Attar Singh Gurmukh Singh vs Income Tax Officer, Ludhiana Etc on 7 August, 1991
Further the Hon'ble Punjab & Haryana
H i g h C o u r t a l s o m a d e a r e f e r e n c e t o a j u d g me n t
of the Hon'ble Apex Court in the case of Attar
S i n g h G u r mu k h Singh Vs. ITO (1991) 4SCC 385,
wh e r e b y it wa s held that the provisions of
section 40A(3) of the Act and Rule 6DD of the
I n c o me T a x R u l e s we r e i n t e n d e d t o r e g u l a t e t h e
business transactions and to prevent the use of
u n a c c o u n t e d mo n e y o r r e d u c e t h e c h a n c e s t o u s e
black mo n e y f o r business transactions. Af ter
analyzing all these, the Hon'ble High Court held
that the T ribunal has not disbelieved the
transactions or the genuineness thereof , nor has
11
it disbelieved the f act of payments having been
m a d e , mo r e i m p o r t a n t l y , t h e r e a s o n s f u r n i s h e d
by the assessee f or making the cash payments
have not been disbelieved. This clearly makes
out a case of business expediency. I n t h i s v i e w,
the Hon'ble High Court held the payments to be
outside the purvie w of section 40A(3) of the Act.