The Madras High court on 22nd September,2020 in the case of *Lena Talkies Vs ITO in Tax Case Appeal No 645-647 of 2019* was considering whether cash payment made for acquiring *rights in Film * in excess of limit specified in Section 40A(3) could be allowed (even though the same did not fall within any of the situations specified in Rule 6DD) on the basis of commercial expediency and proof of identity since *75% of the payment to the same parties was made by cheque and balance 25% was made by cash*.

The court noting that the commercial expediency has to be decided on the facts of each case and in this case since the banking facilities were available in Chennai and the payments were made by cheque to the same parties, the assessee was not eligible to get the deduction for cash payments made by it.

The copy of the order is enclosed herewith.