M/s Susheel & Company, Manali V. ITO, Kullu

ITA 1351/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6438 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 11-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R R THAKUR
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.1351/CHD/2017 (ASSESSMENT YEAR : 2013-14) M/S SUSHEEL & COMPANY, VS. THE INCOME TAX OFFICER, MODEL TOWN, MANALI, KULLU. (H.P.) DISTT. KULLU (H.P.) PAN: AACFS8782R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.R.THAKUR RESPONDENT BY : SMT.CHANDER KANTA, DR DATE OF HEARING : 26.12.2017 DATE OF PRONOUNCEMENT : .12.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S) PALAMPUR (HEREINAFTER REFERRED TO AS CIT(APPEALS) ) DATED 20.6.2017 RELATING TO ASSESSMENT YEAR 2013-14. 2. THE ASSESSEE HAS AGITATED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S 40A(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE A SSESSEE HAD MADE A PAYMENT OF RS.1,01,200/- THROUGH A BEARE R CHEQUE TO ONE SHRI DANDUPP NAMGYAL IN VIOLATION OF PROVISIONS OF SECTION 40A(3) OF THE ACT. HE, THERE FORE, DISALLOWED THE SAID AMOUNT AND ADDED THE SAME TO TH E INCOME OF THE ASSESSEE. 2 3. IN APPEAL BEFORE THE LD.CIT(APPEALS), THE LD. CO UNSEL FOR ASSESSEE EXPLAINED THAT THE ASSESSEE IS IN THE BUSINESS OF COMMISSION AGENT AND THE SAID PAYMENT WAS MADE O N ACCOUNT OF PURCHASE OF POTATOES, WHICH IS AN AGRICU LTURAL PRODUCE. IT WAS EXPLAINED THAT THE PAYMENT MADE FOR AGRICULTURAL PRODUCE WAS NOT TO BE ADDED TO THE INC OME OF THE ASSESSEE AS PER THE PROVISION OF SECTION 40A(3) READ WITH RULE 6DD(E)(I) OF THE INCOME TAX RULES. THE LD.CIT(APPEALS), HOWEVER, CONFIRMED THE ADDITION MA DE BY THE ASSESSING OFFICER OBSERVING THAT RULE 6DD(E)(I) COULD NOT BE INTERPRETED TO MEAN THAT ANY AGRICULTURAL PU RCHASE CAN BE MADE IN CASH. HE OBSERVED THAT FOR CLAIMING THE BENEFIT OF RULE 6DD(E)(I), THE ASSESSEE SHOULD HAVE MADE THE PAYMENT AT THE SITE OF THE PURCHASE OF AGRICULTURAL PRODUCE. 4. BEING AGGRIEVED BY THE ORDER OF THE LD.CIT(APPEA LS), THE ASSESSEE HAS COME UP IN APPEAL BEFORE US. WE H AVE CONSIDERED THE RIVAL SUBMISSIONS AND ALSO GONE THRO UGH RULE 6DD(E)(I). WE FIND THAT THERE IS NOT ANY MENTI ON OF ANY CONDITION OF MAKING THE PAYMENT AT SITE/FIELD OF TH E PRODUCER FOR THE PURCHASE OF AGRICULTURAL PRODUCE O F THE VALUE OF MORE THAN RS.20,000/- TO AVAIL THE BENEFIT OF EXCEPTION PROVISIONS OF RULE 6DD(E)(I) OF THE INCOM E TAX RULES. THE LD.CIT(APPEALS) HAS WRONGLY INTERPRETED THE SAID PROVISIONS OF RULES 6DD(E)(I). AS PER RULE 6DD(E)(I ) ANY PAYMENT MADE, EVEN IN CASH FOR THE PURCHASE OF AGRI CULTURAL OR FOREST PRODUCE DOES NOT ATTRACT DISALLOWANCE U/S 40A(3) 3 OF THE ACT. IN VIEW OF THE ABOVE, THE ORDER OF THE LD.CIT(APPEALS) IS NOT TENABLE AND THE SAME IS SET ASIDE AND ADDITION MADE IS DELETED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON ------ DECEMBER, 2017. (B.R.R. KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED DECEMBER, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH