- (1.) The instant reference is at the instance of the Revenue under Section 256(1) of the Income-tax Act, 1961, whereby the following question of law arising out of the order dated September 6, 1993, of the Tribunal in I. T. A. No. 783/Cal of 1990 has been referred for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition of Rs. 2,42,342 made under Section 40A(3) of the Income-tax Act, 1961 ?"
(2.) The brief facts of the case are that the Assessing Officer (AO) found that the aforesaid sum of Rs. 2,42,342, break up of which according to the assessee, is as under : JUDGEMENT_344_CTR192_2004Html1.htm was paid in cash and, therefore, the Assessing Officer held that the said payments were hit by the provisions of Section 40A(3) of the Income-tax Act, 1961. It was pointed out in his order that the assessee only produced the names of persons and vouchers in certain cases and did not give full particulars and addresses of the persons or any particulars such as sales tax number, permanent account number, etc., were produced by the assessee. Relying upon the Central Board of Direct Taxes No. 220 dated May 13, 1977 (see [1977] 108 ITR (St.) 8), the Assessing Officer held that the provisions of Rule 6DD(j) could not be applied. The Assessing Officer, therefore, disallowed the aforesaid sum and added the same to the income of the assessee. The assessee being aggrieved by the said order filed an appeal before the Commissioner of Income-tax (Appeals) who confirmed the action of the Assessing Officer. Aggrieved thereby an appeal was preferred and the Tribunal allowed the appeal of the assessee.
(3.) Mr. R.K. Chowdhury, learned counsel for the Revenue, contended that admittedly various payments have been made by the assessee during the assessment year in question (1985-86) in cash in excess of Rs. 2,500. In the light of the evidence produced by the assessee the same do not qualify for allowance under Rule 6DD or the Board circular and, therefore, the requirements of the rule and circular having not been met, the Tribunal ought not to have interfered with the orders of the Assessing Officer as confirmed by the Commissioner of Income-tax (Appeals).;