SHREE SALASAR OVERSEAS P LTD., Jaipur V. DCIT, Jaipur

ITA 56/JPR/2010

• Counselvise Citation: 5623114 RSA 2010
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 21-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINOD JOHARI
• Keywords: Income from undisclosed sources; Reasonable cause; Corroborative evidences
• Section: 40A(3)

Judgement Text

1 ITA 56(2)-10 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 56/JP/2010 & 120/JP/2011 ASSTT. YEAR : 2006-07 & 07-08. SHREE SALASAR OVERSEAS PVT. LTD., VS. THE DCIT, CI RCLE-2, C/O M/S. R. MOHNOT & CO., JAIPUR. C-68, LAL KOTHI SCHEME, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIJAY GOYAL RESPONDENT BY : SHRI VINOD JOHARI DATE OF HEARING : 20.9.2011. DATE OF PRONOUNCEMENT : 21.10.2011. ORDER DATE OF ORDER : 21/10/2011. PER R.K. GUPTA, J.M. THESE ARE TWO APPEALS BY THE ASSESSEE AGAINST THE ORDERS OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2006-07 AND 07-08. 2. GROUND NO. 1 IN APPEAL FOR ASSESSMENT YEAR 2006- 07 AGAINST CONFIRMING THE ADDITION MADE BY AO WAS NOT PRESSED AT THE TIME OF HEARING, THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 3. THE REMAINING GROUNDS FOR ASSESSMENT YEAR 2006-0 7 AND ONLY GROUND FOR ASSESSMENT YEAR 2007-08 ARE AGAINST CONFIRMING DISA LLOWANCE MADE UNDER SECTION 40A(3) AT RS. 29,57,110/- AND RS. 49,15,376/- RESPECTIVELY . 2 4. SINCE ISSUE IN BOTH THE APPEALS ARE IDENTICAL, T HEREFORE, THEY ARE DISPOSED OFF TOGETHER. 5. THE ASSESSEE COMPANY IS A COLONIZER AND DEVELOPE R AND ITS BUSINESS IS TO BUY AGRICULTURAL LAND AND GET IT CONVERTED INTO RESIDEN TIAL AND COMMERCIAL PURPOSE BY OBTAINING APPROVAL FROM JAIPUR DEVELOPMENT AUTHORIT Y IN ACCORDANCE WITH PROVISIONS OF RAJASTHAN LAND REVENUE AND JDA. THE ASSESSEE DIVID ED THE LAND IN PLOTS OF VARIOUS SIZES AND CARRIES VARIOUS DEVELOPMENTAL ACTIVITIES LIKE ROADS, WATER FACILITY, ELECTRIC FACILITY AS PER NORMS OF JDA. THE ASSESSEE SELLS P LOTS DIRECTLY OR THROUGH BROKER TO THE CUSTOMERS. THE ASSESSEE IS ALSO ENGAGED IN SELLING OF PLOTS ON COMMISSION BASIS IN RESPECT OF LANDS, WHICH IS OWNED BY ANOTHER PERSON, BUT THE ASSESSEE ENTERS INTO CONTRACT TO DEVELOP IT IN ALL RESPECT, SALE IT ON ITS OWN ON THE AGREED PRICE AND EARNING COMMISSION ON SALE CONSIDERATION AS PER PRE-DETERMINED RATES A S PER AGREEMENT. 6. THE ASSESSEE FILED ITS RETURN OF INCOME FOR BOTH THE YEARS AND BOTH THE YEARS WERE SELECTED FOR SCRUTINY. DURING THE ASSESSMENT PROCE EDINGS, THE AO NOTICED THAT ASSESSEE HAS MADE CASH PAYMENTS TO FARMERS IN VILLAGES FROM WHOM THE LANDS SHOWN TO HAVE BEEN PURCHASED. THE AO ALSO NOTED THAT TO SOME FARMERS THE PAYMENTS WERE MADE BY CHEQUE ALSO. HOWEVER, ON RETURNING THE CHEQUES, CASH PAYME NTS WERE MADE. SUCH CASH PAYMENTS WERE NOTICED BY THE AO AT RS. 1,47,85,550/- FOR ASS ESSMENT YEAR 2006-07 AND CASH PAYMENTS OF RS. 2,47,76,880/- FOR ASSESSMENT YEAR 2 007-08. 7. THE AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE THAT WHY IN VIEW OF PROVISIONS OF SECTION 40A(3) AN ADDITION @ 20% OF SUCH PAYMENT S MADE OTHERWISE BY CROSS CHEQUE OR BANK DRAFT BE NOT ADDED TO THE TOTAL INCOME. DE TAILED WRITTEN SUBMISSIONS WERE FILED ON BEHALF OF THE ASSESSEE. FIRSTLY, IN THE WRITTEN SUBMISSIONS IT WAS EXPLAINED THAT THE 3 PAYMENTS WERE MADE BY MANAGING DIRECTOR OF THE COMP ANY SHRI GYAN CHAND AGARWAL AS AN AGENT OF THE ASSESSEE COMPANY AND NOT AS ITS DIRECTOR, IN AS MUCH A COMPANY CANNOT ACT ON ITS OWN BUT THROUGH ITS DIRECTOR, WHO QUA THE COMPANY, HAVE THE RELATIONSHIP OF AN AGENT TO ITS CAPACITY. SECONDLY , THAT THE SELLER OF LAND IS A RESIDENT OF A PARTICULAR VILLAGE WHICH IS NOT SERVED BY ANY BANK AND THAT THE SELLER OF LAND IS A FARMER AND INSISTED FOR CASH PAYMENT IN THE FIRST INSTANCE OR LATER WHEN THE CHEQUES ISSUED TO HIM WERE RETURNED DISHONOURED. THIRDLY, THAT THE PAYME NTS IN CASH HAVE BEEN MADE AFTER THE BANKING HOURS. ACCORDINGLY, IT WAS SUBMITTED THAT THE CASE OF THE ASSESSEE IS COVERED BY SUB-CLAUSE (E), (G), (H), (J) AND (K) OF RULE 6DD O F IT RULES. THE AO FOUND THAT THE EXPLANATION OF THE ASSESSEE IS NOT SATISFACTORY. T HEREAFTER THE AO DEALT WITH THE EXPLANATION GIVEN BY ASSESSEE PARA-WISE. 7.1. REGARDING THAT SHRI GYAN CHAND AGARWAL, MANAGI NG DIRECTOR WAS ACTING AS AN AGENT AND NOT AS AN EMPLOYEE WAS NOT ESTABLISHED BY ANY DOCUMENTARY PROOF OR EVIDENCE IN THE FORM OF ANY SUCH AGENCY AGREEMENT OR ANY COM MISSION PAID TO THE DIRECTOR FOR EXECUTING SUCH AN AGENCY ON BEHALF OF THE COMPANY. ACCORDINGLY THIS EXPLANATION WAS REJECTED. 7.2. REGARDING THE SECOND SUBMISSION WHICH IS ON PA YMENT MADE TO PERSONS LIVING IN VILLAGES WHERE NO BANKING SERVICES ARE AVAILABLE. THE AO NOTED THAT AT SOME POINT OF TIME THE SAID SELLER WAS PAID BY ACCOUNT PAYEE CHEQ UE AND, THEREFORE, IT CANNOT BE SAID THAT THERE WAS NO BANKING SERVICE AVAILABLE. IT WA S FURTHER MENTIONED BY THE AO THAT THERE IS NO EVIDENCE FILED ON RECORD THAT ON BOUNCI NG THE CHEQUE THE FARMERS HAVE INSISTED FOR CASH PAYMENT OTHERWISE THEY WILL CANCEL THEIR A GREEMENT. THEREFORE, UNDER THESE CIRCUMSTANCES THE EXPLANATION OF THE ASSESSEE WAS A LSO REJECTED. 4 7.3. THE AO HAS FURTHER NOTED THAT NO SUPPORTING EV IDENCE HAS BEEN FILED BY THE ASSESSEE THAT WHY THE PAYMENTS WERE MADE AFTER BANK ING HOURS. THEREFORE, THIS EXPLANATION WAS ALSO REJECTED BY THE AO. IN VIEW O F THESE FACTS AND CIRCUMSTANCES, THE AO MADE AN ADDITION @ 20% OF SUCH CASH PAYMENTS MAD E BY THE ASSESSEE TO THE SELLER FARMERS UNDER SECTION 40A(3) FOR BOTH THE YEARS RES PECTIVELY. THE FIGURE OF DISALLOWANCE HAS BEEN MENTIONED SOMEWHERE ABOVE IN THIS ORDER. 8. ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A). DETAILED SUBMISSIONS WERE FILED BEFORE HIM WHICH ARE DISCUSSED BY LD. CIT (A) AT PA GES 4 & 5 OF HIS ORDER FOR ASSESSMENT YEAR 2006-07 AND AT PAGES 4 TO 7 FOR ASSESSMENT YEA R 2007-08. THEREAFTER THE LD. CIT (A) BY OBSERVING HIS OBSERVATIONS AT PAGES 5 & 6 FOR AS SESSMENT YEAR 2006-07 CONFIRMED THE FINDING OF THE AO, AS UNDER :- CONTENTION OF THE AR IS CONSIDERED. MOST OF THE ARGUMENTS TAKEN BY THE A/R ARE THE SAME AS TAKEN BEFORE THE AO. THE AO HA S CONSIDERED ALL THE ARGUMENTS PLACED BEFORE HIM AND REJECTED IT BEFORE INVOKING PROVISIONS OF SECTION 40A(3). THE ASSESSMENT ORDER IS A REASONED ONE AND THEREFORE THE ACTION OF THE AO IS APPROVED. SH. GYAN CHAND AGARWA L, MD, HAS NOT ACTED AS AN AGENT BUT AS A DIRECTOR. NO EVIDENCE CO ULD BE PRODUCED BY THE APPELLANT THAT SH. GYAN CHAND AGARWAL HAS NOT ACTED AS A DIRECTOR. THE VERY FACT THAT IN SOME CASES CHEQUES WERE ISSUED TH OUGH THEY WERE DISHONOURED ESTABLISHES THE FACT THAT THE SELLER FA RMERS ARE LOCATED IN VILLAGES WHICH ARE SERVED BY THE BANKING FACILITIES . FOR DISHONOURING OF THE CHEQUES ONLY APPELLANT COMPANY CAN BE BLAMED AND NO T ACCEPTING THE CHEQUES BY THE SELLER FARMERS WAS NOT DUE TO NON-AV AILABILITY OF BANKING FACILITY IN THEIR VILLAGES BUT SO CALLED LACK OF TR UST IN THE APPELLANT COMPANY. THIS CANNOT BE AN EXCUSE FOR MAKING PAYME NT OTHERWISE THAN BY CROSSED CHEQUES/DRAFTS. THE VILLAGES WHERE THE FARMERS RESIDE ARE IN THE NEIGHBORHOOD OF JAIPUR CITY ONLY AND THEREFORE IT CANNOT BE SAID THAT 5 THE PLACES WHERE PAYMENTS WERE MADE WERE NOT COVERE D BY BANK SERVICE. THE CLAIM THAT PAYMENTS WERE MADE AFTER BANKING HOU RS COULD NOT BE SUBSTANTIATED BY GIVING ANY CIRCUMSTANCES WHICH FOR CED TO MAKE ALL THE PAYMENTS AFTER BANKING HOURS. THE AO THEREFORE HAS RIGHTLY REJECTED THE EXPLANATION OFFERED BY THE APPELLANT. UNDER THE FA CTS AND CIRCUMSTANCES THE AR FAILED TO PROVE THAT THE APPELLANTS CASE WA S COVERED BY ANY SUB- CLAUSE OF RULE 6DD. FURTHER SUBMISSION OF THE AR T HAT THE TRANSACTIONS WERE GENUINE AND SOURCE OF PAYMENTS ALONG WITH IDEN TITY OF THE PERSONS ARE NOT IN DOUBT AND THEREFORE THE PURPOSE OF ISSUI NG CROSSED CHEQUES/DRAFTS IS FULFILLED CANNOT BE ACCEPTED AS T HE PROVISIONS OF SEC. 40A(3) ARE IN RESPECT OF GENUINE TRANSACTIONS ONLY. THE PURPOSE OF INTRODUCING THE PROVISIONS OF SEC. 40A(3) WERE TO C URB THE BLACK MONEY AND FOR THAT PURPOSE TO DISCOURAGE THE PRACTICE OF MAKING PAYMENTS IN CASH. RULE 6DD PROVIDES CERTAIN CIRCUMSTANCES WHERE PAYMENTS IN CASH CAN BE ACCEPTED. IN THE PRESENT CASE BY MAKING PAY MENTS IN CASH THAT TOO IN A NUMBER OF CASES IN NO WAY FULFILL THE PURPOSE OF INTRODUCING THE PROVISIONS OF SEC. 40A(3). THE PROVISIONS OF SEC. 40A(3) ARE SUBSTANTIAL PROVISIONS AND MAKING PAYMENTS OF RS. 20,000/- AND ABOVE BY CROSSED CHEQUE/DEMAND DRAFT IS A STATUTORY REQUIREMENT AND NOT A TECHNICAL REQUIREMENT. THE PROVISIONS ARE NOT OF DEDUCTION BU T IS A CHARGING SECTION AND THEREFORE MAKING CASH PAYMENTS CANNOT BE A RIGH T OF THE ASSESSEE. THE AO BY TAKING 20% OF SUCH CASH PAYMENT HAS FULFI LLED STATUTORY OBLIGATION. UNDER THE PROVISIONS THE AO HAS NOT MUC H DIECRETION AND BOUND TO DISALLOW 20% OF SUCH CASH PAYMENTS. THE A CTION OF THE AO IN THE PRESENT CASE IS THEREFORE APPROVED AND ADDITION OF RS. 29,57,110/- MADE BY THE AO IS HEREBY CONFIRMED. FIRST GROUND OF APPEAL IS THUS DECIDED AGAINST THE APPELLANT. 9. SIMILARLY, THE LD. CIT (A) REJECTED THE CONTENTI ON OF THE ASSESSEE FOR ASSESSMENT YEAR 2007-08 AND CONFIRMED THE ACTION OF THE AO. 6 10. NOW ASSESSEE IS IN APPEAL HERE BEFORE US FOR BO TH THE YEARS. 11. DETAILED ARGUMENTS HAVE BEEN ADVANCED BY LD. A/ R. WRITTEN SUBMISSIONS WERE ALSO FILED WHICH ARE PLACED ON RECORD. ATTENTION O F THE BENCH WAS DRAWN ON PAGES 97 TO 108 OF THE PAPER BOOK WHERE CONFIRMED COPY OF VOUCH ER FOR MAKING CASH PAYMENTS ARE PLACED ON RECORD AND THEREIN IT HAS BEEN MENTIONED THAT CASH PAYMENTS HAVE BEEN MADE AFTER BANKING HOURS. HOWEVER, THE AO HAS NOT ACCEP TED THIS EXPLANATION WHICH WAS FILED WITH SUPPORTING EVIDENCE. FURTHER RELIANCE WAS PLA CED ON VARIOUS CASE LAWS MENTIONED IN THE WRITTEN SUBMISSION. 12. ON THE OTHER HAND, LD. D/R, FIRSTLY PLACED RELI ANCE ON THE ORDERS OF THE AO AND LD. CIT (A). IT WAS FURTHER SUBMITTED THAT PROVISIONS OF SECTION 40A(3) ARE VERY CLEAR BY WHICH IT HAS BEEN PROVIDED THAT IF CASH PAYMENTS HA VE BEEN MADE THEN DISALLOWANCE @ 20% WILL BE MADE. THE AO HAS CONSIDERED ALL THE EX PLANATION FILED BEFORE HIM MINUTELY AND THEN HE CAME TO CONCLUSION THAT PROVISIONS OF S ECTION 40A(3) ARE ATTRACTED AND THE CASE OF ASSESSEE DOES NOT FALL IN THE EXCEPTION CLA USES OF RULE 6DD. IT WAS ALSO SUBMITTED THAT ALL THE ARGUMENTS MADE BY LD. A/R ARE HOLLOW I N NATURE. IT WAS ALSO ADDED THAT ASSESSEE MISERABLY FAILED TO SUBSTANTIATE HIS CASE, THEREFORE, ACTION OF THE AO WHICH HAS BEEN CONFIRMED BY LD. CIT (A) IS LIABLE TO BE SUSTA INED. 13. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. WE HAVE ALSO PERUSED THE MATERIAL ON WHICH RELIANCE WAS PLACED B Y BOTH THE PARTIES. WE HAVE GONE THROUGH THE WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE AND THE ORDERS OF THE AUTHORITIES BELOW. THE WRITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE FOR BOTH YEARS ARE SIMILAR EXCEPT DIFFERENCE IN FIGURES. FOR THE SAKE OF CLARITY AND TO UNDERSTAND IN A 7 BETTER MANNER, THE WRITTEN SUBMISSIONS FILED BY ASS ESSEE FOR ASSESSMENT YEAR 2006-07 ARE TABULATED HERE AS UNDER :- 1) THE ASSESSEE EXPLAINED BEFORE THE LOWER AUTHORI TIES THAT ITS CASH PAYMENTS ARE AGAINST THE PURCHASES OF AGRICULTURAL LAND AND THE PAYMENTS WERE MADE TO THE FARMERS. FURTHER, THE CASH PAYMENT S ARE ALSO COVERED BY RULE 6DD. THE BREAK UP OF THE TOTAL CASH PAYMENT FO R THE PURPOSE OF CLAIM OF THE ASSESSEE UNDER RULE 6DD IS AS UNDER :- PARTICULARS AMOUNT CLAUSE (1) NOW CLAUSE (K) OF RULE 6DD IN THESE CASES, THE COMPANY MADE PAYMENT TO SHRI GY AN CHAND AGARWAL (MANAGING DIRECTOR) OF THE COMPANY WHO SUBS EQUENTLY MADE PAYMENT TO THE LABOURS ETC. ON BEHALF OF THE S ELLER OF THE AGRICULTURAL LAND THEREFORE COVERED UNDER CLAUSE (K ) OF RULE 6DD. 88,000 CLAUSE (H) NOW CLAUSE (G) OF 6DD VILLAGES WHERE THE SELLER RESIDES/LAND SITUATED NOT SERVED BY BANKING FACILIT IES. CLAUSE (K) NOW CLAUSE (J) OF RULE 6DD PAYMENTS HAVE TO BE MADE AFTER THE BANKING HOURS. CLAUSE (F) NOW CLAUSE (E) OF RULE 6DD PAYMENTS TO CULTIVATORS AGAINST PURCHASES OF AGRICU LTURAL LAND 1,46,97,550 TOTAL 1,47,85,550 2) CASES COVERED BY SAVING CLAUSE (L) NOW CLAUSE (K) OF RULE 6DD THE ASSESSEE EXPLAINED THAT THE FOLLOWING CASH PAYM ENTS ARE COVERED BY CLAUSE (K) OF RULE 6DD. IN THESE CASES, SHRI GYAN CHAND AGARWAL, MANAGING DIRECTOR OF THE COMPANY MADE THE PAYMENTS ON BEHALF OF THE SELLER OF THE LAND THEREFORE, COVERED UNDER CLAUSE (K) OF RULE 6DD, A DIRECTOR OF A COMPANY IS NOT A SERVANT BUT A N AGENT, INASMUCH AS, THE COMPANY CANNOT ACT IN ITS OWN PERSON BUT HAS ON LY TO ACT THROUGH DIRECTORS WHO, QUA THE COMPANY, HAVE THE RELATIONSH IP OF AN AGENT TO ITS CAPACITY. S.NO. NAME OF PERSON DATE OF PAYMENT AMOUNT PAYMENT MADE AGAINST 1. GOPAL LAL GUPTA 10.08.2005 44000.00 LAND AT BHANKAROTA 8 2. VINOD GUPTA 10.08.2005 44000.00 LAND AT BHANKAROTA THE LD. AO HELD THAT THE PLEA OF THE ASSESSEE THAT ITS MANAGING DIRECTOR WAS ACTING AS AN AGENT IS AFTER THOUGHT AN D TO SAVE THE ASSESSEE FROM RIGOR OF SECTION 40A(3). IN FACT, THE AO REJEC TED THE ASSESSEES EXPLANATION WITHOUT CONSIDERING THE ENTIRE FACTS AN D CIRCUMSTANCES OF THE CASE. THE TOTAL PAYMENTS TO THESE TWO PERSONS WERE OF RS. 26,88,000/- OUT OF WHICH PAYMENT OF RS. 26,00,000/- WAS BY ACCOUNT PAYEE CHEQUES. THE CASH PAYMENT WAS ONLY OF RS. 88,000/-. SUCH MINOR P AYMENT IN CASH CAN ONLY BE IN COMPELLING CIRCUMSTANCES. THERE CANNOT BE INTENTION OF SAVE THE ASSESSEE FROM RIGOR OF PROVISIONS OF SECTION 6D D. ON 10/08/2005, THE MANAGING DIRECTOR OF THE ASSESSE E COMPANY SHRI GYAN CHAND AGARWAL VISITED THE SITE OF THE LAN D FOR MEASUREMENT OF THE LAND. SHRI GYAN CHAND AGARWAL PAID RS. 88,000/- TO THE LABOURS AND OTHER PERSONS WHO WERE DOING THE MEASUREMENT OF THE LAND, AND DEBITED THE AMOUNT TO THE ACCOUNT OF THE SELLER OF THE LAND . HOWEVER, THE INDIVIDUAL PAYMENT TO THE LABOURS ETC. WAS NOT MORE ` THAN RS. 20,000/-. THEREFORE, THE SURROUNDING CIRCUMSTANCES CLEARLY SU GGEST THAT THE EXPLANATION OF THE ASSESSEE IS BONA FIDE AND NOT AF TER THOUGHT. 3) CASES COVERED BY SAVING CLAUSE (H) NOW CLAUSE (G) OF 6DD FOR THE FOLLOWING CASES THE ASSESSEE EXPLAINED THAT THE SELLERS OF THE LAND ARE FARMER AND THEY INSISTED FOR CASH PAYM ENT AS THEY DID NOT HAVE BANKING FACILITIES IN THEIR VILLAGE. THE ASSESSEE E XPLAINED THAT THE SELLERS OF THE LAND ARE RESIDENT OF A VILLAGE, WHICH IS NOT SE RVED BY BANK THEREFORE THE ASSESSEES CASE IS COVERED BY CLAUSE (G) OF RULE 6D D. 9 S.NO. NAME OF PERSON DATE OF PAYMENT AMOUNT VILLAGE WHERE LAND IS SITUATED VILLAGE WHERE THE SELLER RESIDES 1. TARA CHAND SWAMI 03.12.2005 173300.00 LAND AT BHANKAROTA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE NARSINGHPURA. 2. SHYORAM 12.05.2005 1000000.00 LAND AT SUKHIYA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE SUKHIYA 2. SHYORAM 13.05.2005 1260000.00 LAND AT SUKHIYA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE SUKHIYA 3. SHYORAM 11.06.2005 900000.00 LAND AT SUKHIYA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE SUKHIYA 4. SHYORAM 11.05.2005 900000.00 LAND AT SUKHIYA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE SUKHIYA 5. SHYORAM 11.06.2005 900000.00 LAND AT SUKHIYA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE SUKHIYA 6. SHYORAM 11.06.2005 900000.00 LAND AT SUKHIYA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE SUKHIYA 7. KANHEYALAL 08.06.2005 500000.00 LAND AT SUKHIYA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE SUKHIYA 8 KANHEYALAL 09.06.2005 500000.00 LAND AT SUKHIYA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE SUKHIYA 9 KANHEYALAL 09.06.2005 226000.00 LAND AT SUKHIYA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE SUKHIYA 10 KALU 28.05.2005 164750.00 LAND AT JETPURA THE SELLER OF THE LAND IS 10 RESIDENT OF VILLAGE JAITPURA (HAJYAWALA). 11. SHYONATH 28.05.2005 164750.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) 12. RAMU 28.05.2005 164750.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) 13. CHHITTAR 28.05.2005 164750.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) 14. BALU 28.05.2005 164750.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) 15. NARAYAN 28.05.2005 821750.00.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) 16. MANGILAL 01.06.2005 410875.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) 17. HARINARAYAN 01.06.2005 410875.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) 18. BUDHA 01.06.2005 713000.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) 19 GOPAL 02.06.2005 1649500.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF 11 VILLAGE JAITPURA (HAJYAWALA) 20. BHORIYA 02.06.2005 849500.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) 21. RADHEYSHYAM 02.06.2005 849500.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) 22. GOVINDNARAYAN 02.06.2005 849500.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) 23. JAGDISH 14.10.2005 25000.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) 24. MOTILAL 07.11.2005 35000.00 LAND AT JETPURA THE SELLER OF THE LAND IS RESIDENT OF VILLAGE JAITPURA (HAJYAWALA) TOTAL 14697550 4) IT IS AN UNDISPUTED FACT THAT THE ASSESSEE MADE THE PAYMENT TO FARMERS/AGRICULTURIST FOR PURCHASES OF THE AGRICULT URAL LAND. FOR THIS PURPOSE, THE ASSESSEES REPRESENTATIVE VISIT VILLAG E TO VILLAGE TO SEARCH THE APPROPRIATE LAND WHICH IS AVAILABLE FOR SALE THAN T HEY EXAMINE THE REVENUE RECORDS OF THE LAND AND NEGOTIATE THE DEAL WITH FAR MERS. IN MOST OF THE CASES THE UNDIVIDED LAND IS OWNED JOINTLY BY SEVERA L FAMILY MEMBERS, SO THE NEGOTIATION IS REQUIRED TO BE MADE IN JOINT MEE TING OF THE OWNERS OF THE LANDS AND SUCH NEGOTIATIONS/MEETINGS ARE POSSIBLE O NLY AT THE RESIDENCE OF THE OWNERS AND UNDER THESE CIRCUMSTANCES THE FINAL DEAL OF THE LAND IS POSSIBLE AT THE PLACE OF THE OWNERS OF THE LAND. T HE PAYMENTS WERE MADE TO THE FARMERS FOR PURCHASE OF AGRICULTURAL LAND AN D THE PAYMENTS ARE 12 SUPPORTED BY OTHER DOCUMENTARY EVIDENCE LIKE AGREEM ENT TO SALE, SALE DEED AND REVENUE RECORDS OF THE LAND, 90B ORDERS OF JDA ETC. 5) THE ABOVE SAID FARMERS RESIDE IN VILLAGE NARSING HPURA/SUKHIYA OR VILLAGE JAITPURA (HAJYAWALA). ALL THESE THREE VILL AGES WERE NOT SERVED BY BANKING FACILITY. NONE OF THE BANK HAD BRANCH, OR E XTENSION COUNTER OR MOBILE BANKING FACILITY. ATM FACILITY IN THESE VILL AGES AT THE TIME OF PAYMENTS MADE BY ASSESSEE. THESE VILLAGES; HAVE NO BRANCH OF ANY BANK, OR EXTENSION COUNTERS, OR MOBILE BANKS OR ATM FACIL ITY AND THIS FACT HAS NOT BEEN PROVED WRONG BY THE LD. AO. 6) THE LOWER AUTHORITIES HAVE NOT CORRECTLY INTERPR ETED THE MEANING OF PHRASE NOT SERVED BY BANK. THE BANKING FACILIT Y AVAILABLE IN OTHER TOWNS OR BIG VILLAGES FAR FROM THESE VILLAGES DOES NOT MEAN THAT THESE VILLAGES ARE SERVED BY BANKING FACILITY. THE LEGISL ATION USED THE WORDS VILLAGE WHICH IS NOT SERVED BY ANY BANK. VILLAGE S ERVED BY BANK MEANS THAT THE VILLAGES SHOULD HAVE BANKING FACILITY EITH ER BY WAY OF BRANCH OF ANY BANK/MOBILE BANK, ATM FACILITY OR BANKING OUTLE T ETC. THE VILLAGE HAS NOT BEEN DEFINED UNDER INCOME TAX ACT, THEREFOR E, ITS DICTIONARY MEANING SHOULD BE TAKEN. THE VILLAGE HAS BEEN DEFIN ED AS A GROUP OF HOUSES AND ASSOCIATED BUILDINGS, LARGE R THAN A HAMLET AND SMALLER THAN A TOWN, SITUATED IN A RURAL AREA : (O XFORD DICTIONARY) THEREFORE, THE BANKS SITUATED AT DISTRICT HEAD QUAR TERS OR NEARBY TOWNS SHOULD NOT BEEN TAKEN AS SITUATED IN VILLAGE. IF THE INTERPRETATION TAKEN BY THE LD. AO IS CONSIDERED CORRECT THAN IT M EANS THAT ALL THE VILLAGES HAVE BANKING FACILITIES AND IF SO, THE VERY PURPOSE OF THIS CLAUSE WOULD BE DEFEATED. THE OBJECT OF PROVISIONS OF SECTION 40A IS TO CURB FLOW OF BLACK MONEY AND NOT TO PUT AN IMPEDIMENT OVER THE TRADE A ND BUSINESS. IT IS CORRECT TO SAY THAT IT WOULD BE VERY DIFFICULT FOR BANKING COMPANIES TO OPEN OUTLET/BRANCH IN EACH AND EVERY VILLAGE. THE LEGISLATURE AFTER CONSIDERING THIS PRACTICAL DIFFICULTY HAS INTRODUCE D THE SAVING CLAUSE (H) 13 (NOW CLAUSE (G) OF RULE 6DD TO SAVE THE PERSONS FRO M THE RIGOR OF SECTION 6DD IF THE PAYMENT IS MADE IN A VILLAGE WHICH IS NO T SERVED BY ANY BANK, TO A PERSON WHO ORDINARY RESIDES, OR IS CARRYING ON BUSINESS IN SUCH VILLAGE. RELIANCE IS PLACED ON THE FOLLOWING DECIS IONS :- (I) VENKATA SATYANARAYAN TIMBER DEPOT VS. CIT 60 CTR (AP) 157: 165 ITR 253 (AP) (II) CIT VS. ASHISH COAL TRADERS, 163 ITR 174 ( MP) AND (III) CIT VS. BRIJ MOHAN SINGH & CO. 209 ITR 753 (P&H) 7) THE PROVISIONS OF SECTION 40A(3) WERE ENACTED AS ONE OF THE MEASURES FOR COUNTERING EVASION OF TAX. IT WAS FOU ND FROM EXPERIENCE, THAT DEDUCTIONS WERE BEING CLAIMED FOR PAYMENT MADE FROM UNACCOUNTED MONEY IN THE COMPUTATION OF BUSINESS OR PROFESSIONA L INCOME. THIS PROVISION WAS ENACTED TO ENABLE THE ASSESSING AUTHO RITY TO ASCERTAIN WHETHER THE PAYMENT WAS GENUINE OR WHETHER IT WAS O UT OF THE INCOME FROM UNDISCLOSED SOURCES. IN THE CASE OF THE ASSES SEE GENUINENESS AND BONA FIDE OR THE TRANSACTIONS ARE NOT IN DOUBT. TH E IDENTITY OF THE SELLER OF THE LAND IS ESTABLISHED. THE PAYMENT IS NOT ONLY SU PPORTED BY VOUCHERS BUT ALSO BY AGREEMENT TO SALE/SALE DEED. 8) DURING THIS YEAR THE PURCHASES OF LAND WERE OF R S. 17,59,63,150/- AND OUT OF WHICH THE CASH PAYMENTS WERE OF RS. 1,47 ,85,550/- ONLY. THIS SHOWS THAT THE ASSESSEE MADE SINCERE EFFORTS TO COM PLY WITH THE PROVISIONS OF LAW AND TRIED TO MAKE THE PAYMENT BY ACCOUNT PAY EE CHEQUES AS MUCH AS POSSIBLE. THE EXPLANATION OF THE ASSESSEE AS RE GARD PART PAYMENT IN CASH AND PART PAYMENT IN CHEQUE IS AS UNDER :- (A) THE ASSESSEE TRIED TO CONVINCE THE AGRICULTURIS T/FARMERS TO OPEN THEIR BANK ACCOUNT IN NEARBY TOWN AND ACCEPT THE PA YMENTS BY ACCOUNT PAYEE CHEQUES. IN MANY CASES, THE AGRICULTURIST ACC EPTED THE ASSESSEES REQUEST AND AGREED TO OPEN THEIR BANK ACCOUNT IN NE ARBY TOWN ON THE CONDITION THAT THE ASSESSEE WOULD MAKE PAYMENT IN C ASH TILL OPENING OF 14 THEIR BANK ACCOUNT IN NEARBY TOWNS. SO, THE ASSESSE E MADE CASH PAYMENTS TILL THE OPENING OF THEIR BANK ACCOUNT NEARBY TOWNS AND AFTER OPENING OF THEIR BANK ACCOUNT, THE ASSESSEE STARTED TO MAKE TH E PAYMENT BY CHEQUES. (B) IN SOME CASES, THE ASSESSEE MADE PART PAYMENT I N CASH AND PART PAYMENT BY POST DATED CHEQUES. THE POST DATES CHEQU ES WERE GIVEN TO MOTIVATE THE AGRICULTURIST/FARMERS TO OPEN THE BANK ACCOUNT IN NEARBY TOWN. THIS FACT IS PROVED FROM THE PAYMENT CHART R EPRODUCED BY THE AO AT PAGE 4 TO 6 OF HIS ORDER (S.NO. 4 TO 14). IN ALL TH ESE CASES, THE PAYMENTS WERE BY POST DATED CHEQUES AND ALL THESE CHEQUES WE RE CLEARED MUCH AFTER THE DATE OF CASH PAYMENTS. (C) AS REGARD PAYMENT TO SHYRAM (S.NO. 3), WE SUBMI T THAT THE SELLER HAD BANK ACCOUNT IN NEARBY TOWN, AND ASSESSEE CONVI NCED HIM TO ACCEPT THE PAYMENT BY CHEQUES. THE ASSESSEE MADE THE PAYM ENTS BY CHEQUE UPTO 8.12.2004. THE CHEQUE NO. 232413 TO 232416 WERE ISS UED POST DATED AND ON THAT DATE, THE CHEQUES WERE DISHONORED BECAUSE O F INSUFFICIENT FUNDS IN BANK. THE FIRST CHEQUE NO. 232413 DATED 15.04.2005 DISHONORED, THE NEXT CHEQUE DATED 25.04.2005 ALSO DISHONORED AND THE NEX T TWO CHEQUES DATED 9.05.2005 ALSO DISHONORED. THE AGRICULTURIST LOST TRUST OVER THE ASSESSEE. SO THE AGRICULTURIST REFUSED TO TAKE THE FURTHER PA YMENT BY CHEQUES AND THREATEN TO CANCEL THE AGREEMENT OF SALE. IN SUCH COMPELLING CIRCUMSTANCES, THE ASSESSEE HAD TO MAKE THE PAYMENT IN CASH ON 12.05.2005 AND ONWARDS. YOUR HONOUR WOULD SEE THAT NO PAYMENT WAS MADE IN CASH TILL THE DATE OF DISHONOR OF CHEQUE. I N SUCH CIRCUMSTANCES NO DISALLOWANCE U/S 40A(3) SHOULD BE MADE FOR THE PAYM ENTS MADE TO SHYORAM (S.NO. 3, PAGE 3 OF ASTT. ORDER.). RELIANC E IS PLACED ON THE FOLLOWING DECISIONS :- (I) CIT VS. S.B. SAINI BROS. 161 ITR 415 (P&H) (II) CIT VS. MEEIHDOOT SALES, 200 ITR 490 (DEL.) 15 IN THESE CASES THE EXCEPTIONAL OR UNAVOIDABLE CIRCU MSTANCE WAS INFERRED FROM FACTS OF LARGE NUMBER OF CHEQUES ISSUED BY THE ASSESSEE WERE BEING DISHONORED BY THE BANK AND SELLERS INSISTED UPON CA SH PAYMENTS. 9) CLAUSE (F) NOW CLAUSE (E) OF RULE 6DD :- IT IS U NDISPUTED FACT THAT THE PAYMENTS WERE MADE TO THE AGRICULTURIST FOR PUR CHASES OF LAND. THE PURPOSE OF INSERTION OF CLAUSE (F) OF RULE 6DD IS T O EXEMPT THE CASH PAYMENT TO AGRICULTURIST/FARMERS FROM THE PREVIEW O F SECTION 40A(3). THIS CLAUSE WAS INSERTED IN THE LEGISLATURE AFTER CONSID ERING THE PRACTICAL DIFFICULTY IN PAYMENTS TO FARMERS/AGRICULTURIST BY ACCOUNT PAYEE CHEQUES. MOST OF THE AGRICULTURISTS ARE ILLITERATE IN INDIA AND VILLAGES ARE NOT SERVED BY BANKING FACILITIES. IN SUCH SITUATION THE TRANSA CTIONS THROUGH THE BANKING CHANNEL ARE NOT PRACTICALLY POSSIBLE AND LE GISLATURE AFTER CONSIDERING THIS PRACTICAL DIFFICULTY, THE CLAUSES (F) AND (H) WERE INSERTED IN RULE 6DD. THE OBJECT OF PROVISIONS OF SECTION 40A IS TO CURB FLOW OF BLACK MONEY AND NOT TO PUT AN IMPEDIMENT OVER THE TRADE A ND BUSINESS. 10) PAYMENTS AFTER BANKING HOURS CASES COVERED UNDE R CLAUSE (K) NOW CLAUSE (J) OF RULE 6DD. IN ALL THE CASES, THE PAYMENTS HAVE TO BE MADE AFTE R THE BANKING HOURS. AT THE TIME OF MAKING THE PAYMENTS, THE BAN KS WERE CLOSED. THE TIME OF PAYMENT IS MARKED ON ALL THE PAYMENT VOUCHE RS. FOR EXAMPLE SEE PB PAGE 97, TIME OF PAYMENT IS 10.30 PM; PB PAGE 10 8 TIME OF PAYMENT 8.30PM AND SO ON. THE REASON OF THIS THAT IN MOST OF THE CASES THE UNDIVIDED LAND IS OWNED JOINTLY BY SEVERAL FAMILY M EMBERS, AND THESE FARMERS DO NOT COME TO THE OFFICE OF THE ASSESSEE F OR SALE OF THE LAND BUT THE REPRESENTATIVE OF THE ASSESSEE GOES TO THE PLAC E OF THE FARMERS. THEREFORE THE NEGOTIATION IS REQUIRED TO BE MADE IN JOINT MEETING OF THE OWNERS OF THE LANDS AND SUCH NEGOTIATIONS/MEETINGS ARE POSSIBLE ONLY AT THE RESIDENCE OF THE OWNERS AND IN EVENING WHEN ALL THE CO-OWNERS (FARMERS) COME BACK TO THEIR RESIDENCE FROM THEIR F ARMS OR WORK PLACE. UNDER THESE CIRCUMSTANCES THE ASSESSEE HAD TO MAKE THE PAYMENTS IN EVENING AND AT THAT TIME NO BANKS ARE OPENED EVEN I N NEARBY TOWNS AND IN 16 THESE CIRCUMSTANCES THE ASSESSEE COULD NOT PREPARE DD AND IT HAS TO MAKE THE PAYMENT IN CASH OTHERWISE THE PURCHASES OF THE LAND WAS NOT POSSIBLE FROM THESE FARMERS. 11) LEGISLATURE INTENDED NOT TO MAKE THE PROVISION OF S. 40A(3)D VERY STRICT AND ABSOLUTELY MANDATORY. JURISDICTIONAL HIGH COURT IN THE CASE OF KANTI LAL PURSHOTTAM & CO. VS. COMMISSIONER OF INCOME TAX, 155 ITR 519 (RA J.) HELD THAT INCOME-TAX IS A TAX ON THE REAL INCOME AND THE PURP OSE OF INTRODUCING S. 40A(3) WAS TO BLOCK THE LOOPHOLES OF MAKING CASH PA YMENT AND CLAIM AS DEDUCTIONS WITH A VIEW TO FRUSTRATE INVESTIGATION A S TO THE IDENTITY OF THE RECIPIENTS AND THE GENUINENESS OF THE CLAIM. PROVIS O TO S. 40A(3) SHOWS THAT THE LEGISLATURE INTENDED NOT TO MAKE THE PROVI SION OF S. 40A(3) VERY STRICT AND ABSOLUTELY MANDATORY. THE RIGOUR OF THE WHOLE RESTRICTION WAS LOOSENED BY THE PROVISO AND BY MAKING R. 6DD. THEREFORE THE PROVISO AND RULE 6SDD BOTH SHOULD BE CONSIDERING FOR GIVING RELAXATION FROM THE RIGOUR OF SECTION 40 A(3). THE SECOND PROVISO TO SECTION 40A(3) IS AS UNDER :- PROVIDED FURTHER THAT NO DISALLOWANCE UNDER THIS SU B-SECTION SHALL BE MADE WHERE ANY PAYMENT IN A SUM EXCEEDING (TWENT Y THOUSAND) RUPEES IS MADE OTHERWISE THAN BY CROSSED CHEQUE DRA WN ON A BANK OR BY CROSSED BANK DRAFT IN SUCH CASES AND UNDER SU CH CIRCUMSTANCES AS MAY BE PRESCRIBED, HAVING REGARD T O THE NATURE AND EXTENT OF BANKING FACILITIES AVAILABLE, CONSIDE RATIONS OF BUSINESS EXPEDIENCY AND OTHER RELEVANT FACTORS. THUS, THE SECOND PROVISO TO SECTION 40A(3) EMPHASIZ ES HAVING REGARD TO THE NATURE AND EXTEND OF BANKING FACILITI ES AVAILABLE, CONSIDERATION OF BUSINESS EXPEDIENCY AND OTHER RELE VANT FACTORS. THEREFORE, THE INTENTION OF THE LAW IS TO GIVE PROP ER WEIGHTAGE TO AVAILABILITY OF BANKING FACILITIES, BUSINESS EXPEDI ENCY AND OTHER RELEVANT FACTORS. THE AO SHOULD HAVE CONSIDER THE APPLICABI LITY OF RULE 6DD AFTER CONSIDERING THE OTHER FACTORS ALSO LIKE AVAILABILIT Y OF BANKING FACILITIES, AND BUSINESS EXPEDIENCY. 17 FURTHER, THE RELIANCE IS ALSO PLACED ON THE FOLL OWING DECISIONS :- (I) THE APPELLANT FURTHER SEEKS TO PLACE RELIANCE O N THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF GIRDHARI LAL GOENKA VS. COMMISSIONER OF INCOME TAX, REPORTED IN 179 ITR 122 , WHEREIN THEIR LORDSHIPS HELD AS UNDER : THE INCOME TAX OFFICER HAS TO TAKE A PRAGMATIC VI EW OF THE MATTER. THE INCOME TAX OFFICER SHOULD TAKE A PRACT ICAL APPROACH TO PROBLEM AND STRIKE A BALANCE BETWEEN THE DIRECTI ON OF LAW AND HARDSHIP TO THE ASSESSEE. HE SHOULD NOT ENMESH HIM SELF IN TECHNICALITIES. AFTER ALL, THE OBJECT IS NOT TO DEP RIVE THE ASSESSEE OF THE DEDUCTION WHICH HE IS OTHERWISE ENTITLED TO CLA IM WHERE THE AMOUNT WAS PAID IN CASH OR RECEIVED IN CASH. THE AS SESSING OFFICER HAS TO FIND OUT WHETHER THE TRANSACTION IS GENUINE OR NOT AND IF HE FINDS THAT THE TRANSACTION IS GENUINE, HE SHOULD ALLOW THE DEDUCTION, THE CIRCULAR OF THE BOARD IS NOT EXHAUST IVE; IT IS ONLY ILLUSTRATIVE AND THE ASSESSING OFFICER HAS TO TAKE INTO ACCOUNT THE SURROUNDING CIRCUMSTANCES, CONSIDERATIONS OF BUSINE SS EXPEDIENCY AND THE FACTS OF EACH PARTICULAR CASE IN EXERCISING HIS DISCRETION EITHER IN FAVOUR OR AGAINST THE ASSESSEE. THERE BE AN ORAL AGREEMENT BETWEEN THE ASSESSEE AND THE SELLER FOR P AYMENT IN CASH, SELLER MAY NOT BE WILLING TO ACCEPT CHEQUES : CASH PAYMENT MAY BE MADE AT THE REQUEST OF THE PAYEE WHO IS ALSO AN ASS ESSEE AND A CERTIFICATE TO THAT EFFECT FILED; ABSENCE OF BANKIN G FACILITIES IN PLACES WHERE CASH PAYMENTS ARE MADE. ALL SUCH CASE S WOULD COME WITHIN THE PURVIEW OF EXCEPTIONAL OR UNAVOIDABLE CI RCUMSTANCES. (II) MADRAS HIGH COURT DECISION IN THE CASE OF CIT V. K.K. S.K. LEATHER PROCESSOR P. (292 ITR 669) (RELATES TO AY 2 001-02 AFTER THE AMENDMENT OF LAW). EXCEPTIONAL OR UNAVOIDABLE CIRC UMSTANCES- TRIBUNAL FOUND THAT CASH PAYMENTS WERE MADE TO SMALL TIME VE NDORS WHO COME FROM SURROUNDING VILLAGES TO SELL SKIN TO THE ASSES SEE, A LEATHER PRODUCER, 18 AND THAT CASH PAYMENTS WERE INDISPENSABLE DISALLO WANCE RIGHTLY DELETED CIT VS. CHROME LEATHER COMPANY (P) LTD.(1999) 235 ITR 708 (MAD) FOLLOWED. (III) MADRAS HIGH COURT DECISION IN THE CASE OF CIT V. CHROME LEATHER CO. PVT. LTD., 235 ITR 708 : HELD THAT PAYMENT BY C ROSSED CHEQUE WAS NOT PRACTICABLE AND THAT IDENTITY OF PAYEE AND GENUINEN ESS OF PAYMENT WERE ESTABLISHED AMOUNT PAID IN CASH COULD NOT BE DISA LLOWED U/S 40A(3). (IV) GUJARAT HIGH COURT DECISION IN THE CASE OF CIT V. P. PRAVIN AND CO. 274 ITR 534 : HELD THAT THE REQUIREMENT UNDER R ULE 6DD OF THE INCOME-TAX RULES 1962, REGARDING PRACTICABILITY OF PAYMENT OTHERWISE THAN IN CASH AND CONSIDERATION OF BUSINESS EXPEDIEN CY HAS TO BE JUDGED FROM THE POINT OF VIEW OF THE BUSINESSMAN AND NOT O F THE REVENUE AUTHORITIES. (V) IN THE CASE OF JOINT COMMISSIONER OF INCOME TAX VS. SWARUP VEGETABLE PRODUCTS INDUSTRIES LTD. (2005) 96 ITD 46 8 (DEL.) HONBLE ITAT DELHI G BENCH HELD THAT FACTORY LOCATED IN A VILLAGE WHERE ASSESSEE HAS NOT MAINTAINED ANY BANK ACCOUNT CONST ITUTED EXCEPTIONAL CIRCUMSTANCES. (VI) IN THE CASE OF ASSISTANT COMMISSIONER OF INCOM E TAX VS. GOPALDAS VALLABHDAS (1997) 59 TTJ (IND) 768 HONBLE ITAT IND ORE BENCH HELD THAT ASSESSEE PURCHASED OLD GOLD ARTICLES FROM VILLAGERS WHO NEEDED IMMEDIATE CASH PAYMENT CONSTITUTED UNAVOIDABLE CIRCUMSTANCES. (VII) IN THE CASE OF UNITED WHEELS PVT. LIMITED VS. INSPECTING ASSISTANT COMMISSIONER OF INCOME TAX (1994) 50 TTJH (DEL.)635 , HONBLE DELHI E BENCH HELD THAT PAYMENTS MADE TO ILLITERATE LAB OURERS OF RURAL AREAS WHO DO NOT HAVE BANK ACCOUNT COME UNDER EXCEPTIONAL CIRCUMSTANCES AND ARE NOT DISALLOWABLE UNDER S. 40A(3). (VIII) IN THE CASE OF PATEL BROS & CO. LTD. VS. ITO 17 ITD (AHD) 126 HONBLE ITAT AHMEDABAD BENCH HELD THAT CASH PAYMENT MADE IN VILLAGES, PAYEES ARE IDENTIFIABLE AND GENUINENESS O F TRANSACTION IS NOT DOUBTED ARE NOT DISALLOWABLE UNDER S. 40A(3). 19 (IV) HONBLE ITAT JAIPUR BENCH IN ITS RECENT DECISI ON IN THE CASE OF PACL INDIA LTD. VS. ACIT CIRCLE-3, JAIPUR IN ITA NO . 944/JP/07 VIDE ORDER DATED 12.03.2010 HAS DELETED THE ADDITION MAD E BY THE AO BY APPLYING THE PROVISIONS OF SECTION 40A(3) BY CONSID ERING THE SECOND PROVISO TO SECTION 40A(3) OF INCOME TAX ACT. (X) FURTHER IN THE CASE OF ATTAR SINGH GURUMUKH SIN GH ETC. VS. INCOME TAX OFFICER (1991) 191 ITR 667 (SC) HONBLE APEX CO URT HAS OBSERVED THE FOLLOWING :- IT WILL BE CLEAR THAT THE PROVISIONS ARE NOT IN TENDED TO RESTRICT THE BUSINESS ACTIVITIES. THERE IS NO RESTRICTION ON THE ASSESSEE IN HIS TRADING ACTIVITIES. SEC. 40A(3) ONLY EMPOWERS THE A SSESSING OFFICER TO DISALLOW THE DEDUCTION CLAIMED AS EXPEND ITURE IN RESPECT OF WHICH PAYMENT IS NOT MADE BY CROSSED CHEQUE OR C ROSSED BANK DRAFT. THE PAYMENT BY CROSSED CHEQUE OR CROSSED BAN K DRAFT IS INSISTED ON TO ENABLE THE ASSESSING AUTHORITY TO AS CERTAIN WHETHER THE PAYMENT WAS GENUINE OR WHETHER IT WAS OUT OF TH E INCOME FROM UNDISCLOSED SOURCES. THE TERMS OF S. 40A(3) ARE NOT ABSOLUTE. CONSIDERATIONS OF BUSINESS EXPEDIENCY AND OTHER REL EVANT FACTORS ARE NOT EXCLUDED. GENUINE AND BONA FIDE TRANSACTION S 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 CI RCUMSTANCES UNDER WHICH THE PAYMENT IN THE MANNER PRESCRIBED IN S. 40 A(3) WAS NOT PRACTICABLE OR WOULD HAVE CAUSED GENUINE DIFFICULTY TO THE PAYEE. IT IS ALSO OPEN TO THE ASSESSEE TO IDENTITY THE PERSON WHO HAS RECEIVED THE CASH PAYMENT. RULE 6DD PROVIDES THAT AN ASSESS EE CAN BE EXEMPTED FROM THE REQUIREMENT OF PAYMENT BY A CROSS ED CHEQUE OR CROSSED BANK DRAFT IN THE CIRCUMSTANCES SPECIFIED U NDER THE RULE. IT WILL BE CLEAR FROM THE PROVISIONS OF S. 40A(3) AND R. 6DD THAT THEY ARE INTENDED TO REGULATE BUSINESS TRANSACTIONS AND TO PREVENT THE USE OF UNACCOUNTED MONEY OR REDUCE THE CHANCES TO U SE BLACK 20 MONEY FOR BUSINESS TRANSACTIONS. (SEE MUDIAM OIL CO . VS. ITO (1973) 92 ITR 519 (AP) : TC18R.450). 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 CLAI MED, WHETHER THE PAYMENT WAS GENUINE AND WHETHER IT WAS OUT OF THE I NCOME FROM DISCLOSED SOURCES. IN INTERPRETING A TAXING STATUTE , THE COURT CANNOT BE OBLIVIOUS OF THE PROLIFERATION OF BLACK MONEY WH ICH IS UNDER CIRCULATION IN OUR COUNTRY. ANY RESTRAINT INTENDED TO CURB THE CHANCES AND OPPORTUNITIES TO USE OR CREATE BLACK MO NEY SHOULD NOT BE REGARDED AS CURTAILING THE FREEDOM OF TRADE OR B USINESS. IN VIEW OF THE ABOVE SUBMISSION, THE HUMBLE ASSESSE E PRAYS YOUR HONOUR KINDLY TO DELETE THE ADDITION MADE BY T HE AO BY APPLYING PROVISIONS OF SECTION 40A(3) OF INCOME TAX ACT. 14. AS STATED ABOVE, SIMILAR SUBMISSIONS HAVE BEEN FILED FOR A.Y. 2007-08. AFTER GOING THROUGH THE ABOVE WRITTEN SUBMISSIONS AND PER USING OTHER MATERIAL ON RECORD, WE WOULD LIKE TO GO THROUGH THE CLAUSES OF RULE 6DD WH EREIN IT HAS BEEN STATED THAT IN VIEW OF THESE CLAUSES NO DISALLOWANCE CAN BE MADE. RULE 6DD PROVIDES AS UNDER :- 6DD. NO DISALLOWANCE UNDER SUB-SECTION (3) OF SEC TION 40A SHALL BE MADE AND NO PAYMENT SHALL BE DEEMED TO BE THE PR OFITS AND GAINS OF BUSINESS OR PROFESSION UNDER SUB SECTI ON (3) OF SECTION 40A WHERE A PAYMENT OR AGGREGATE OF PAYMENT S MADE TO A PERSON IN A DAY, OTHERWISE THAN BY AN ACC OUNT PAYEE CHEQUE DRAWN ON A BANK OR ACCOUNT PAYEE BANK DRAFT, EXCEEDS TWENTY THOUSAND RUPEES IN THE CASES AND CIRCUMSTANCES SPECIFIED HEREUNDER, NAMELY :- (A) XXXXXX XXXXXX (B) XXXXXX XXXXXX (C) XXXXXX XXXXXX (D) XXXXXX XXXXXX 21 (E) WHERE THE PAYMENT IS MADE FOR THE PURPOSES OF - (I) AGRICULTURAL OR FOREST PRODUCE ; OR (II) THE PRODUCE OF ANIMAL HUSBANDRY (INCLUDING LIVESTOCK, MEAT, HIDES AND SKINS) OR DAIRY OR POULT RY FARMING; OR (III) FISH OR FISH PRODUCTS, OR (IV) THE PRODUCTS OF HORTICULTURE OR APICULTURE, TO THE CULTIVATOR, GROWER OR PRODUCER OF SUCH ARTICLES, PRODUCE OR PRODUCTS ; (F) XXXXXX XXXXXX (G) WHERE THE PAYMENT IS MADE IN A VILLAGE OR TOWN, WHI CH ON THE DATE OF SUCH PAYMENT IS NOT SERVED BY ANY BA NK, TO ANY PERSON WHO ORDINARILY RESIDES, OR IS CARRYIN G ON ANY BUSINESS, PROFESSION OR VOCATION, IN ANY SUCH VILLAGE OR TOWN ; (H) XXXXXX XXXXXX (I) XXXXXX XXXXXX (J) WHERE THE PAYMENT WAS REQUIRED TO BE MADE ON A DAY ON WHICH THE BANKS WERE CLOSED EITHER ON ACCOUNT OF HOLIDAY OR STRIKE ; (K) WHERE THE PAYMENT IS MADE BY ANY PERSON TO HIS AGEN T WHO IS REQUIRED TO MAKE PAYMENT IN CASH FOR GOODS O R SERVICES ON BEHALF OF SUCH PERSON. 14.1. SUB CLAUSE (E) OF RULE 6DD IS ABOUT THE PAYME NT MADE FOR PURCHASE OF AGRICULTURAL OR FOREST PRODUCE. THE ASSESSEE HAS N OT PURCHASED ANY AGRICULTURAL OR FOREST PRODUCE, THEREFORE THIS SUB CLAUSE DOES NOT HELP TH E ASSESSEE. 14.2. SUB CLAUSE (K) IS RELEVANT FOR THE PAYMENT MA DE THROUGH ANY AGENT. IT IS CLAIMED ON BEHALF OF THE ASSESSEE THAT THE P AYMENT HAS BEEN MADE BY THE MANAGING DIRECTOR SHRI GYAN CHAND AGARWAL, HOWEVER, NO EVIDENCE WHATSOEVER HAS 22 BEEN FILED THAT SHRI GYAN CHAND AGARWAL WAS APPOINT ED AS AGENT FOR MAKING PURCHASES ON BEHALF OF THE COMPANY. THEREFORE, THE EXPLANATIO N OF THE ASSESSEE, IN OUR VIEW, WAS RIGHTLY REJECTED BY AO AND LD. CIT (A). 14.3. SUB CLAUSE (G) IS ABOUT THE PAYMENT MADE IN A VILLAGE OR IN A TOWN WHICH ON THE DATE OF SUCH PAYMENT IS NOT SERVED BY ANY BANK AND 14.4. SUB CLAUSE (J) IS IN RESPECT TO THE PAYMENT M ADE ON A DAY ON WHICH THE BANK WAS CLOSED EITHER ON ACCOUNT OF HOLIDAY OR STRIKE. 14.5. THESE TWO CLAUSES MAY BE HELPFUL TO THE ASSES SEE AS THE CASE OF THE ASSESSEE IS THAT THE PURCHASES WERE MADE FROM THE PERSONS WHO RESIDE S IN THE VILLAGES WHERE ON THE DATE OF PAYMENT THE VILLAGE WAS NOT SERVED BY ANY BANKIN G FACILITY AND IN SOME CASES THE PAYMENTS HAVE BEEN MADE AFTER BANKING HOURS TO THE VILLAGERS AND IN SUPPORT OF THIS CONTENTION IT WAS SUBMITTED THAT THE TIME OF PAYMEN T HAS BEEN MENTIONED ON THE PAYMENT VOUCHER ITSELF. THE AO AND LD. CIT (A) HAS REJECTE D THE CONTENTION OF THE ASSESSEE THAT THEY HAVE NOT FILED ANY SUPPORTING EVIDENCE. IN OU R VIEW, THE OBSERVATIONS OF AO AS WELL AS OF LD. CIT (A) IN THIS RESPECT ARE NOT CORRECT. IT IS SEEN THAT ALL THE PURCHASES WERE MADE FROM THE PERSONS WHO WERE RESIDING IN VILLAGES . THE LIST OF FARMERS OR PERSONS ARE MENTIONED IN THE WRITTEN SUBMISSIONS WHICH ARE TABU LATED SOMEWHERE ABOVE IN THIS ORDER. THE NAMES OF VILLAGES ARE ALSO MENTIONED. THE AMOUN T OF PAYMENT IS ALSO MENTIONED AND IT HAS BEEN CATEGORICALLY MENTIONED THAT IN THESE V ILLAGES THERE IS NO BANKING FACILITY. NOWHERE FROM THE ORDERS OF AO AND LD. CIT (A), IT E MERGES THAT THEY HAVE MADE ANY ENQUIRY THAT IN THESE VILLAGES HAVE ANY BANKING FAC ILITIES OR NOT. WE HAVE SEEN THE VOUCHERS AT PAGES 97 TO 108. AT PAGE 97, A CASH RE CEIPT OF RS. 5,00,000/- IS PLACED AND TIME OF PAYMENT HAS BEEN MENTIONED AT 10.30 P.M. S IMILARLY AT PAGE 98 CASH PAYMENT OF 23 RS. 5,00,000/- HAS BEEN MENTIONED AND TIME IS MENTI ONED AT 10.30 P.M. AT PAGE 99, A CASH RECEIPT OF RS. 2,26,000/- IS PLACED AND TIME O F PAYMENT IS MENTIONED AT 11.30 P.M. 14.6. IT IS FURTHER SEEN THAT IN CASE OF ONLY ONE P ERSON I.E. SHYORAM MENTIONED AT SL. NO. 3 OF THE LIST OF FARMERS, A CHEQUE DATED 8.12.2004 WAS GIVEN. THIS VILLAGER WAS HAVING A BANK ACCOUNT IN NEARBY TOWN WHERE HE DEPOSITED THE CHEQUE. HOWEVER, ON ACCOUNT OF INSUFFICIENT FUND THE CHEQUE WAS DISHONOURED. AGAI N CHEQUE WAS GIVEN ON 15.4.2005 WAS ALSO DISHONOURED AND THEREAFTER CHEQUE DATED 25 .4.2005 WAS ALSO DISHONOURED. IN THESE CIRCUMSTANCES THE VILLAGER SHRI SHYORAM LOST HIS TRUST AND REFUSED TO ACCEPT THE CHEQUE AND INSISTED THAT THE PAYMENT BE MADE IN CAS H OTHERWISE THE AGREEMENT WOULD BE CANCELLED. IN THESE CIRCUMSTANCES, THE PAYMENT WAS MADE IN CASH TO THIS PERSON AND IN OUR VIEW THERE WAS A REASONABLE CAUSE FOR MAKING PA YMENT IN CASH IN SUCH CIRCUMSTANCES. 14.7. WE FURTHER ARE OF THE VIEW THAT MANY PERSONS IN THESE DAYS ARE INDULGING IN DEVELOPMENT OF SCHEMES AND THEY ARE BUYING LAND IN NEARBY VILLAGES WHERE THERE IS A SCOPE OF DEVELOPING THE SCHEMES AND THEY ARE FORCED TO MAKE CASH PAYMENT BECAUSE THERE IS A COMPETITION IN THE MARKET FOR BUYING AGRICULTU RAL LAND. THEREFORE, ASSESSEE APPROACHED THE VILLAGERS IN THE EVENING OR IN THE N IGHT WHEN THEY ARE AVAILABLE AND THEY ENTERED INTO AGREEMENT VERBALLY OR IN WRITING AND S OME PAYMENTS MADE IN CASH. THEREFORE, IN OUR VIEW THERE WAS AN EXCEPTIONAL CIR CUMSTANCE IN MAKING CASH PAYMENTS WHICH FALLS UNDER THE EXCEPTIONAL CLAUSE OF RULE 6D D OF IT RULES. 14.8. IT IS ALSO NOTED THAT THE PAYMENTS TO SOME VI LLAGERS HAVE BEEN MADE AFTER BANKING HOURS AND IN CASH VOUCHER ITSELF THE TIME OF PAYMEN T HAS BEEN MENTIONED. SOME OF THE EXAMPLES HAVE BEEN GIVEN SOMEWHERE ABOVE IN THIS OR DER WHERE TIME OF PAYMENT HAS BEEN NOTED. THEREFORE, IN OUR VIEW THE AO AND LD. CIT (A) WERE NOT CORRECT IN OBSERVING 24 THAT NO SUPPORTING EVIDENCE WAS FILED THAT THE PAYM ENTS WERE MADE AFTER BANKING HOURS. NEITHER ANY PERSON WAS CALLED NOR ENQUIRY WAS MADE THAT THE PAYMENTS WERE MADE AFTER BANKING HOURS OR THEY RESIDED IN THE VILLAGES. 14.9. THE PROVISIONS OF SECTION 40A(3) ARE VERY STR INGENT AND, THEREFORE, IT WAS THE DUTY OF THE AO THAT BEFORE ATTRACTING STRINGENT PROVISIO N HE SHOULD HAVE MADE ENQUIRY ABOUT THE PERSONS WHETHER THEY LIVE IN THE VILLAGES OR NO T AND WHETHER PAYMENTS HAVE BEEN MADE AFTER BANKING HOURS OR NOT. THERE IS NO DISPU TE THAT PAYMENTS HAVE BEEN MADE FROM DISCLOSED SOURCES AS ALL THE PAYMENTS HAVE BEEN ACC OUNTED FOR. THE PROVISIONS OF SECTION 40A(3) WAS BROUGHT ON STATUTE INITIALLY TO CURB THE PRACTICE OF INTRODUCING BLACK MONEY. HOWEVER, THE PROVISIONS OF SECTION 40A(3) SAYS THAT IF THE CASH PAYMENT EXCEEDS RS. 20,000/- AND THEY DO NOT FALL UNDER THE EXCEPTIONAL CLAUSE OF RULE 6DD, THEN ADDITION @ 20% OF SUCH CASH PAYMENT HAS TO BE MADE. HOWEVER, THE BACKGROUND OF THE CASE HAS TO BE SEEN AND IT SHOULD BE ENQUIRED WHETHER THERE IS ANY REAL DIFFICULTY WITH THE ASSESSEE TO MAKE PAYMENT IN CASH. IN THE PRESENT CASE IT IS SE EN THAT ASSESSEE WAS FORCED TO MAKE CASH PAYMENT AS AGRICULTURISTS WERE NOT READY TO AC CEPT THE CHEQUES AS MANY OTHER PURCHASERS WERE AVAILABLE IN THE MARKET AND WILLING TO PAY IN CASH. BEING A PRUDENT BUSINESSMAN, THE ASSESSEE THOUGHT IT PROPER TO MAKE CASH PAYMENT SO THAT THEIR AGREEMENT OF PURCHASE OF LAND MAY NOT BE CANCELLED OR AGRICUL TURISTS MAY REFUSE TO SELL THE LAND TO ASSESSEE THE NEXT DAY. IN VIEW OF THESE FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT CASE OF THE ASSESSEE FALLS UNDER THE EXCEPTIONAL CL AUSE OF RULE 6DD OF IT RULES. 14.10. IN CASE OF RISHABHDEV TOWNSHIP & DEVELOPERS P. LTD. DECIDED IN ITA NO. 181/JP/2010 FOR ASSESSMENT YEAR 2006-07 VIDE ORDER DATED 29.4.2011 SIMILAR VIEW HAS BEEN TAKEN IN FAVOUR OF THE ASSESSEE. IN THIS CASE ALSO A PAYMENT OF RS. 84,25,000/- WAS 25 MADE IN CASH AND IN VIEW OF PROVISIONS OF SECTION 4 0A(3) THE ADDITION OF RS. 16,85,000/- WAS MADE. HOWEVER, THE LD. CIT (A) DELETED THE ADDI TION BY OBSERVING THAT THE PAYMENTS WERE MADE TO THE VILLAGERS. THE DEPARTMENT PREFER RED APPEAL BEFORE TRIBUNAL. THE TRIBUNAL HELD THAT THE LD. CIT (A) WAS RIGHT IN DEL ETING THE DISALLOWANCE. FINDING OF THE TRIBUNAL HAS BEEN RECORDED IN PARA 7 AT PAGES 3 & 4 OF ITS ORDER WHICH ARE AS UNDER :- 7. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A). THE DEPARTMENT IS IN APPEAL AND IF THEY WANT TO VERIFY WHETHER THE RE IS A BRANCH IN VILLAGE BALLUPURA OR NOT CAN BE VERIFIED AT ANY POINT OF TI ME WHICH THEY HAVE NOT DONE. IT WILL BE JUST FUTILE EXERCISE IN SENDING T HE MATTER BACK TO THE FILE OF AO TO JUST SATISFY HIMSELF BY GIVING HIM OPPORTUNIT Y. THE EXCEPTION PROVIDED UNDER RULE 6DD(G) IS VERY CLEAR BY IT IS P ROVIDED THAT WHERE THE PAYMENT IS MADE IN A VILLAGE OR TOWN, WHICH ON THE DATE OF SUCH PAYMENT IS NOT SERVED BY ANY BANK, TO ANY PERSON WHO ORDINA RILY RESIDES, OR IS CARRYING ON ANY BUSINESS, PROFESSION OR VOCATION, I N ANY SUCH VILLAGE OR TOWN, THEN NO DISALLOWANCE CAN BE MADE UNDER SECTIO N 40A(3). IN FACT, THE LD. CIT (A) HAS MENTIONED SUB CLAUSE (H) WHEREAS TH E CORRECT CLAUSE IS 6DD(G). THE LD. COUNSEL OF THE ASSESSEE HAS MADE S TATEMENT AT BAR THAT THERE IS NO BANK BRANCH IN VILLAGE BALLUPURA AT THE TIME OF PURCHASE OF THE LAND FROM VARIOUS SELLERS. IT WAS ALSO SUBMITTED B Y LD. A/R THAT NORMALLY THE VILLAGERS PAID IN CASH AT THE TIME OF ENTERING INTO AGREEMENT AND SALE DEED IS COMPLETED AT A LATER STAGE WHEREIN THEY HAV E AGREED TO RECEIVE THE AMOUNT FROM THE ASSESSEE EITHER IN CASH OR CHEQUE A S THE CASE MAY BE. THIS CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE REMAINED UNCONTROVERTED, THEREFORE, WE SEE NO REASON TO INTE RFERE WITH THE FINDING OF LD. CIT (A) AND HELD THAT LD. CIT (A) WAS RIGHT IN DELETING THE DISALLOWANCE MADE BY AO UNDER SECTION 40A(3). 26 15. FACTS IN THE PRESENT CASE FOR BOTH THE YEARS AR E SIMILAR. THEREFORE, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE CO NSISTENCY AS ON SIMILAR FACTS THE TRIBUNAL HAS DELETED THE ADDITIONS MADE UNDER SECTI ON 40A(3), WE HOLD THAT LD. CIT (A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE A O IN MAKING ADDITION UNDER SECTION 40A(3) FOR BOTH THE YEARS. ACCORDINGLY THE ENTIRE ADDITIONS FOR BOTH THE YEARS ARE DELETED. 16. IN THE RESULT, APPEAL FOR ASSESSMENT YEAR 2006- 07 IS ALLOWED IN PART AND APPEAL FOR ASSESSMENT YEAR 2007-08 IS ALLOWED. 17. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 21 .10.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- SHREE SALASAR OVERSEAS PVT. LTD., JAIPUR. THE DCIT, CIRCLE-2, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 56(2)/JP/2010) BY ORDER, AR ITAT JAIPUR.