Law:

Section:

Section 40A(3), read with section 256, of the Income-tax Act, 1961 - Business disallowance - Cash payment exceeding prescribed limits - Whether it is up to assessee to furnish to satisfaction of Assessing Officer circumstances under which payment in manner prescribed in section 40A(3) is not practicable or would have caused genuine difficulty to payee - Held, yes - Whether, therefore, conclusion arrived at on that question is a question of fact which cannot be interfered with under section 256 - Held, yes CASES REFERRED TO CIT v. Nikko Auto Ltd. [2002] 256 ITR 476/ 122 Taxman 874 (Punj. & Har.) [Para 1] and Attar Singh Gurmukh Singh v. ITO [1991] 191 ITR 677/ 59 Taxman 11 (SC) [Para 2]. Sanjeev Khanna for the Appellant. ORDER 1. Counsel for the Revenue submits that the Tribunal has seriously erred in observing: In the case of CIT v. Nikko Auto Ltd. [2002] 256 ITR 4761 (Punj. & Har.), that acceptance of payment by account payee cheque or account payee draft would be hazardous and cumbersome procedure and, therefore, the case of the assessee was fully covered by the exceptions provided under section 40A(3) read with rule 6DD(j) and the Boards circular. 2. We may note that we are not of the view that obtaining a cheque or a bank draft is hazardous…

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