- (1.) On an application under Section 256(2) of the Income-tax Act. 1961, the Tribunal has referred the following questions for our opinion : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the disallowance of Rs. 36,166 representing the value of absoletc stores written off ?
(2.) Whether, on the facts and in the circumstances of the case and having regard to Rule 6DD(j) of the Income-tax Rules, 1962, the Tribunal was right in confirming the disallowance of Rs. 65,500 under Section 40A(3) of the Income-tax Act, 1961 ?" 2. The assessee carries on business of manufacture and sale of tea as well as money-lending business. For the assessment year 1977-78, the assessment was completed under Section 143(3) read with Section 144B on September 5, 1980. The total income assessed at Rs. 8,17,260. During the course of the assessment, the Income-tax Officer noticed that assessee has claimed deduction of Rs. 50.166, on account of the written off value of obsolete items in the stores. The Assessing Officer has also noticed that the assessee has made the payment of Rs. 65,500 in contravention of the provisions of Section 40A(3) of the Income-tax Act, 1961. He disallowed both the amounts and added in the income of the assessee. The Commissioner of Income-tax (Appeals) as well as the Tribunal also found that no details are filed as to what exactly are the items that became obsolete which can be written off. Before us the assessee has submitted that he has filed the details of the items though that has not been made part of the paper book but as he has produced before us a paper wherein it is mentioned in 1977 tea chests--Rs. 36,166. How many tea chests were there when they were purchased and how many became obsolete. Nothing else has been said apart from the amount and the tea chests. In the absence of such details no interference can be called for.
(3.) The second question pertains to the issue whether the amount of Rs. 65,500 should be disallowed in view of the provisions of Section 40A(3) of the Act of 1961. This amount has been disallowed by the Assessing Officer, the Commissioner of Income-tax (Appeals) as well as by the Tribunal on a finding that he has not shown the compelling circumstances under which he has made the payment in cash. Therefore, the amount has been disallowed.;