, J.

1. The assessee-firm owns a rice huller and is engaged in husking of paddy. During the course of the examination of accounts for the assessment year 1972-73, relevant to the accounting period ending on September 30, 1971, the ITO found that the assessee made purchases of bardana and new gunny bags from M/s. Mehar Singh Jaswant Singh, Kanak Mandi, Amritsar. The assessee had a running account, with the said firm and dealings were in cash as well as by cheques. Their records showed that the following payments each exceeding Rs.2,500 were made in cash : Date Amount paid in cash Rs.3-11-1970 10,000 4-11-1970 15,000 10-11-1970 5,000 20-11-1970 20,000 30-11-1970 17,000 8-12-1970 13,000 Total 80,000

2. The ITO required the assesses to state as to why the above cash payments, each being in excess of Rs.2,500, should not be disallowed as required under the provisions of Sec.40a (3) read with Rule 6dd of the I. T. Rules. The assessee pleaded that cash payments were made due to exceptional and unavoidable circumstances as it was impracticable to cope with the supply of rice as ordered by the District Food and Supplies Controller. It further pointed out that the payments were genui