R.N. Misra, J.
1. At the instance of the CIT, the Cuttack Bench of the Appellate Tribunal has stated this case and referred the following questions for the opinion of the court under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as ' the Act ') :
' 1. Whether the statutory limit of Rs. 2,500 under Section 40A(3) of the Income-tax Act applies to payment made to a party at a time or aggregate of payments made to a party in the course of the day as recorded in the cash book and
2. Whether the payees' insistence to be paid in cash can be construed as an exceptional or unavoidable circumstance within the meaning of Clause (j) of Rule 6DD of the I.T. Rules, 1962 '
2. Assessee is a registered firm and deals on wholesale basis in potato and onion. It has also dealing on commission basis in those articles. The relevant assessment year is 1974-75 ending with March 31, 1974. In the course of assessment proceedings, the ITO found that the assessee had paid to the tune of Rs. 1,10,024 in cash to different persons and called upon him to show cause as to why these payments should not be disallowed as revenue expenditure in view of the contravention of Section 40A(3) of the Act. The assessee explained that payments were made in cash because of exceptional and unavoidable circumstances and the payment in any other manner was not practicable having regard to the nature of the transactions and so they came under the exception envisaged under Rule 6DD(j) of the Rules. The explanation was not accepted and the expenditure was disallowed.
3. On appeal, the AAC accepted the logic of the ITO, sustained the disallowance to the tune of Rs. 43,524 and allowed Rs. 21,500 to be deducted on the finding that the said amount related to commission business of the assessee.
4. Before the Tribunal, it was argued that the payees belonged to distant places and their agents came to the assessee's place of business and took the money. The amounts were paid on different occasions on the same day and no single item of payment was in excess of Rs. 2,500. Assessee was not aware of what the total payment on a particular day would be, because as and when these agents approached him, payments were being made. At the end of the day, the total amounts paid to each person had been consolidated and one entry was made. Since no single payment wasin excess of Rs. 2,500, Section 40A(3) of the Act was not at all attracted. The Appellate Tribunal recorded the following finding :
' ...it is explained before us that the assessee made only one entry in the cash book at the end of the day relating to all the payments made to that party during the day. We find no reason why we should disbelieve this explanation. If that is so, then, it cannot be said that the assessee knew before it made the first payment as to how much it would pay during the day. The agents of the payees came from outside-station and stayed for a day or two in the course of which they took money, in cash, as and when needed by them during the course of their stay at the place of the assessee's business. The mere fact that the assessee made one entry in the cash book for all the payments made to a single party in the course of the day does not, in our opinion, lead to the conclusion that the assessee knew at the beginning of the day all the payments that it would make to that party in the course oi the day. The amount paid by the assessee depended not only on its cash balance but also on the demand of the party, as to when and what amount they may actually demand. '
5. This, in our view, is a pure finding of fact and we do not think we can allow learned standing counsel to challenge this finding.
6. Section 40A(3) of the Act provides :
' Where the assessee incurs any expenditure in respect of which payment is made, after such date (not being later than the 31st day of March,1969), as may be specified in this behalf by the Central Government bynotification, in the Official Gazette, in a sum exceeding two thousand fivehundred rupees otherwise than by a crossed cheque drawn on a bank orby a crossed bank draft, such expenditure shall not be allowed as a. deduction :......'
7. The second proviso is to the following effect :
' Provided further that no disallowance under this sub-section shall be made where any payment in a sum exceeding two thousand five hundred rupees is made otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft, in such cases and under such circumstances as may be prescribed, having regard to the nature and extent of banking facilities available, considerations of business expediency and other relevant factors. '
Rule 6DD of the Rules is the appropriate rule in terms of the proviso.
8. The word ' sum ' has no statutory definition and must have the common parlance meaning. Relying upon its meaning as given in the dictionary, learned standing counsel has contended that the word conveys* a sense of totality and, therefore, even if an assessee has paid a sum exceeding Rs. 2,500 in different instalments, the total having exceeded the prescribed amount, the section operated. The argument does not at all impress us.
9. The word ' sum ' has been used there toconvey the meaning of ' amount' and not the sum total figure. The Readers Digest Great Encyclopaedic Dictionary gives one of the meanings of ' sum ' as ' a quantity or amount of or of money'. The Oxford English Dictionary gives one of the meanings of the word to be a quantity of money of a specified amount. In Bouvier's Law Dictionary the meaning of the word has been given as a quantity of money or currency. The Webster's Universal Unabridged Dictionary gives the same meaning of the word ' sum ', i.e., a quantity of money or currency. As has been indicated in Words and Phrases (Permanent edn., Vol. 40) (West Publishing Co.), ' sum ' has a definite meaning appropriate to use with reference to an amount of money. In the case of Commissioners of Customs and Excise v. Queen's Park Rangers Football and Athletic Club Ltd. [1952] 2 QB 918 (QB), it has been indicated that the word ' sum ' has two connotations, one being a definite amount, e.g., so many pounds and shillings, and the other one being an addition of individual amounts to create a sum. In this connection see also Kneen v. Martin [1935] 1 KB 499 ; 19 TC 33 (CA). In the A Dictionary for Accounts by Eric L. Kohler, the meaning of ' sum ' has been given as ' an amount, as of money'. While legislating, Parliament obviously tries to convey its intention through express words. It is one of the well settled rules of interpretation that where a word used in a statute carries more than one meaning, that meaning which makes the provision workable and is nearest to the legislative intention, has to be adopted. We are of the definite view that the word ' sum ' in the relevant provision is used only to indicate an amount of money and does not refer to the totality of expenditure.
10. There is considerable force in the stand accepted by the Tribunal that if payments are made at different times during the day and the assessee has no idea that he has to pay to the same person on more than one occasion, he cannot be subjected to the statutory restriction contained in the provision in question unless any one payment is above Rs. 2,500. Section 40A appears in Chap. IV of the Act dealing with computation of total income and is classified under the sub-heading in group D ' Profits and gains of business or profession '. Parliament must have intended a work-ing rule and unless by clear meaning of the words a different intention appears, we must give the provision a construction which would make the provision workable.
11. Our answer to the first question, therefore, is :
The statutory limit of Rs. 2,500 under Section 40A(3) of the Act applies to payments made to a party at a time and not to the aggregate of payments made to a party in the course of the day as recorded in the cash book.
12. In view of such an answer, in the instant case, the provision was not at all attracted. The second question does not arise and need not be answered.
13. Assessee would be entitled to costs of this reference. Hearing fee is assessed at rupees one hundred.
DAS, J.
14. I agree.