RAJESH BINDAL J. - (1.) THE Income -tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short, "the Tribunal"), has referred under s. 256 924/Chd/1984 for the asst. yr. 1980 -81 : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the order of the CIT(A) with regard to the holding that the provisions of s. 40A(3) were not applicable to the said addition of Rs. 35,800."
(2.) THE facts as noticed by the Tribunal in the statement of case are that the assessee has claimed expenditure of Rs. 35,800 on account of purchase made in cash, which were disallowed by the AO under s. 40A(3) of the IT Act, 1961 (for short "the Act"), as the AO was not satisfied with the reasons given by the assessee for non -compliance of the provisions of s. 40A(3) of the Act. In appeal the assessee succeeded in persuading the Commissioner of Income -tax (Appeals) [for short "the CIT(A)"], to accept its explanation furnished. The order of the CIT(A) was upheld by the Tribunal in further appeal by the Revenue.
(3.) WE have heard Mr. Yogesh Putney, learned counsel for the Revenue, and with his assistance have perused the paper book. Mr. Putney has vehemently argued that the findings recorded by the CIT(A) as confirmed by the Tribunal are perverse in so far the explanation furnished by the assessee for explaining the cash payment was not sufficient and acceptable. He further submitted that there being a clear violation of the provisions of s. 40A(3) of the Act, the assessee was not entitled to deduction of the amounts so spent by him.;