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Commissioner of Income Tax Vs. Ajmer Singh Mohinder Singh. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtPunjab and Haryana High Court
Decided On
Case NumberI.T. Ref. No. 91 of 1974
Reported in(1979)12CTR(P& H)104
AppellantCommissioner of Income Tax
RespondentAjmer Singh Mohinder Singh.
Cases ReferredLudhiana v. The
Excerpt:
- sections 80 (2) & 89 & punjab motor vehicles rules, 1989, rules 85 & 80: [t.s. thakur, cj, jasbir singh & surya kant, jj] appeal against orders of state or regional transport authority imitation held, a stipulation regarding the period of limitation available for invoking the remedy shall have to be strictly construed. that is because any provision by way of limitation is in the nature of a restraint on the remedy provided under the act. so viewed two inferences are clear viz., (1) sections 80 and 89 of the act read with rule 85 of the rules make it obligatory for the authorities making the order to communicate it to the applicant concerned and (2) the period of limitation for any appeal against the order is reckonable from the date of such communication of the reasons would imply..........tribunal was right in law in holding that the word expenditure used in s. 40a(3) does not cover expenditure on purchases of goods ?'briefly the facts are that the assessee is carrying on business as kacha artia and is dealing in agricultural produce. for the assessment year 1970-71, the accounting year is the financial year 1969-70. the assessee filed a return of income declaring income of rs. 20,377/-. while making the assessment, the income-tax officer noticed that the assessee had made the following payments in cash for purchases :-11.6.1969purchase ofrs. 2529/- paid to wheat m/s. ganga ram nathu ram, mukastar17.6.1969purchase ofrs. 4149/84 paid grams to m/s. johri lal dip chand, mukastar8.12.1969purchase ofrs. 6,000/- paid to narma. m/s. fateh chand ram chand, jallalabadas the.....
Judgment:

- R. N. Mittal, J. - The Income-tax Appellate Tribunal (Chandigarh Bench) referred the following question u/s 256(1) of the Income-tax Act, 1961 (hereinafter to be referred to as the Act), to this Court : - 'Whether, on the Tribunal was right in law in holding that the word expenditure used in s. 40A(3) does not cover expenditure on purchases of goods ?'

Briefly the facts are that the assessee is carrying on business as Kacha Artia and is dealing in agricultural produce. For the assessment year 1970-71, the accounting year is the financial year 1969-70. The assessee filed a return of income declaring income of Rs. 20,377/-. While making the assessment, the Income-tax Officer noticed that the assessee had made the following payments in cash for purchases :-

11.6.1969

Purchase of

Rs. 2529/- paid to wheat M/s. Ganga Ram Nathu Ram, Mukastar

17.6.1969

Purchase of

Rs. 4149/84 paid Grams to M/s. Johri Lal Dip Chand, Mukastar

8.12.1969

Purchase of

Rs. 6,000/- paid to Narma. M/s. Fateh Chand Ram Chand, Jallalabad

As the payments had not been made by crossed cheques or crossed bank drafts, as required by s. 40A(3) of the Act, the same required not allowed as a deduction. Consequently, he computed the total income as Rs. 33,430/-. The assessee had pleaded before the Income-tax Officer that the payments were genuine and had to be made on account of unavoidable circumstances as provided under sub-rule (j) of Rule 6DD of the Income-tax Rules, 1962. This contention was not accepted by the Income-tax Officer.

The assessee went up in appeal against the order of the Income-tax Officer to the Appellate Assistant Commissioner but the same was dismissed. It went up in second appeal before the Tribunal. It was argued before the Tribunal that the word expenditure used in s. 40A(3) did not include the payments made for purchases. The contention of the assessee was accepted and the order of the Appellate Assistant Commissioner was reversed by the Tribunal. At the instance of the Commissioner of Income-tax a reference has been made by the Tribunal for the question already mentioned above, to this Court.

It will be relevant to mention that while deciding the matter, the Tribunal relied on its own decision (M/s. Grewal Group of Industries, Ludhiana v. The ITO) decided on 29th September, 1973, wherein a similar question was raised. At the instance of the Commissioner of Income-tax a reference was made to this Court and the reference has been decided in CIT, Patiala-I v. Grewal Group of Industries. The question referred to in that case was the same which is in the present case. A learned Bench, of this Court held that the payments made for the purchase of the expressions 'expenditure' occurring in s. 40A(3) of the Act. Consequently, it was decided in favour of the Revenue. We are in agreement with the aforesaid view.

3. For the abovesaid reason, we decide the question in the negative i.e. in favour of the Revenue.

No order as to costs.


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