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75. So far as the evidence and the identity of the payee were concerned, it had not been doubted that the payments had been made to keep a harmonious relationship with the principal under unavoidable circumstances.

76. From the details of accounts of Shri Hanuman Sugar and Industries Ltd., it was found that the assessee had a credit balance, as on June 30, 1986, to the tune of Rs. 3,51,527. The whole essence of the order of the learned Commissioner, it appears, was that the learned Commissioner did not question the genuineness of the transaction and was satisfied that the payments were made to the payee to keep a harmonious relationship under unavoidable circumstances.

79. If the assessee can satisfy the existence of one of the requirements as provided in Rule 6DD(j), then, he is entitled to the protection provided in Rule 6DD(j). One interesting feature of this case is that the genuineness of the transaction was not doubted by the Assessing Officer and by the learned Tribunal as well. The identity of the payee was also not questioned by the Assessing Officer and the learned Tribunal either.

80. The learned Commissioner found that the payments were made to keep a harmonious relationship with the principal under unavoidable circumstances. The unavoidable circumstances is one of the conditions an assessee must satisfy in order to bring itself or himself within the exemption, or, exception as provided in Rule 6DD(j).

(i) Exceptional or unavoidable circumstances,

(ii) Causing genuine difficulties (see pages 6 and 7 of the paper book).

83. In my opinion, however, the identity of the payee and the genuineness of the transaction have a close connection with the other requirements, such as exceptional or unavoidable circumstances or causing genuine difficulties. In the instant case, the total value of the transaction in question was over Rs. 2 crores and all the payments were made by account payee cheques except the payments to the tune of Rs. 4,83,000, which payments are the subject-matter of this reference. The case of the assessee was and is that it is to maintain this business relationship that payments were made in cash under the circumstances as explained by the assessee before the Assessing Officer, the learned Commissioner of Income-tax (Appeals) and the learned Tribunal.

84. If the identity of the transaction is found to be not genuine then whether a payment is made under unavoidable circumstances or due to exceptional circumstances becomes secondary altogether as the transaction in question is found to be not genuine and in that event the whole exercise under these provisions falls through.

85. The learned Tribunal, however, found that these two circumstances were not proved that is to say that the payments were made due to exceptional or unavoidable circumstances. The provisions of the rule or the conditions laid down in the said circular do not provide as to what degree of factual proof is required to satisfy the requirements under Rule 6DD(j) read with the said circular in question. The factual proof of each case has to be taken into account for the purpose of finding out whether the requirements under the said rule are or are not satisfied. As aforesaid if the assessee satisfies one of such requirements as provided in Rule 6DD(j), he is entitled to seek protection under the said rule.