R. GURURAJAN, J. ( 1 ) REVENUE is before us in this appeal. The following three questions of law are raised; (i ). Whether the assessee is entitled to the relief claimed when he has not satisfied the conditions stipulated in Section 43a (3) of the Act Rule 6dd (j) of the Rules? (ii ). Whether it is mandatory on the part of the assessee to furnish evidence as to the genuiness of the payment and the identity of the payee which has admittedly not been done in the present case in order to claim exemption under Section 43a (3) of the Act and Rule 6dd (j) of the Rules. (iii ). When admittedly the assessee had made payments through cheques to the extent of several lakhs of rupees, whether he is entitled to the relief claimed in respect of those payments where he has made cash payment to several lakhs of rupees. ? ( 2 ) FACTS as narrated in the appeal are as under;-Assessee is a firm it carries on the business of manufacture of sheet metal machinery. During the relevant year 1986-87 assessee made cash purchases to the tune of several lakhs of rupees and the department sought an explanation from the assessee. The explanation was not accepted. An adverse order was passed by applying the provisions of Section 43a (3) of the Act. An appeal was filed. Appeal stood dismissed. Further appeal was filed to the tribunal. The tribunal has chosen to allow the appeals in part and the tribunal dismissed the two appeals filed by the revenue. It is in these circumstances, revenue is before us. ( 3 ) HEARD Sri Seahachala, learned Counsel for the revenue. He would argue that the finding of the tribunal cannot but be perverse on the facts of this case. He would argue that large sums of money have been made over without any cheque payment and by way of cash transactions. He would show that in terms of Section 40a (3), the assessing officer was justified in rejecting the case of the assessee. He would say that the order of the commissioner so also the order of the tribunal are to be set aside in the light of grant of relief to the assessee. He would rely on 255 itr 258. He would show that in terms of Section 40a (3), the assessing officer was justified in rejecting the case of the assessee. He would say that the order of the commissioner so also the order of the tribunal are to be set aside in the light of grant of relief to the assessee. He would rely on 255 itr 258. ( 4 ) PER contra, learned Counsel for the assessee would any that this appeal has to be confined to the assessment year 1985-86 and 1986-87. He would also point out that after the orders of the appellate commissioner, the respondent has been granted the benefit of deletion of Rs. 83,767/for the assessment year 1986-87, and for the year 1985-86 the assessing authority has chosen to disallow the cash purchases to the extent of Rs. 1,50,307/ -. He therefore says that though the department got a case on merits, even then according to him the appeal cannot be allowed in its entirety. ( 5 ) AFTER hearing, we have carefully perused the material on record. ( 6 ) THE assessing authority has passed three assessment orders. For the assessment year 1985-86, the assessing authority has chosen to add back a cash transaction for the purpose of levy of tax in the case on hand. For the assessment year 1986-87, the assessing officer has again chosen to add back the cash transaction. For the assessment year 1987-88, the assessing officer noticed the genuineness of the expenditure in the light of the material on record. ( 7 ) AGGRIEVED by these assessment orders, assessee filed three separate appeals. For the assessment year 1985-86, the appellate commissioner has chosen to allow the appeal in part by confirming the disallowance. For the assessment year 1986-87, the appellate authority allowed the appeal and thereby directed the assessing officer to allow the deduction in respect of parties whose identity has been established by way of proper receipts and vouchers. The appellate commissioner for the assessment year 1987-88 has chosen to allow the appeal in part and while so doing he noticed certain transactions to be genuine transactions and that therefore he directed the assessing officer to allow according to the bills available with the appellant. ( 8 ) FURTHER appeals were filed by the assessee as well as the revenue. ( 8 ) FURTHER appeals were filed by the assessee as well as the revenue. The tribunal allowed the appeals filed by the assessee for all the three years in part, however, it dismissed the appeal filed by the revenue for two years. Aggrieved by the said order, revenue has filed this appeal with regard to the assessment year 1985-86 and 1986-87. No separate appeal as such was filed by the revenue before the tribunal with regard to the assessment year 1987-88. Even otherwise, the appellate order would show that only a direction was given to the assessing officer to verify the bills and allow according to the bills available with the appellant. Therefore, we are satisfied that this appeal has to be confined only to the assessment years 1985-86 and 1986-87. We have seen the orders passed by the authorities. It is seen that the assessee is engaged In scrap business. The tribunal In the light of the order of the appellate authority notices that Section 40a (3) and also the Rule 6dd (j) of the Rules. After noticing, the tribunal has ruled that there is no doubt about the fact that in general the onus lies on the assessee to prove that the cases of cash purchases above the limit of Rs. 2,500/- come within the ambit of Rule 6 DD (j) by producing relevant evidences. He further noticed that the assessee indeed made some cash purchases from certain small unregistered dealers at rates lower than at which It made other purchases from the registered dealers. The tribunal noticed that the small dealers of scrap, who themselves are unregistered businessmen, would insist on receipt of payments in cash and would not also issue proper invoices, receipts etc. , as otherwise they would be under the fear of being entangled by the net of the sales tax department. The tribunal notices that it would not always be possible for it to issue cheques every time. In that view of the matter, the tribunal has chosen to accept the case as one falling within Rule 6dd (j) of the Act. Such reasons cannot be accepted for the purpose of exemption under Rule 6dd (j ). We are therefore of the view that the tribunal has committed a serious legal error in accepting the explanation so offered by the assessee. Such reasons cannot be accepted for the purpose of exemption under Rule 6dd (j ). We are therefore of the view that the tribunal has committed a serious legal error in accepting the explanation so offered by the assessee. We are therefore of the view that the order of tribunal in this regard has to be set aside on the facts of this case. We are fortified by the judgments of the Supreme Court. In 216 ITR 366, the Gauhati High Court has ruled as under; thus, it is not merely the genuiness of transaction but also the existence of the circumstances warranting payment by cash. In Giridharilal Goenka's case [1989 ]179 itr122 (Cal ), the Calcutta High Court while propounding the view that the Assessing Officer has to take into account the surrounding circumstances, considerations of the nature of account of the surrounding circumstances, considerations of the nature of business, its exigency and other related facts while exercising his discretion held that there cannot be an exhaustive list of such circumstances falling within the purview of Clause (j) of Rule 6dd which can be uniformly applied. The Apex Court in 255 ITR 258 has chosen to notice with regard to the legislative powers in the matter of Income Tax provision. The Apex Court ruled that the object of introducing Section 269ss is to ensure that a tax payer is not allowed to give false explanation for his unaccounted money, or if he makes some false entries, he shall not escape by giving false explanation for the same. During search and seizures, unaccounted money is unearthed and the tax payer would usually give the explanation that he had borrowed or received deposits from his relatives or friends and it is easy for the so called leader also to manipulate his records to suit the plea of the tax payer. The main object of Section 269ss was to curb this menace of making false entries in the account books and later giving an explanation for the same. Though it was with reference to loans and deposits, the very reasons accepted by the Supreme Court, equally be applicable with regard to the genuiness of cheque payment as against cash payment. The menace of false entries, false accounts, false pleas would get then eliminated. Though it was with reference to loans and deposits, the very reasons accepted by the Supreme Court, equally be applicable with regard to the genuiness of cheque payment as against cash payment. The menace of false entries, false accounts, false pleas would get then eliminated. ( 9 ) IN so far as relief is concerned, we see in terms of the argument of Sri Shankar and in the light of the order of the appellate commissioner, the department has to accept the transaction which are otherwise supported by the bills. He therefore says that in the light of subsequent development of acceptance and in light of the subsequent proof of documentary evidence, the deletion has to be the extent of Rs. 83,767/ -. His submission is accepted. ( 10 ) SIMILARLY in so far as the assessment year 1986-87 we have seen the order of the assessing authority in terms of the remand order. From the order it is seen that the assessee was able to produce the vouchers to the extent of Rs. 83,767/- Therefore he is entitled for the deletion to the extent of Rs. 83,767/- is concerned. Similarly, in terms of the subsequent order, we see that for the assessment year 1985-86 the cash transaction was to the extent of Rs. 1,50,307/ -. Hence the department has to take into account this as the basis for the purpose of tax. ( 11 ) IN the result, we deem it proper to accept this appeal in part. The proceedings pursuant to the assessment year 1986-87 is not interfered with in this order. In so far as the assessment year 1986-87 is concerned, we deem it proper to accept the transaction of Rs. 83,767/-in the light of the supporting documentary evidence and with regard to balance amount the department is to tax the assessee. Similarly for the year 1985-86, the assessing authority has to tax the cash transactions to the extent of Rs. 1,50,307/ -. ( 12 ) IN these circumstances, the questions of law are answered in favour of the revenue and in terms of this order on facts. Ordered accordingly. No costs.