JUDGMENT
1. This court directed the Income-tax Appellate Tribunal under Section 256(2) of the Income-tax Act, 1961 (briefly, "the Act"), to draw up a statement of the case and refer the following question relating to the assessment year 1971-72 for the opinion of this court :
"Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the payments of Rs. 1,26,583 made by the assessee for purchases of raw materials for its business were allowable as a deduction from the assessee's income and could not be disallowed under Section 40A(3) of the Income-tax Act, 1961 ?"
2. The assessee-firm--engaged in the business of manufacture and sale of brass utensils--made certain purchases of raw materials for its business through a commission agent, Matha Prasad Kedar Nath, Mirzapur, for an amount aggregating to Rs. 1,26,583. The Assessing Officer refused to allow the deduction of such purchases on the ground that they were made in a sum exceeding the limit of Rs. 2,500 without a crossed cheque or crossed bank draft.
3. The Appellate Assistant Commissioner on appeal sustained the order of the Assessing Officer.
4. On further appeal, the Appellate Tribunal accepted the contention of the assessee that the purchases without crossed cheque or crossed bank draft were made in exceptional and unavoidable circumstances within the meaning of Rule 6DD(j) of the Income-tax Rules, 1962 (for short, "the Rules"). The Appellate Tribunal found that an affidavit sworn by Shri Kedar Nath, one of the partners in the firm of the commission agent Matha Prasad Kedar Nath, was filed stating that the commission agent who had dealings with the assessee-firm for the first time, had insisted upon the assessee-firm to make cash payment. A copy of the account of the commission agent in the books of the assessee-firm was also filed and Shri Kedar Nath categorically stated that the copy of the account of the commission agent in the books of the assessee-firm was true and correct. Shri Kedar Nath who had sworn the affidavit was not cross-examined by the Assessing Officer or by the Appellate Assistant Commissioner. The Appellate Tribunal, therefore, accepted the uncontroverted affidavit of Shri Kedar Nath, filed on behalf of the commission agent. It is in these circumstances that the Tribunal accepted the contention of the assessee-firm that payments in cash exceeding the stipulated limit had been made in unavoidable circumstances. We do not see any illegality in the inference drawn by the Appellate Tribunal on the facts and circumstances of the case. The finding of fact as recorded by the Appellate Tribunal cannot be disturbed, especially when that is fully supported by the evidence available on the record.
5. We, therefore, answer the aforementioned question in the affirmative, that is, in favour of the assessee and against the Revenue.