COMMISSIONER OF INCOME TAX Vs. ALOO SUPPLY COMPANY

JUDGEMENT

(1.) AT the instance of the CIT, the Cuttack Bench of the Appellate Tribunal has stated this case and referred the following questions for the opinion of the court under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as " the Act ") :

(2.) ASSESSEE is a registered firm and deals on wholesale basis in potato and onion. It has also dealing on commission basis in those articles. The relevant assessment year is 1974-75 ending with March 31, 1974. In the course of assessment proceedings, the ITO found that the assessee had paid to the tune of Rs. 1,10,024 in cash to different persons and called upon him to show cause as to why these payments should not be disallowed as revenue expenditure in view of the contravention of Section 40A(3) of the Act. The assessee explained that payments were made in cash because of exceptional and unavoidable circumstances and the payment in any other manner was not practicable having regard to the nature of the transactions and so they came under the exception envisaged under Rule 6DD(j) of the Rules. The explanation was not accepted and the expenditure was disallowed.

(3.) I agree.