The Commissioner (Appeals) considered the nature of transaction and held that the Assessing Officer was not justified in considering the property in question to be stock-in-trade and held that section 40A(3) was not attracted. On appeal by the Department before the Tribunal, there was a difference of opinion between the Members who heard the appeal. Consequently, the President of the Tribunal in his power under section 255(4) referred the matter to the Third Member who affirmed the findings of the Commissioner (Appeals) holding that when an expenditure was incurred for which payment was not made in cash or monetary terms, the provisions would have no application. On appeal  dismissing the appeal of the Revenue the Court held  that the Department did not state that any cash transaction took place. There was no perversity in the order passed by the Third Member of the Tribunal in agreement with the Accountant Member that the provisions of section 40A(3) were not applicable. (AY.2007-08)