JUDGMENT (PER : HONOURABLE Mr. JUSTICE AKIL KURESHI)

Appeal is admitted for consideration of following substantial question of law :

“Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that Section 40A(3) applies to the payment of Rs. 33,10,194/= deposited by the Appellant in the bank account of Tata Tele Services Limited ?”

We have heard learned counsel for final disposal of the appeal. Brief facts are as under :

The issue pertains to A.Y 200607. The appellant-assessee is involved in the business of distribution of mobile and recharge vouchers of Tata Teleservices Limited. They are the authorized channel partners of the Company. They would make payment to the company for purchase of recharge vouchers. The assessee made such payment through account payee cheques till 22nd August 2005, when a circular was issued by Tata Teleservices Limited requiring the appellant to deposit cash at the company’s office at Surat.

During scrutiny assessment, the Assessing Officer noticed that the assessee had made a total payment of Rs. 33,10,194/= during the year under consideration to Tata Teleservices Limited by cash on different dates and such payment

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