Sivarajan, J.

The Incometax Appellate Tribunal, Cochin Bench at the instance of the Revenue has referred the following question of law as per direction issued by this Court in the judgment dated 5.10.1999 in O.P.No. 22075 of 1999 for decision by this court.

“Whether, the Tribunal was justified in holding that the provisions of Rule 6DD(j) of the Incometax Rules apply to the facts of the case, vis-à -vis section 40A(3) of the Incometax Act?â€

2. The brief facts are as follows. The assessee is an exporter of cashew kernels. The assessee, during the previous year relevant to the assessment year 1990-91, had ‘purchased raw cashewnuts from various places including the State of Orissa and the same was transported to the assessee’s factories in Kanyakumari for processing. In the assessment for the year 1990-1991 the assessee claimed deduction of a total sum of Rs. 10,98,698/- as transport and coolie charges for transporting raw cashewnuts. The assessing officer held that out of the said expenses payment of Rs. 10,28, 350,/- had to be subjected to the provisions of Sec.40A (3) by the Act as the payments were made otherwise than by way of crossed cheques or bank drafts. Sinc