JUDGMENT
B.A. Khan, J.
1. The appellant claims to be a sub-broker and engaged in purchase and sale of shares and debentures, etc. He was found to have made some cash payments exceeding Rs. 10,000 to the tune of Rs. 5,10,921 in violation of the provisions of Section 40A(3) of the Income-tax Act read with Rule 6DD. Though he explained his position but the Income-tax Officer felt dissatisfied and ordered addition of Rs. 5,10,921 for the assessment year 1992-1993 by order dated October 4, 1993. He took appeal against this and the Appellate Commissioner by order dated July 6, 1994, directed its deletion holding :
“The circumstances under which cash payments have been made have been explained by the appellant. However, the parties are identified and there is no material on record to doubt about the genuineness of payments. Keeping in view the notification of the Board, as cited by the appellant and also the exceptions to Section 40A(3) as satisfied under Rule 6DD(j), the payments, if were made on consideration of business exigencies and exceptional circumstances, will not come under the purview of Section 40A(3). The addition of Rs. 5,10,921 is, therefore, deleted.”
2. The Revenue filed an appeal against this before the Income-tax Appellate Tribunal leading to passing of the impugned order dated November 27, 2000 keeping the addition intact. While doing so, the Tribunal referred to the clarifications issued by the Central Board of Direct Taxes in terms of Rule 6DD(j) read with Section 40A(3) and noted that no evidence or material was placed on record to show that the case fell within the exceptions contemplated by the Central Board of Direct Taxes clarifications.
4. All that remained to be seen was whether there was any evidence or material on record to suggest that the appellant’s case fell within the exceptions provided in the Central Board of Direct Taxes clarification to Rule 6DD(j). The relevant exception which the appellant claims to be applicable to this case provides :
“(v) The seller, acting as a commission agent, is required to pay cash in turn to persons from whom he has purchased goods.”
5. The appellant admittedly, is a sub-broker dealing in purchase and sale of shares. He explains that he was required to pay cash in several transactions in the peculiar nature of his business. He has reflected these in the cash book submitted to the Income-tax Officer. He has also provided letters from the concerned parties confirming the transactions. These parties were also identifiable and their letters of confirmation are also on record. Neither the transactions are disputed by the Revenue nor the identity of parties. In other words, the genuineness of these transactions is not doubted or called in question. Nor is it anybody’s case that any steps were taken by the Revenue to go into the genuineness or otherwise of these. Therefore, the Tribunal could not hold that there was no material or evidence on record to show that the appellant’s case was covered by the relevant exception. It seems that the Income-tax Appellate Tribunal had overlooked the relevant material on record to draw the conclusion and its finding was contrary to record to that extent.
6. The Income-tax Appellate Tribunal’s order resultantly becomes unsustainable and is set aside and that passed by the Appellate Commissioner is affirmed to allow this appeal.