JUDGMENT
1. The appellant, Shri Radhika Prakashan (Raipur) Pvt. Limited, filed the return of income on December 31, 1990, declaring a loss of Rs. 1,90,240. The Assessing Officer found certain purchases on November 9, 1989 of Rs. 25,000, on November 22, 1989 of Rs. 15,000, on December 4, 1989 of Rs. 18,000, on December 11, 1989 of Rs. 25,000, on December 23, 1989, of Rs. 15,000 and on December 25, 1989 of Rs. 17,000. The Assessing Officer found that for the said purchases the payments were made in cash of sums exceeding Rs. 10,000 otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft. The Assessing Officer disallowed these expenditure and added the total sum of Rs. 1,16,000 to the disclosed income.
2. Before the Assessing Officer it was submitted that the payments were made a number of times in a day and as each transaction was below Rs. 10,000, the provision of Section 40A(3) was not attracted. However, this was not accepted by the Assessing Officer. The appellant also submitted that the case was covered under Rule 6DD(j) of the Income-tax Rules as there were exceptional and unavoidable circumstances in not making payment by a crossed cheque or by a crossed bank draft. This plea was also disallowed by the Assessing Officer. Further a sum of Rs. 1,50,000 was shown on credit and was allegedly advanced out of agricultural income. The Assessing Officer found that the nature and source of credit has not been explained satisfactorily and disallowed the credit and held the income to be from some undisclosed source. Aggrieved by the order of the Assessing Officer an appeal was taken before the Commissioner of Income-tax (Appeals). The appeal was partly allowed. Aggrieved by the order, an appeal was filed by the appellant before the Income-tax Appellate Tribunal on the ground that the addition of Rs. 1,16,000 under Section 40A(3) of the Income-tax Act is illegal.
3. Learned counsel for the appellant submits that in view of the circular dated May 31, 1977, due to exceptional or unavoidable circumstances or because payment in the manner aforesaid required under Section 40A was not practical or for genuine difficulty to the payee, the payments were so made. He also relied on the decision of this court in CIT v. Triveniprasad Pannalal [1997] 228 ITR 680 and the decision in CIT v. Aloo Supply Co, [1980] 121 ITR 680 (Orissa) and a decision of the Delhi High Court in CIT v. Stellar Investment Ltd. [1991] 192 ITR 287. It is further submitted that the addition of Rs. 1,50,000 out of the share capital is bad in law.
4. On the facts of the case, the Tribunal has recorded the finding that the assessee had failed to furnish any evidence in support of the explanation that the party had insisted on payment in cash and had expressed unwillingness to render services otherwise. It has also been found on the facts that no case of exceptional or unavoidable circumstances for making the payment in cash has been made out. The finding recorded is that the assessee had consciously split up the payments in several payments so that each payment does not exceed Rs. 10,000 only to circumvent the provisions of law. Under the circumstance, the addition has been confirmed.
5. The decision of this court in the case of CIT v. Triveniprasad Pannalal [1997] 228 ITR 680, is not applicable to the instant case. It has been held that if the amount paid in cash does not exceed the limit specified under Section 40A(3), Section 40A(3) did not apply, but, on the facts in the instant case the finding recorded by the Tribunal is otherwise. The transaction having not been found to be split. There is no material placed before us to show that the transactions were split (sic). Similarly the ratio of decision in CIT v. Aloo Supply Co. [1980] 121 ITR 680 (Orissa), has different factual matrix to operate.
6. With respect to addition of Rs. 1,50,000 it may be seen that the confirmation of the credit advanced by Ramesh Khandelwal was not filed even after notice. It has been found that the assessee had failed to discharge the onus and genuineness of the credit has not been found to be established. Both the questions raised are questions of facts based on appreciation of evidence and the findings are not shown to be perverse or such which could not be arrived at in a reasonable manner.
7. Thus, we find no merit in the present appeal. Same is dismissed in limine.
