COMMISSIONER OF INCOME TAX Vs. CHANDMULL RADHAKISHUN

JUDGEMENT

(1.) A statement of case under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), has been submitted by the Income-tax Appellate Tribunal, Patna Bench, referring the following questions of law for the opinion of this court :

(2.) THE facts of the case may be briefly stated as found in the statement of the case. THE assessee is a registered firm and the assessment year involved is 1970-71, for which the accounting period is from October 1, 1968, to September 16, 1969. During the year under reference, the assessee made payments amounting to Rs. 45,799 by cash on account of purchase of goods. Out of the amount of Rs. 45,799, payments to the extent of Rs. 35,682, were made in respect of purchases made prior to April 1, 1969. THE Income-tax Officer added the entire amount under Section 40A(3) of the Act since he found that the payments were for more than Rs. 2,500 at a time and were made otherwise than by crossed cheque or crossed bank draft. A copy of the order of the Income-tax Officer is annexed to the statement of the case and is marked as annexure-A.

(3.) IN the instant case before us, the genuineness of the payments and identity of the payees are not disputed. The only question which has to be considered is whether the payment was made in exceptional and unavoidable circumstances and that the payment by a crossed cheque drawn on a bank or by a crossed bank draft would have caused a genuine difficulty to the payee and the payment in that manner was not practicable.