IN THE HIGH COURT OF DELHI AT NEW DELHI 
 . 
   ITA 289/2013  
 . 
 ARUN KUMAR GOENKA    ..... Appellant 
 . 
 Through: Mr Pankaj Bhatia, Advocate 
 . 
 . 
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 versus 
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 . 
 INCOME TAX OFFICER    ..... Respondent 
 . 
 Through: Mr Sanjeev Sabharwal, Advocate 
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 CORAM: 
 . 
 HON'BLE MR. JUSTICE BADAR DURREZ AHMED 
 . 
 HON'BLE MR. JUSTICE VIBHU BAKHRU 
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 O R D E R 
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      31.05.2013 
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 CM No. 9194/2013 
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 Exemption is allowed subject to all just exceptions. 
 . 
 ITA No. 289/2013 and CM No. 9193/2013 
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 This appeal preferred by the assessee is directed against the order 
 dated 16.01.2013 by the Income Tax Appellate Tribunal, New Delhi in ITA 
 No. 2925/Del/2011 relating to the assessment year 1996-97.  The issue 
 relates to cash payments aggregating ` 6,90,119/- which had been made by 
 the assessee for purchase of scrap from Hindustan Wire Ltd and cash 
 payments to transporter companies towards freight to the extent of 
 ` 21,16,408/-.  Certain other cash payments were also made to the extent 
 of ` 10,210/-.  The Assessing Officer had disallowed 20% of the above 
 amounts by invoking the provisions of Section 40A(3) of the Income-tax 
 Act, 1961 read with Rule 6DD(j) of the Income-tax Rules, 1962.  The 
 Tribunal was deciding the case in the second round.  On the earlier 
 round, the Tribunal had remanded the matter to the Assessing Officer for 
 examining as to whether exceptional circumstances had existed in order to 
 justify the payments of the said amounts in cash.  The Assessing Officer 
 in the second round also held against the assessee and so did to the 
 Commissioner of Income Tax (Appeals).  These findings were confirmed by 
 the Tribunal.  The Tribunal noted that the Commissioner of Income Tax 
 (Appeals) had concluded that no exceptional or unavoidable circumstances 
 existed so as to justify the payments made in cash.  Hindustan Wire Ltd 
 had bank accounts at Faridabad and the assessee / appellant also had 
 regular business with the transporter companies. 
 . 
 The Tribunal after hearing counsel for the parties concluded as 
 under:- 
 . 
 ?We have heard both the sides on this issue.  In the first round of the 
 appeal the Hon?ble ITAT set aside the matter back to the file of the AO 
 to examine afresh whether exceptional circumstances as provided in Rule 
 6DD were in existence or not.  The person to whom the payments were made 
 were known to the assessee and were having regular transactions on 
 earlier occasions also and the payments were being made by cheques to 
 them.  In view of these facts we are unable to agree with the contention 
 of the assessee that the payments have been made in the exceptional 
 circumstances.  The assessee cannot create an exceptional circumstances 
 by stating that there was a demand in the market and the quality of scrap 
 was superior.  Such statements cannot be considered as an exceptional 
 circumstances when the person with whom the transaction was done were 
 well known to the assessee and were having regular transactions on 
 earlier occasions.  The ration laid down in the case-laws relied upon by 
 the assessee are of no help to the assessee.  Genuineness of transaction 
 and bonafide of the transaction is not taken out of the sweep of the 
 section.  The exceptional circumstances has been provided in Rule 6DD for 
 exemption from the requirement of payment by cross-cheque or cross bank 
 draft.  No exceptional circumstances were in existence. Therefore in our 
 considered view there is no merit in the appeal of the assess.? 
 . 
 . 
 . 
 We find that the above conclusions are on facts and no substantial 
 question of law arises for our consideration.  The appeal is dismissed. 
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 . 
 BADAR DURREZ AHMED, J 
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 . 
 VIBHU BAKHRU, J 
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 MAY 31, 2013 
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 SU 
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 $ 4 
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