R. Gururajan, J.@mdashThe appellant is a partnership firm. It is engaged in the business of processing raw cashew nuts and selling them. The purchases of raw cashew nuts are made through its sister-concern namely M/s Abhiruchi Departmental Stores in Belgaum and thereafter in another premises the processing is carried on. The premises in which M/s Abhiruchi Departmental Stores carries on its business is located in a place in the city of Belgaum to which the growers of the cashew nuts normally come and sell their products. For the year 1992-93, the assessing authority added a sum of Rs. 16,05,000 by invoking the provisions of Section 40A(3) of the IT Act (for short, ''the Act''). These payments were issued to M/s Abhiruchi Departmental Stores. The assessing authority, noticing various cash payments contrary to the provisions of law, has chosen to proceed against the appellant. Aggrieved by the same, the appellant filed an unsuccessful appeal before the CIT(A). The order of the CIT(A) was subsequently confirmed by the Tribunal. In these circumstances, the assessee is therefore before us in this appeal.
2. Heard Sri M.G. Kotresh, learned Counsel for the assessee. He would argue that all the authorities are wrong in the case on hand in subjecting the petitioner for payment of tax in the peculiar facts and circumstances of the case. The learned Counsel has explained that the transactions are made through agriculturists and they demand only cash payment. The assessee was obliged to make cash payment. Even otherwise, he would say that these payments are shown in the books of account maintained by them. The learned Counsel for the assessee, therefore, says Rule 6 (sic-6DD) is available to the appellant-assesses on the facts and circumstances of the case. He wants our interference.
3. Per contra, Sri E.R. Indrakumar, learned Counsel for the Revenue, supports the order of the authorities.
4. After hearing, we have carefully perused the orders passed by each one of the authorities.
5. The assessing authority, during examination of books of account, has noticed that the assessee firm has paid huge amounts by way of cash to its sister-concern namely, M/s Abhiruchi Departmental Stores along with payment by way of self-cheques and crossed-cheques. The said sister-concern is a Kirana dealer also purchases raw cashew nuts from the growers and sells to the assessee. Both the firms are situated at Belgaum. Noticing huge cash transaction, proceedings were initiated. Reply was obtained. After noticing the statement and huge transaction running into several lakhs of rupees, the assessing authority on facts has chosen to hold that no acceptable reason is shown to the authorities in terms of Rule 6 (sic-6DD) of the Rules. In that view of the matter, the assessing authority passed an adverse order. The same was challenged before the appellate authority. The appellate authority noticed the material facts, including the statement made by the assessee in the case on hand. After noticing the factual aspects of the matter, the appellate authority has chosen to partly allow the appeal. When the same was challenged before the Tribunal, the Tribunal after referring to various aspects of the matter has chosen to say that Rule 6 (sic-6DD) is not available to the assessee. In the light of the argument, once again we have seen the order of the Tribunal.
6. From the material placed on record, we have seen that M/s Abhiruchi Departmental Stores is the sister-concern of the appellant-assesses and they are situated in Belgaum and both have bank accounts. Cheques were issued and cash payments were also made to the tune of Rs. 16 lakhs by the appellant in the case on hand. In the statement recorded by the Department, one Sri Vishwanath Krishna Mungi would say that he is the partner of the appellant firm so also in the M/s Abhiruchi Departmental Stores. Nearly 100 cashews were purchased in the year 1991-92 from the sister-concern. During the months of April and May, which is a cashew season, innumerable small and large cultivators bring their cashews for sale. He has further stated that cash payments were made but not exceeding Rs. 10,000. He has stated that with a view of early settlement, cash has been issued. If a cheque is issued, it takes time in terms of the statement. He has also stated in the event of no cash payment, they are likely to lose customers. This is all the explanation given before the authorities. This explanation to our mind in the light of the findings of the authorities, is not acceptable to us. Rule 6DD(j)(1) would provide exceptional or unavoidable circumstances. Rule 6DD(j)(2) would further provide that the payment by way of cheques was not practicable or it would cause genuine difficulty to the payee in terms of the material on record. None of the exceptional circumstances is available in the facts and circumstances of the case. All the authorities after noticing the facts have rightly come to the conclusion that the case of the appellant is to be rejected in the case on hand. We have no hesitation in accepting all the three orders of the authorities. The argument of non-consideration of the material on record or non-application of the mind is not acceptable to us. The order of the Tribunal should be read as a whole. The Tribunal after noticing various aspects of the matter, has categorically ruled that Rule 6DD is not available to the appellant. We are not inclined to accept the argument of the appellant. We do not find any legal errors in the orders passed by the authorities. The orders are based on facts. No question of law arises in the case on hand.
7. In these circumstances, we deem it proper to reject the appeal. Ordered accordingly. No costs.
