S.S.Sodhi, J.

1. Avoidance of the rigour of Section 40A(3) of the Income-tax Act, 1961, in terms of Rule 6DD of the Income-tax Rules, 1962 (hereinafter referred to as "the Act" and "the Rules", respectively), in respect of payments made by the assessee in cash is what constitutes the main issue in controversy in this reference.

2. We are concerned herewith the assessment year 1972-73.

3. The assessee is a registered firm which deals in the sale and purchase of items like ghee, sugar and maida. During the relevant assessment year, it purchased ghee of the aggregate value of Rs. 55,00,000 and odd from Messrs. Amrit Banaspati Company on as many as 189 different occasions. These payments included payment of a total sum of Rs. 4,47,000 in cash on 15 occasions each of which involved payment of a sum exceeding Rs. 2,500. It is the case of the assessee that these payments in cash were made on account of the urgent demands made upon it by the supplier-company. This explanation was, however, not accepted by the Income-tax Officer who, consequently, included this amount of Rs. 4,47,000 in the taxable income of the assessee.

4. On appeal, on the other hand, the Appellate Assistant Comm