THE DY. CIT-1(2), RAIPUR (CG) V. RCP INFRATECH PVT. LTD., RAIPUR (CG)

ITA 114/BIL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9099 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 14-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Competent authority
• Section: 40A(3); 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND GEORGE GEORGE K, JUDICIAL MEMBER ITA NO. 114 /RPR /201 4 ASSESSMENT YEAR : 2010 - 2011 DCIT, 1(2), RAIPUR VS. RCP INFRATECH PVT LTD, VIP STREET, KHAMARDIH, SHANKAR NAGAR, RAIPUR AACCR 5112 K (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI PRAV EE N JAIN, AR REVENUE BY : SHRI AJIT KUMAR LASKAR, DR DATE OF HEARING : 4 /05 / 2017 DATE OF PRONOUNCEMENT : 11 /05 / 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE REVENUE AGA INST THE ORDER OF CIT(A) - RAIPUR , DATED 30.4.2014 , FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS.3,41,84,000/ U/S.40A(3) OF THE ACT (RS.2,66,84,000/ - MENTIONED IN GROUND OF APPEAL) MADE BY THE ASSESSING 2 OFFICER ON THE GROUND THAT PART PAYMENTS WERE MADE BY CHEQUE AND PART PAYMENT IN CASH. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER APPEAL, THE ASSESSING OFFICE R OBSERVED THAT THE ASSESSEE HAD PURCHASED LAND FROM THE PARTIES AND MADE PAYMENT EXCEEDING RS.20,000/ - IN CASH IN VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT AS UNDER: SR.NO. NAME AMOUN T(RS.) 1. SMT. SUDHA AGRAWAL 63,63,000 2. SHRI SEUKRAM 35,00,000 3. SHRI SEUKRAM 3,34,000 4. SHRI SEUKRAM 11,,67,000 5. SMT. SUDHA AGRAWAL 83,55,000 6. AUTOMOBILE GRAH NIRMAN 4,00,000 7. SHRI ANIL S/O PARAMANAND 85,00,000 8. SHRI NEMICHAND S/O. PARAMANAND 40,00,000 9. SMT NIRUPAMA PANDEY 15,65,000 TOTAL: 3,41,84,000 4. THE ASSESSING OFFICER FURTHER OBSERVED THAT THE LAND WAS STOCK - IN - TRADE AND, THEREFORE, THE EXPENDITURE WAS REVENUE IN NATURE AND PROVISIONS OF SECTION 40A( 3) ARE APPLICABLE. NO PLAUSIBLE EXPLANATION WAS GIVEN. T HEREFORE, HE DISALLOWED RS.3,41,84,000/ - U/S. 40A(3) OF THE ACT. 5. ON APPEAL BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THE SELLER HAD INSISTED FOR CASH PAYMENT, THE IDENTITY WAS ESTABLISHED BY FURNISHING PHOTO, ADDRESS ES AND WITNESSES. THE DEAL WAS MADE IN THE PRESENCE OF 3 COMPETENT AUTHORITY, WHICH HAS CROSS CHECKED THE PAYMENT. THE ENTIRE DEAL WAS MADE AS P ER THE REGULATION OF TRANSFER OF PROPERT Y ACT, WHICH HAS BEEN CHECKED B Y THE GOVERNMEN T OFFICIALS. IT WAS ALSO BUSINESS PRACTICE IN THIS LINE OF BUSINESS. IT WAS FURTHER ARGUED THAT THE OBJECT OF SECTION 40A(3) IS TO CHECK TAX EVASION AND NOT TO DEPRIVE THE ASSESSEE OF THE DEDUCTION WHICH HE WAS OTHERWISE ENTITLED TO CLAIM . THE PAYMENTS WERE MADE FOR BUSINESS EXPEDIENCY AND ARE COVERED UNDER THE EXCEPTIONS GIVEN IN RULE 6DD(J)(2). THE CASH PURC HASES WERE MADE IN EXCEPTIONAL AND UNAVOIDABLE CIRCUMSTANCES OF BUSINESS EXIGENCIES, CONVENIENCE OF SECURITY OF THE SUBJECT PROPERTY. THE ASSES SEE RELIED ON THE FOLLOWING DECISIONS: I) CIT VS. BRIJ MOHAN SINGH & CO. (1994) 117 CTR (P&H) 391 II) GIRIDHARILAL GOENKA VS CIT, 179 ITR 122 III) JANAMBHUMI VS CIT, 225 ITR 517 (GAU) IV) HASANAND PINJOMAL VS CITG, 112 ITR 134 (GUJ) V) D.B.LATE VS ITO, 16 TTJ (PUNE) 136 VI) JANATA RICE MILL VS ITO, (2007) LUKNOW 357 VII) RAJ NARAIN BHAJAN LAL VS ITO, 4 TTJ (DEL) 1145 VIII) ITO S. JANKI DASS CHATUR BHU, 04 TTJ (DEL) 1145 IX) ASHOK KUMAR & BROS VS ITO, 31 TTJ (DEL) 353 6. FURTHER, THE ASSESSEE RELIED ON THE DECISION IN THE CASE OF R.P. REAL ESTATE PVT LTD., RAIPUR IN APPEAL NO.508/10 - 11 DATED 29.4.2011, WHERE THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. 4 7. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, THE CIT( A) DELETED THE ADDITION AND HELD AS UNDER: - I HAVE GONE THROUGH THE OBSERVATIONS OF THE A.O. AND SUBMISSIONS OF THE APPELLANT. THIS ISSUE WAS DECIDED IN THE CASE OF M/S. R.P. REAL ESTATE PVT. ITD., RAIPUR IN APPELLANTS FAVOUR. THE FACTS AND CIRCUMSTANCE S AND APPELLANT'S SUBMISSIONS BEING SAME, THE OPERATIVE PART OF THE SAID ORDER IS REPRODUCED BELOW: - '3.3. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AND SUBMISSIONS OF THE APPELLANT. IT IS NOT IN DISPUTE THAT THE PAYMENT WAS MADE IN CASH FOR P URCHASE OF LAND. I FIND THAT THE PURCHASES MADE BY THE APPELL ANT ARE SUPPORTED BY DULY REGISTERED PURCHASE D EEDS IN ALL THE CASES. I FIN D TH A T THE PURCHASES MADE BY THE APPELLANT ARE SUPPORTED BY DULY REGISTERED PURCHASE DEEDS IN ALL THE CASES. I FIND FORCE IN THE SUBMISSIONS OF THE APPELLANT THAT IDENTITY OF THE PERSONS TO WHOM PAYMENTS WAS MADE FOR PURCHASE OF LAND HAS BEEN ESTABLISHED BEYOND DOUBT AND GENUINEN3SS OF THE PAYMENT IS ALSO NOT IN DISPUTE AS THE SAME HAS BEEN WITNESSED AN D AUTHENTICATED BY THE REGISTERED SALE DEEDS. AT THIS JUNCTURE, IT IS IMPERATIVE TO GO BACK TO THE LEGISLATIVE HISTORY AND OBJET BEHIND INSERTION OF SECTION 40A(3_) IN THE STATUE BOO K. 3.4 SUB - SECTION (3) WAS INSERTED BY THE FINANCE ACT, 1968, WITH EFFECT FROM 1.4.1969, THE OBJECT OF THE INTRODUCTION OF THIS SUB - SECTION WAS EXPLAINED IN A CIRCULAR NO.6P DATED 6.7.1968. '76 SUB SECTION (3) OF NEW SECTION 40A MAKES A PROVISION OF THE DI SALLOWANCE OF EXPENDITURE INCURRED IN BUSINESS AND PROFESSIONS FOR WHICH PAYMENT IS MADE IN AN AMOUNT EXCEEDING RS.2,500/ - , OTHERWISE THAN BY A CROSSED CHEQUES DRAWN ON A BANK OR A CROSSED BANK DRAFT. THIS PROVISION WILL APPLY IN RESPECT OF PAYMENTS MADE A FTER A DATE TO BE NOTIFIED BY THE GOVERNMENT, BEING A DATE NOT LATER THAN 31.03.1969. THIS PROVISION IS DEIGNED TO COUNTER EVASION OF A TAX THROUGH CLAIMS FOR EXPENDITURE SHOWN TO HAVE BEEN INCURRED IN CASH WITH A VIEW TO FRUSTRATING PROPER INVESTIGATION B Y THE DEPARTMENT AS TO THE IDENTITY OF THE PAYEE AND THE REASONABLENESS OF THE PAYMENT. ' 3.5 THE OBJECTIVE OF SECTION 40A(3) REQUIRING SUCH PAYMENTS TO BE MADE BY CROSSED CHEQUE OR DRAFT HAS BEEN REPEATEDLY STRESSED BY THE COURT, AS FOR EXAMPLE, IN WALFOR D TRANSPORT (EASTERN INDIA) VS CIT AS UNDER. 'FROM A PERUSAL OF DECISION OF DIFFERENT HIGH COURTS REFERRED TO ABOVE, IT CLEARLY EMERGES THAT THE PURPOSE OF SECTION 40 A(3) OF THE ACT IS NOT TO PENALIZE THE ASSESSEEFOR MAKING CASH PAYMENT OF AN AMOUNT OFRS. 2,500/ - OR ABOVE. THE PURPOSE IS ONLY PREVENTIVE AND TO CHECK EVASION OF TAX AND FLOW OF UNACCOUNTED MONEY OR TO CHECK TRANSACTIONS WHICH ARE NOT GENUINE AND MAY 5 BE PUT AS CAMOUFLAGE TO EVADE TAX BY SHOWING FICTITIOUS OR FALSE TRANSACTIONS ' IT IS FOR THE P URPOSE OF ENSURING CHECK OF ACCOUNTS THAT SUCH A PROVISION HAS BEEN ENACTED REQUIRING ROUTING OF TRANSACTIONS THROUGH A BANK. 3.6 SUB SECTION (3) EMPOWERS THE AO TO DISALLOW, AS A DEDUCTION ANY EXPENDITURE IN RESPECT OF WHICH PAYMENT IS MADE OF ANY SUM EXC EEDING RS.20,000/ - OTHERWISE THAN THE CROSSED CHEQUE OR CROSSED BANK DRAFT, UNLESS THE PAYMENT IS MADE UNDER THE CIRCUMSTANCES WHICH MAY BE PRESCRIBED BY THE RULES, HAVING REGARD TO THE NATURE AND EXTENT OF THE BANKING FACILITIES AVAILABLE, CONSIDERATION O F BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS. THE OBJECT OF THE PROVISIONS IS PATENTLY AND CLEARLY DISCERNIBLE ON THE FACE OF THE PROVISION ITSELF. IT IS OBVIOUSLY DESIGNED TO CHECK TAX EVASION BY CLAIMS OF CASH EXPENDITURE WHICH ARE DIFFICULT OF PROPE R INVESTIGATION BY THE REVENUE. FOR THE REASONS MENTIONED ABOVE AND RATIO DECIDED IN THE JUDGMENT D ABOVE, I AM OF THE CONSIDERED OPINION THAT THE AO HAS APPLIED THE PROVISION OF SECTION 40A(3) IN A MECHANICAL MANNER WITHOUT APPRECIATING AND GETTING IN TO OBJECTS BEHIND INSERTION OF SECTION 40 A(3) IN THE INCOME - TAX ACT, 1961. THE AO FAILED TO APPRECIATE THAT THE PROVISO TO SECTION 40A(3) WHICH HAS BEEN SUBSTITUTED BY THE FINANCE ACT, 2007 W.E.F 01.04.2008 PROVIDES THAT NO DISALLOWANCE SHALL BE MADE AND NO PAYMENT SHALL BE DEEMED TO BE PROFITS AND GAINS OF BUSINESS OR PROFESSION WHERE ANY PAYMENT EXCEEDING RS.20,000/ - IS MADE IN SUCH CASES AND SUCH CIRCUMSTANCES AS MAY BE PRESCRIBED, HAVING RECORD TO THE NATURE AND EXTENT OF BANKING FACILITIES, AVAILABLE, C ONSIDERATION OF BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS. IN MY CONSIDERED VIEW, THE AO HAS ERRED IN INVOKING THE PROVISIONS OF SECTION 40 A(3) AS THE TRANSLATION OF PURCHASE ARE GENUINE AND HAVE NOT BEEN PROVED AS FALSE OR MERE COLORABLE DEVICE TO E VADE TAX. HENCE, THE DISALLOWANCE MADE BY THE AO IS DELETED' IN VIEW OF THE ABOVE, THE ISSUE BEING IDENTICAL, I AM OF THE CONSIDERED OPINION THAT THE A.O. IS NOT CORRECT IN INVOKING PROVISIONS OF SEC. 40A(3) OF THE ACT WITH RESPECT TO THE ABOVE TRANSACTION S AND HENCE, THE DISALLOWANCE MADE IS DELETED. THIS GROUND OF APPEAL IS ALLOWED. 8. LD D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT NO EVIDENCE WAS PRODUCED BY THE ASSESSEE EITHER DURING THE COURSE OF HEARING BEFORE THE ASSESSIN G OFFICER OR EVEN BEFORE THE CIT(A) TO SHOW THAT 6 THE PAYMENTS WERE MADE IN CASH OUT OF BUSINESS EXIGENCIES AND, THEREFORE, THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION ON THE GROUND OF BUSINESS EXIGENCIES FOLLOWING THE DECISION IN THE CASE OF R.P. REAL ESTATE PVT LTD (SUPRA) BY THE CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE IS IN BUSINESS OF REAL EST A TE DEALINGS AND DURING THE YEAR, THE ASSESSEE PURCHASED LAND FOR RS.3,41,84,000/ - AND MADE PAYMENT TO 9 PERSONS EXCEEDING RS.20,000/ - IN CASH IN VIOLA TION OF PROVISIONS OF SECTION 40A(3) OF THE ACT. IN THE ABSENCE OF ANY PLAUSIBLE EXPLANATION GIVEN BY THE ASSESSEE TO THE ASSESSING OFFICER, THE ASSESSING OFFICER DISALLOWED DEDUCTION FOR RS.3,41,84,000/ - U/S.40A(3) OF THE ACT. 10. ON APPEAL, THE CIT(A) D ELETED THE ADDITION BY FOLLOWING THE DECISION OF THE CIT(A) IN APPEAL NO.508/10 - 11 DATED 29.4.201 IN THE CASE OF R.P.REAL ESTATE PVT LTD (SUPRA), WHEREIN, THE CIT(A) HAS DELETED THE ADDITION ON THE GROUND OF COMMERCIAL EXIGENCIES. THE ARGUMENTS OF THE LD D.R. IS THAT NO EVIDENCE WAS PRODUCED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) TO THE EFFECT THAT THERE WAS BUSINESS EXIGENCIES IN MAKING CASH PAYMENT FOR PURCHASE OF LAND TO 9 PARTIES. 7 11. LD A.R. HAS RELIED ON THE ORDER OF THE CIT(A) AN D FURTHER SUBMITTED THAT THE ORDER OF THE CIT(A) IN THE CASE OF R.P.REAL ES TATE PVT LTD (SUPRA) WAS APPEALED AGAINST THE ORDER OF THE CIT(A) BEFORE THE TRIBUNAL. THE TRIBUNAL IN THE CA SE OF ACIT VS R.P.REAL ESTATE P VT LTD., IN I.T.A. NO.173/BIL/11 VIDE ORDER DATED 17.7.2015 CONFIRMED THE ORDER OF THE CIT(A) ON THE GROUND THAT PAYEES ARE ILLITERATE VILLAGERS , WHO WANTED ONLY CASH PAYMENT AND THERE WAS NO DISPUTE REGARDING IDENTITY OF THE PAYEES AND GENUINENESS OF THE TRANSACTION. BEING STILL AGGRIEVED, T HE REVENUE PREFERRED APPEAL BEFORE THE HONBLE HIGH COURT OF CHHATTISHGARH , BILASP UR AND THE HONBLE HIGH COURT IN TAX CASE (INCOME TAX APPEAL) NO.13 OF 2016 IN THE CASE OF ACIT VS R.P.REAL ESTATE PVT LTD., ORDER DATED 1.3.2016, COPY OF WHICH IS PLACED AT PAGE 1 - 3 OF THE PAPER BOOK, UPHELD THE ORDER OF THE TRIBUNAL OBSERVING THAT THAT THE TRIBUNAL HAS INTERPRETED THE PROVISIONS OF SECTION 40A(3) TO HOLD THAT CASH PAYMENTS ABOVE TWENTY THOUSAND RUPEES COULD BE ACCEPTED IF THE CONDITIONS PRESCRIBED IN THE RU LES WERE FULFILLED TO THE SATISFACTION OF THE AUTHORITY CONCERNED. THE REASONING OF THE TRIBUNAL AND THE INTERPRETATION BY IT OF SECTION 40A(3) AND RULE 6DD(G) SUPPORTED BY JUDICIAL PRECEDENT HAVE NOT BEEN ASSAILED IN THIS APPEAL AND NO SUBMISSION HAS BE EN MADE BEFORE US WITH REGARD TO THE SAME. WE ARE SATISFIED THAT THE APPEAL OUGHT NOT TO HAVE FILED AND THERE IS NO QUESTION OF LAW FOR DETERMINATION UNDER SECTION 260A OF THE ACT. 8 12. BEFORE US, LD A.R. SUBMITTED TH A T IN THE CASE OF THE ASSESSEE ALSO, SELLERS ARE EITHER ILLITERATE VILLAGERS OR NEW TO THE BUYER HAS NOT BEEN DOUBTED BY THE DEPARTMENT AND THE SAME WAS EVIDENT FROM SALE DEED AND BOOKS O F ACCOUNT PRODUCED FOR EXAMINATION BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS NOT DOUBTED TH E GENUINENESS/IDENTITY OF THE SELLERS. THE FACT THAT FULL PAYMENT HAD BEEN MADE TO THE SELLERS FOR THE PURCHASE OF LAND IS ALSO NOT DOUBTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSEE WAS PURSUING THE SELLERS FOR A LONG TIME AND WHEN THE SELLERS AGREED TO SELL THE LAND, ASSESSEE HAD NO OTHER OPTION BUT TO PURCHASE ON THE TERMS AND CONDITION OF THE S ELLERS. THERE WAS BUSINESS COMPULSION TO PURCHASE THE PARTICULAR LAND AS THE ASSESSEE HAS ALREADY PURCHASED ADJOINING LANDS F OR THE PURPOSE OF ITS HOUSING PROJECT. IT WAS SUBMITTED THAT THE ASSESSEE WANTED TO ACQUIRE ALL THE ADJOINING LANDS IN THE VICINI TY FOR THE LAUNCH OF ITS PROJECT, IT WAS UNDER COMPULSION TO PURCHASE LAND ON THE TERMS OF THE SELLERS, OTHERWISE IT WOULD HAVE HAMPERED ITS BUSINESS . THUS, THE INSTANCE OF CASH PAYMENT WAS OUT OF BUSINESS COMPULSION AND NOT OPTIO NAL. ALTHOUGH THE ASSESS EE HAAS STRIVED TO MAKE MAJOR PURCHASE IN CHEQUES, SOMETIMES DUE TO UNAVOIDABLE CIRCUMSTANCES , IT WAS IMPERATIVE TO MAKE CASH PAYMENT TO THE SELLERS. 13. THE ASSESSEE EXPLAINED THAT BUSIN ESS COMPULSION WAS THAT ALL THE PURCHASES ARE PART OF PH 139, THE MAJOR PORTION FOR THE LAUNCH OF THE PROJE C T 9 WITHIN PH 139 HAD ALREADY BEEN ACQUIRED BY THE ASSESSEE FOR ITS HOUSING PROJECT. THE FACT CAN BE VERIFIED FROM THE SALE DEED S WHICH ARE ALREADY ON RECORD OF THE ASSESSING OFFICER. AFTER ACQUISITION OF THE ABOVE LAND, THE ASSESSEE LAUNCHED ITS HOUSING PROJECT. PART OF THE LAND WAS ACQUIRED IN THE ASSESSMENT YEAR 2008 - 09. ALSO FOR THE SAME HOUSING PROJECT, ITAT, RAIPUR ALLOWED RELIEF VIDE ITS ORDER DATED 17.7.2015. RECENTLY, THE JAIPUR BENCH OF THE TRIBUNA L HAS HELD THAT THE AMOUNT IN QUESTION WAS BUSINESS EXPEDIENCY OF THE COMPANY TO PAY IN CASH, THEREFORE, SAME IS NOT COVERED UNDE R SECTION 40A(3) OF THE ACT.. I T WAS ARGUED THAT IT IS NOT DISPUTE THAT THE PAYMENT WAS MADE IN CASH FOR PURCHASE OF LAND. PU RCHASE S MADE ARE DULY SUPPORTED BY REGISTERED PURCHASE DEED IN ALL THE CASES. THE SELLERS HAVE APPEARED BEFORE THE SUB - REGISTRAR AT THE TIME OF REGIST RATION. AS PER GENERAL PRACTICE , SUB - REGISTRAR SATISFIES HIMSELF ABOUT THE IDENTITY OF THE SELLER TO ENS URE THAT THE PAYMENT HAS BEEN MADE TO THE RIGHT PERSON. SUB - REGISTRAR ALSO ASKS THE SELLERS WHETHER FULL SUM HAS BEEN RECEIVED BY THEM, THEN ONLY HE REGISTERS THE SALE DEED . THERE IS TOTAL TRANSPARENCY IN DEALING AS REGARDS IDENTITY OF THE PERSON , DEALI NG, TITLE, ETC. FURTHER, PHOTOS OF THE SELLERS DULY SIGNED BY THEM AT THE TIME OF THE REGISTRY FORMS PART OF THE SALE DEED WHICH WAS REGIS TERED BEFORE THE SUB - REGISTRAR. THEREFORE, THE IDENTITY AND GENUINENESS OF THE SELLERS IS BEYOND ANY DOUBT. MOREOVER , SAME IS ALSO AFFIRMED BEFORE THE WITNESS ES . 10 14. IN THE INSTANT CASE, THE ASSESSEE IS IN THE BUSINESS OF REAL ESTATE. DURIN G THE YEAR UNDER CONSIDERATION, IT PURCHASED LAND FROM 9 PERSONS BY MAKING PAYMENT IN CASH EXCEED ING RS.20,000/ - AGGREGATIN G TO RS.3,41,84,000/ - . I N VIOLATION OF SECTION 4 0A(3) OF THE ACT. THE A SSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND HENCE ADDED THE SAME U/S.40A(3) TO THE INCOME OF THE ASSESSEE 15. ON APPEAL, THE CIT( A) DELETED THE DISALLOWANCE BY FOLLOWING THE ORDER OF THE CIT IN THE CASE OF R.P.REAL ESTATE PVT LTD., (SUPRA) FOR ASSESSMENT YEAR 2008 - 09. LD A.R. OF THE ASSESSEE HAS SUBMITTED THAT ON FURTHER APPEAL, THE TRIBUNAL CONFIRMED THE ORDER OF THE CIT(A) AND ST ILL ON APPEAL, THE HONBLE CHHATISGARH HIGH COURT, BILASPUR CONFIRMED THE ORDER OF THE TRIBUNAL. IT IS THE SUBMISSION OF THE LD A.R. THAT THE FACTS IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THE FACTS IN THE ASSESSMENT YEAR 2008 - 09 . THE LANDS WERE PURCHA SED OUT OF BUSINESS EXPEDIENCY FOR THE ONGOING HOUSING PROJECT OF THE ASSESSEE AT PH 139. AS THE SELLERS WERE ILLITERATE VILLAGERS AND THAT SELLERS INSISTED FOR PAYMENT IN CASH, IT WAS FOUND BUSINESS COMPULSION THAT THE ASSESSEE NEEDED THE LAND DESPERATEL Y HAD TO SUCCUMB TO THE TERMS AND CONDITIONS OF THE SELLERS OF THE LAND AND MAKE PAYMENT IN CASH. IT IS ALSO THE SUBMISSION O LD A.R. THAT THE IDENTITY OF THE PAYEES ARE NOT IN DOUBT OR DEBATE AS IN THE REGISTERED SALE DEED, THE PHOTOGRAPHS OF THE SELLERS ARE AFFIXED AND THEY HAVE SIGNED THE SALE DEED IN THE PRESENCE OF THE SUB - 11 REGISTRAR AND ALSO IN THE PRESENCE OF WITNESS ES . THEREFORE, AS THE IDENTITY OF THE PAYEES ARE NOT DOUBT, NO DISALLOWANCE U/S.40A(3) CAN BE MADE IN VIEW OF THE DECISION OF HONBLE J URISDICTIONAL HI GH COURT IN THE CASE OF R.P.REAL ESTATE PVT LTD., ( SUPRA). LD D.R. HAS SIMPLY RELIED ON THE ORDER OF THE ASSESSING OFFICER DURING THE COURSE OF HEARING. HE COULD NOT POINT OUT ANY GOOD REASON TO NOT TO FOLLOW THE ORDER OF THE HONBLE JURI SDICTIONAL HIGH COURT IN THE CASE OF R.P.REAL ESTATE PVT. LTD., (SUPRA). 16. THE HONBLE P& H HIGH COURT IN THE CASE OF GURDAS GARG VS CITA), 2015 (8) TMI 569 , FOR ASSESSMENT YEAR 2009 - 10, WHILE CONSIDERING THE SIMILAR ISSUE, HELD AS UNDER: 3. THE APPELLANT IS ENGAGED INTER ALIA IN TRADING IN PROPERTIES IN HIS INDIVIDUAL NAME. AS NOTED IN THE ASSESSMENT ORDER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE DETAILS OF THE CLOSING STOCK AS ON 31.03.2009 ALONGWITH DETAILS OF SALES/PURCHASES WE RE PLACED ON RECORD. THE CONSIDERATION, WHICH IN RESPECT OF EACH OF THE TRANSACTIONS WAS ADMITTEDLY IN EXCESS OF 20,000/ - , WAS PAID IN CASH. PAYMENT BY DEMAND DRAFT WAS MADE ONLY IN RESPECT OF ONE OF THE TRANSACTIONS. THESE PAYMENTS IN CASH WERE DISALLOW ED BY THE ASSESSING OFFICER AND THE ORDER IN THIS REGARD WAS UPHELD BY THE TRIBUNAL. THE CIT(APPEALS) HAD ALLOWED THE DEDUCTIONS. SECTION 40A(3) OF THE ACT READS THUS: - '40A(3) WHERE THE ASSESSEE INCURS ANY EXPENDITURE IN RESPECT OF WHICH A PAYMENT OR AGGR EGATE OF PAYMENTS MADE TO A PERSON IN A DAY, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE DRAWN ON A BANK OR ACCOUNT PAYEE BANK DRAFT, EXCEEDS TWENTY THOUSAND RUPEES, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF SUCH EXPENDITURE.' IT IS IMPORTANT TO NOTE THE F OLLOWING PROVISO TO THE SECTION: - 'PROVIDED THAT NO DISALLOWANCE SHALL BE MADE AND NO PAYMENT SHALL BE DEEMED TO BE THE PROFITS AND GAINS OF BUSINESS OR PROFESSION UNDER SUB - SECTION(3) AND THIS SUB - SECTION WHERE A PAYMENT OR AGGREGATE OF PAYMENT MADE TO A PERSON IN A DAY, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE DRAWN ON A BANK OR ACCOUNT PAYEE BANK DRAFT EXCEEDS TWENTY THOUSAND RUPEES, IN SUCH CASES AND UNDER SUCH CIRCUMSTANCES 12 AS MAY BE PRESCRIBED, HAVING REGARD TO THE NATURE AND EXTENT OF BANKING FACILI TIES AVAILABLE, CONSIDERATIONS OF BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS.' 4. IT IS IMPORTANT TO NOTE SOME OF THE FINDINGS OF FACT BY THE CIT (APPEALS). THE IDENTITY OF THE PAYEES I.E. THE VENDORS IN RESPECT OF THE LANDS PURCHASED BY THE APPELLANT, WAS ESTABLISHED. THE SALE DEEDS WERE PRODUCED. THE GENUINENESS THEREOF WAS ACCEPTED. THE AMOUNT PAID IN RESPECT OF EACH OF THESE AGREEMENTS WAS CERTIFIED BY THE STAMP REGISTRATION AUTHORITY. THE CIT (APPEALS) HELD THE TRANSACTIONS TO BE GENUINE. ACCORDING LY, THE CIT HELD THAT THE BAR AGAINST THE GRANT OF DEDUCTIONS UNDER SECTION 40A(3) OF THE ACT WAS NOT ATTRACTED. 5. IT IS IMPORTANT TO NOTE THAT THE TRIBUNAL DID NOT UPSET THESE FINDINGS INCLUDING AS TO THE GENUINENESS AND THE CORRECTNESS OF THE TRANSACTIO NS. IT IS ALSO IMPORTANT TO NOTE THAT THE TRIBUNAL NOTED THE CONTENTION ON BEHALF OF THE APPELLANT THAT THERE WAS A BOOM IN THE REAL ESTATE MARKET; THAT IT WAS NECESSARY, THEREFORE, TO CONCLUDE THE TRANSACTIONS AT THE EARLIEST AND NOT TO POSTPONE THEM; THA T THE APPELLANT DID NOT KNOW THE VENDORS AND OBVIOUSLY THEREFORE, INSISTED FOR PAYMENT IN CASH AND THAT AS A RESULT THEREOF, PAYMENTS HAD TO BE MADE IMMEDIATELY TO SETTLE THE DEALS. THE TRIBUNAL DID NOT DOUBT THIS CASE. THE TRIBUNAL, HOWEVER, HELD THAT THE CLAIM FOR DEDUCTION WAS NOT SUSTAINABLE IN VIEW OF SECTION 40A(3) AS THE PAYMENTS WHICH WERE OVER 20,000/ - WERE MADE IN CASH. THE TRIBUNAL, THEREFORE, DISALLOWED THE SAME ONLY ON A CONSTRUCTION OF SECTION 40A(3). THE TRIBUNAL RESTRICTED THE AMBIT OF THE PROVISO TO THE CIRCUMSTANCES MENTIONED IN RULE 6DD OF THE INCOME TAX RULES, 1962. WE FIND IT CONVENIENT TO LET THE ORDER OF THE TRIBUNAL SPEAK FOR ITSELF: - 'THERE IS NO INTENTION OF THE LEGISLATURE TO MAKE A LIST OF NATURE AND EXTENT OF BANKING FACILITIES AVAILABLE AND OTHER FACTORS TO BE DRAFTED BY THE ASSESSEE AT THEIR WHIMS AND FANCIES AND AS SUITS TO THE ASSESSEE. THEREFORE, RULES HAVE BEEN PRESCRIBED WHICH ARE RULE 6DD OF I.T. RULES, 1962 AND NOTHING BEYOND THAT. XXX XXX XXX THE LD. CIT(A) HAS NOT TAK EN THE SAID PROVISO IN THE RIGHT SPIRIT AND HAS JUST ACCEPTED THE SUBMISSIONS AND ARGUMENTS MADE BY THE ASSESSEE AND HAS DELETED THE ADDITION, WHICH IS AGAINST THE FACTS OF THE CASE AND AGAINST THE PROVISIONS OF LAW. 6. RULE 6DD(J) IS NOT EXHAUSTIVE OF THE CIRCUMSTANCES IN WHICH THE PROVISO TO SECTION 40A(3) IS APPLICABLE. IT IS ONLY ILLUSTRATIVE. 7. THE RESPONDENT/ASSESSEE'S CASE IS SUPPORTED BY SEVERAL JUDGMENTS. THE RAJASTHAN HIGH COURT IN SMT. HARSHILA CHORDIA VS. INCOME TAX OFFICER, (2008) 298 ITR 349 HELD AS UNDER: - '14. ABOUT THIS CLAUSE, MANY DOUBTS WERE RAISED AND ENQUIRIES WERE DIRECTED TO THE BOARD AS TO WHAT SHALL CONSTITUTE EXCEPTIONAL AND UNAVOIDABLE CIRCUMSTANCES WITHIN THE MEANING OF CLAUSE (J). THAT LED TO ISSUANCE OF CIRCULAR BY THE BOARD O N MAY 31, 13 1977 ([1977] 108 ITR (ST.) 8), WHICH IS PUBLISHED IN TAXMANN, VOL. 1, 1988 EDITION. SIGNIFICANTLY PARAGRAPH 4 OF THE AFORESAID CIRCULAR SHOWS VERY CLEARLY THAT ALL THE CIRCUMSTANCES IN WHICH THE CONDITIONS LAID DOWN IN RULE 6DD(J) COULD BE APPLIC ABLE CANNOT BE SPELT OUT. HOWEVER, SOME OF THEM WHICH WILL SEEM TO MEET THE REQUIREMENTS OF THE SAID RULE ARE AS FOLLOWS: A. THE PURCHASER IS NEW TO THE SELLER; OR B. THE TRANSACTIONS ARE MADE AT A PLACE WHETHER EITHER THE PURCHASER OR THE SELLER DOES NOT HAVE A BANK ACCOUNT; OR C. THE TRANSACTIONS AND PAYMENTS ARE MADE ON A BANK HOLIDAY; OR D. THE SELLER IS REFUSING TO ACCEPT THE PAYMENT BY WAY OF CROSSED CHEQUE/DRAFT AND THE PURCHASER'S BUSINESS INTEREST WOULD SUFFER DUE TO NON - AVAILABILITY OF GOODS OTHER WISE THAN FROM THIS PARTICULAR SELLER; OR E. THE SELLER, ACTING AS A COMMISSION AGENT, IS REQUIRED TO PAY CASH IN TURN TO PERSONS FROM WHOM HE HAS PURCHASE THE GOODS; OR F. SPECIFIC DISCOUNT IS GIVEN BY THE SELLER FOR PAYMENT TO BE MADE BY WAY OF CASH. 15. IT WAS FURTHER CLARIFIED IN PARAGRAPH 6 THAT THE ABOVE CIRCUMSTANCES ARE NOT EXHAUSTIVE BUT ILLUSTRATIVE. 16. THEREFORE, IN OUR OPINION, THE TRIBUNAL WAS CLEARLY IN ERROR IN NOT TRAVELLING BEYOND THE CIRCUMSTANCES REFERRED TO IN PARAGRAPH 4 OF THE CIRCULA R AND TO CONSIDER THE EXPLANATION SUBMITTED BY THE ASSESSEE ON ITS OWN MERIT. 17. SIGNIFICANTLY PARAGRAPH 5 REPRODUCED HEREINBELOW GIVES A CLEAR INDICATION THAT RULE 6DD(J) HAS TO BE LIBERALLY CONSTRUED AND ORDINARILY WHERE THE GENUINENESS OF THE TRANSACTI ON AND THE PAYMENT AND IDENTITY OF THE RECEIVER IS ESTABLISHED, THE REQUIREMENT OF RULE 6DD(J) MUST BE DEEMED TO HAVE BEEN SATISFIED. PARAGRAPH 5 OF THE CIRCULAR READS AS UNDER [1977] 108 ITR (ST.) 8, 9: 5. IT CAN BE SAID THAT IT WOULD, GENERALLY, SATISFY THE REQUIREMENTS OF RULE 6DD(J), IF A LETTER TO THE ABOVE EFFECT IS PRODUCED IN RESPECT OF EACH TRANSACTION FALLING WITHIN THE CATEGORIES LISTED ABOVE FROM THE SELLER GIVING FULL PARTICULARS OF HIS ADDRESS, SALES TAX NUMBER/PERMANENT ACCOUNT NUMBER, IF ANY , FOR THE PURPOSES OF PROPER IDENTIFICATION TO ENABLE THE INCOME - TAX OFFICER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE TRANSACTION. THE INCOME - TAX OFFICER WILL, HOWEVER, RECORD HIS SATISFACTION BEFORE ALLOWING THE BENEFIT OF RULE 6DD(J). 18. IT APPEA RS THAT FULFILMENT OF THE CONDITIONS OF PARAGRAPH 5 OF THE CIRCULAR HAS CLEARLY ESCAPED THE ATTENTION OF THE TRIBUNAL. THE CIRCULAR CLEARLY INDICATES THAT ORDINARILY WHERE THE INCOME - TAX OFFICER IS SATISFIED ABOUT THE GENUINENESS OF THE TRANSACTION AND PAY MENT AND IDENTIFICATION OF THE CASH PAYMENT IS ESTABLISHED, THE INCOME - TAX OFFICER SHALL RECORD HIS SATISFACTION ABOUT THE FULFILMENT OF THE CONDITIONS 14 FOR ALLOWING THE BENEFIT OF RULE 6DD(J). APPARENTLY, SECTION 40A(3)WAS INTENDED TO PENALIZE THE TAX EVAD ER AND NOT THE HONEST TRANSACTIONS AND THAT IS WHY AFTER FRAMING OF RULE 6DD (J), THE BOARD STEPPED IN BY ISSUING THE AFORESAID CIRCULAR. 19. THIS CLARIFICATION, IN OUR OPINION, IS IN CONFORMITY WITH THE PRINCIPLE ENUNCIATED BY THE SUPREME COURT IN CTO V. SWASTIK ROADWAYS AS NOTICED ABOVE. 20. IN THIS CASE, THERE IS NO DISPUTE ABOUT THE GENUINENESS OF THE TRANSACTIONS AND THE PAYMENT AND IDENTITY OF THE RECEIVER ARE ESTABLISHED. THEREFORE, THE CASE CLEARLY FELL WITHIN THE PARAMETERS OF PARAGRAPHS 4 AND 5 OF THE AFORESAID CIRCULAR READ TOGETHER.' 8. THE RESPONDENT'S CASE IS ALSO SUPPORTED BY THE JUDGMENT OF THE SUPREME COURT IN ATTAR SINGH GURMUKH SINGH VS. ITO, (1991) 4 SCC 385. AFTER REFERRING TO RULE 6DD, THE SUPREME COURT HELD: - '7. IN OUR OPINION, THERE IS LITTLE MERIT IN THIS CONTENTION. SECTION 40 - A(3) MUST NOT BE READ IN ISOLATION OR TO THE EXCLUSION OF RULE 6 - DD. THE SECTION MUST BE READ ALONG WITH THE RULE. IF READ TOGETHER, IT WILL BE CLEAR THAT THE PROVISIONS ARE NOT INTENDED TO RESTRICT THE BUSINE SS ACTIVITIES. THERE IS NO RESTRICTION ON THE ASSESSEE IN HIS TRADING ACTIVITIES. SECTION 40 - A (3) ONLY EMPOWERS THE ASSESSING OFFICER TO DISALLOW THE DEDUCTION CLAIMED AS EXPENDITURE IN RESPECT OF WHICH PAYMENT IS NOT MADE BY CROSSED CHEQUE OR CROSSED BAN K DRAFT. THE PAYMENT BY CROSSED CHEQUE OR CROSSED BANK DRAFT IS INSISTED ON TO ENABLE THE ASSESSING AUTHORITY TO ASCERTAIN WHETHER THE PAYMENT WAS GENUINE OR WHETHER IT WAS OUT OF THE INCOME FROM DISCLOSED SOURCES. THE TERMS OF SECTION 40 - A(3) ARE NOT ABSO LUTE. CONSIDERATION OF BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS ARE NOT EXCLUDED. THE GENUINE AND BONA FIDE TRANSACTIONS ARE NOT TAKEN OUT OF THE SWEEP OF THE SECTION. IT IS OPEN TO THE ASSESSEE TO FURNISH TO THE SATISFACTION OF THE ASSESSING OFFICER THE CIRCUMSTANCES UNDER WHICH THE PAYMENT IN THE MANNER PRESCRIBED IN SECTION 40 - A(3) WAS NOT PRACTICABLE OR WOULD HAVE CAUSED GENUINE DIFFICULTY TO THE PAYEE. IT IS ALSO OPEN TO THE ASSESSEE TO IDENTIFY THE PERSON WHO HAS RECEIVED THE CASH PAYMENT. RULE 6 - DD PROVIDES THAT AN ASSESSEE CAN BE EXEMPTED FROM THE REQUIREMENT OF PAYMENT BY A CROSSED CHEQUE OR CROSSED BANK DRAFT IN THE CIRCUMSTANCES SPECIFIED UNDER THE RULE. IT WILL BE CLEAR FROM THE PROVISIONS OF SECTION 40 - A(3) AND RULE 6 - DD THAT THEY ARE INTE NDED TO REGULATE THE BUSINESS TRANSACTIONS AND TO PREVENT THE USE OF UNACCOUNTED MONEY OR REDUCE THE CHANCES TO USE BLACK MONEY FOR BUSINESS TRANSACTIONS. [SEE: MUDIAM OIL COMPANY V. ITO[(1973) 92 ITR 519 (AP)] ]. IF THE PAYMENT IS MADE BY A CROSSED CHEQUE DRAWN ON A BANK OR A CROSSED BANK DRAFT THEN IT WILL BE EASIER TO ASCERTAIN, WHEN DEDUCTION IS CLAIMED, WHETHER THE PAYMENT WAS GENUINE AND WHETHER IT WAS OUT OF THE INCOME FROM DISCLOSED SOURCES. IN INTERPRETING A TAXING STATUTE THE COURT CANNOT BE OBLIV IOUS OF THE PROLIFERATION OF BLACK MONEY WHICH IS UNDER CIRCULATION IN OUR COUNTRY. ANY RESTRAINT INTENDED TO CURB THE CHANCES AND OPPORTUNITIES TO USE OR CREATE BLACK MONEY SHOULD NOT BE REGARDED AS CURTAILING THE FREEDOM OF TRADE OR BUSINESS.' 9. AT THE COST OF REPETITION, THE TRIBUNAL HAS NOT DISBELIEVED THE TRANSACTIONS OR THE GENUINENESS THEREOF. NOR HAS IT DISBELIEVED THE FACT OF PAYMENTS HAVING BEEN MADE. MORE IMPORTANT, THE REASONS FURNISHED BY THE APPELLANT FOR HAVING MADE THE CASH PAYMENTS, WHICH WE HAVE ALREADY ADVERTED TO, HAVE NOT BEEN DISBELIEVED. IN OUR 15 VIEW, ASSUMING THESE REASONS TO BE CORRECT, THEY CLEARLY MAKE OUT A CASE OF BUSINESS EXPEDIENCY. 10. IN THE CIRCUMSTANCES, THE ORDER OF THE TRIBUNAL IN THIS REGARD IS SET ASIDE. THE PAYMENTS CANNOT BE DISALLOWED UNDER SECTION 40A(3) OF THE ACT. 17. THE AMRITSAR BENCH OF THE TRIBUNAL IN THE CASE OF RAKESH KUMAR VS. ASSISTANT COMMISSIONER OF INCOME TA X, (2016) 46 CCH 0270 ASR TRIB , FOR ASSESSMENT YEAR 2010 - 2011 HELD AS UNDER: PUNJAB & HARYANA HIGH COURT IN THE CASE OF GURDAS GARG VS. CIT HELD THAT . FULFILLMENT OF THE CONDITIONS OF PARAGRAPH 5 OF THE CIRCULAR HAS CLEARLY ESCAPED THE ATTENTION OF THE T RIBUNAL. THE CIRCULAR CLEARLY INDICATES THAT ORDINARILY WHERE THE INCOME - TAX OFFICER IS SATISFIED ABOUT THE GENUINENESS OF THE TRANSACTION AND PAYMENT AND IDENTIFICATION OF THE CASH PAYMENT IS ESTABLISHED, THE INCOME - TAX OFFICER SHALL RECORD HIS SATISFACTI ON ABOUT THE FULFILMENT OF THE CONDITIONS FOR ALLOWING THE BENEFIT OF RULE 6DD(J). APPARENTLY, SECTION 40A(3)WAS INTENDED TO PENALIZE THE TAX EVADER AND NOT THE HONEST TRANSACTIONS AND THAT IS WHY AFTER FRAMING OF RULE 6DD (J), THE BOARD STEPPED IN BY ISSU ING THE AFORESAID CIRCULAR. SUPREME COURT IN ATTAR SINGH GURMUKH SINGH V. ISO [1991] 191 1TR 667/59 TAXMAN 11. AFTER REFERRING TO RULE 6DD, THE SUPREME COURT HELD THAT SECTION 40 - A( 3) MUST NOT BE READ IN ISOLATION OR TO THE EXCLUSION OF RULE 6 - DD. THE SECTION MUST BE READ ALONG WITH THE RULE. IF READ TOGETHER, IT WILL BE CLEAR THAT THE PROVISIONS ARE NOT INTENDED TO RESTRICT THE BUSINESS ACTIVITIES. THERE IS NO RESTRICTION ON THE ASS ESSEE IN HIS TRADING ACTIVITIES. SECTION 40 - A (3) ONLY EMPOWERS THE ASSESSING OFFICER TO DISALLOW THE DEDUCTION CLAIMED AS EXPENDITURE IN RESPECT OF WHICH PAYMENT IS NOT MADE BY CROSSED CHEQUE OR CROSSED BANK DRAFT. THE PAYMENT BY CROSSED CHEQUE OR CROSSED BANK DRAFT IS INSISTED ON TO ENABLE THE ASSESSING AUTHORITY TO ASCERTAIN WHETHER THE PAYMENT WAS GENUINE OR WHETHER IT WAS OUT OF THE INCOME FROM DISCLOSED SOURCES. THE TERMS OF SECTION 40 - A(3) ARC NOT ABSOLUTE. CONSIDERATION OF BUSINESS EXPEDIENCY AND OT HER RELEVANT FACTORS ARE NOT EXCLUDED. THE GENUINE AND BONA FIDE TRANSACTIONS ARE NOT TAKEN OUT OF THE SWEEP OF THE SECTION. IT IS OPEN TO THE ASSESSEE TO FURNISH TO THE SATISFACTION OF THE ASSESSING OFFICER THE CIRCUMSTANCES UNDER WHICH THE PAYMENT IN THE MANNER PRESCRIBED IN SECTION 40 - A(3) WAS NOT PRACTICABLE OR WOULD HAVE CAUSED GENUINE DIFFICULTY TO THE PAYEE. IT IS ALSO OPEN TO THE ASSESSEE TO IDENTIFY THE PERSON WHO HAS RECEIVED THE CASH PAYMENT. RULE 6 - DD PROVIDES THAT AN 16 ASSESSEE CAN BE EXEMPTED FR OM THE REQUIREMENT OF PAYMENT BY A CROSSED CHEQUE OR CROSSED BANK DRAFT IN THE CIRCUMSTANCES SPECIFIED UNDER THE RULE. IT WILL BE CLEAR FROM THE PROVISIONS OF SECTION 40 - A(3) AND RULE 6 - DD THAT THEY ARC INTENDED TO REGULATE THE BUSINESS TRANSACTIONS AND TO PREVENT THE USE OF UNACCOUNTED MONEY OR REDUCE THE CHANCES TO USE BLACK MONEY FOR BUSINESS TRANSACTIONS. IF THE PAYMENT IS MADE BY A CROSSED CHEQUE DRAWN ON A BANK OR A CROSSED BANK DRAFT THEN IT WILL BE EASIER TO ASCERTAIN, WHEN DEDUCTION IS CLAIMED, WHE THER THE PAYMENT WAS GENUINE AND WHETHER IT WAS OUT OF THE INCOME FROM DISCLOSED SOURCES. IN INTERPRETING A TAXING STATUTE THE COURT CANNOT BE OBLIVIOUS OF THE PROLIFERATION OF BLACK MONEY WHICH IS UNDER CIRCULATION IN OUR COUNTRY. ANY RESTRAINT INTENDED T O CURB THE CHANCES AND OPPORTUNITIES TO USE OR CREATE BLACK MONEY SHOULD NOT BE REGARDED AS CURTAILING THE FREEDOM OF TRADE OR BUSINESS.' AT THE COST OF REPETITION, THE TRIBUNAL HAS NOT DISBELIEVED THE TRANSACTIONS OR THE GENUINENESS THEREOF. NOR HAS IT DI SBELIEVED THE FACT OF PAYMENTS HAVING BEEN MADE. MORE IMPORTANT, THE REASONS FURNISHED BY THE APPELLANT FOR HAVING MADE THE CASH PAYMENTS, WHICH ITAT HAVE ALREADY ADVERTED TO, HAVE NOT BEEN DISBELIEVED. IN ITAT VIEW, ASSUMING THESE REASONS TO BE CORRECT, T HEY CLEARLY MAKE OUT A CASE OF BUSINESS EXPEDIENCY. IN THE PRESENT CASE, THE GENUINENESS OF PAYMENT HAS NOT BEEN DOUBTED AS ASSESSING OFFICER HIMSELF HAS HELD THAT SALE DEEDS OF PROPERTIES WERE REGISTERED WITH THE REVENUE DEPARTMENT OF GOVT. THEREFORE, THE CASE OF THE ASSESSEE IS FULLY COVERED BY THE ABOVE DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT. THEREFORE, RESPECTFULLY FOLLOWING THE SAME ITAT ALLOWED THE GROUND OF APPEAL FILED BY ASSESSEE. 18. IN VIEW OF ABOVE, WE DO NOT FIND ANY GOOD AND JUST IFIABLE REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS HEREBY CONFIRMED AND GROUND OF APPEAL OF THE REVENUE IS DISMISSED . 19 . IN THE RESULT, THE APPEAL F ILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCE D IN THE OPEN COURT ON 11 /05 /2017 IN THE PRESENCE OF PARTIES. SD/ - SD/ - 17 (GEORGE GEORGE K ) ( N.S SAINI) JUDICIAL MEMBER A CCOUNTANT MEMBER RAIPUR ; DATED 11 /05 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY 1. THE APPELLANT : DCIT, 1(2), RAIPUR 2. THE RESPONDENT. RCP INFRATECH PVT LTD, VIP STREET, KHAMARDIH, SHANKAR NAGAR, RAIPUR 3. THE CIT(A) RAIPUR 4. PR.CIT , RAIPUR 5. DR, ITAT, RAIPUR 6. GUARD FILE. //TRUE COPY//