40A(3).;