The ACIT, Circle-1, Bhavnagar V. Ambuja Ginning Pressing & Oil Co.Ltd., Bhavnagar

ITA 1521/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9136 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-09-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 14-05-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH SENIOR
• Keywords: Set aside
• Section: 40A(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'B' (BEFORE S/SHRI P K BANSAL AND MAHAVIR SINGH) ITA NO.1521/AHD/2009 (ASSESSMENT YEAR: 2002-03) THE ASSISTANT COMMISSIONER OF INCOME- TAX, CIRCLE-1, BHAVNAGAR V/S AMBUJA GINNING, PRESSING & OIL CO. LTD., PALITANA ROAD, TALAJA, BHAVNAGAR PAN: AABCA 7988 Q (APPELLANT) (RESPONDENT) APPELLANT BY :- SMT. NEETA SHAH, SENIOR DR RESPONDENT BY:- SHRI TUSHAR P HEMANI O R D E R PER P K BANSAL (ACCOUNTANT MEMBER) : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A ) DATED 29- 01-2009, BY WHICH THE CIT(A) HAS DELETED AN ADDITIO N OF RS.6,58,887/- MADE BY THE AO U/S 40A(3) OF THE INCO ME-TAX ACT, 1961 [THE ACT FOR SHORT]. 2 THE BRIEF OF THE CASE ARE THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASS ESSEE HAD MADE CASH PURCHASES OF RS.32,94,338/-. WHEN THE AO ASKED WHY THE DISALLOWANCE OF 20% OF THESE PURCHASES SHOULD N OT BE MADE BEING INCURRED IN CONTRAVENTION OF SECTION 40A(3), THE ASSESSEE CLAIMED THAT NO DISALLOWANCE SHOULD BE MADE AS THE CASE OF THE ASSESSEE IS DULY COVERED BY RULE 6DD(F)(I) OF THE I NCOME-TAX RULES. THE AO NOTED THAT THE ASSESSEE COULD NOT PRO DUCE EVIDENCES OF ALL THE AGRICULTURISTS FROM WHOM CASH PURCHASES OF 2 THE AGRICULTURAL PRODUCTS WERE MADE. THE AO NOTED S UCH CASH PURCHASES AT RS.32,94,438/- DETAILED IN PAGE-2 OF T HE ASSESSMENT ORDER. THE AO, THEREFORE, TOOK THE VIEW THAT THE CA SE OF THE ASSESSEE IS NOT COVERED BY RULE 6DD(F)(I) OF THE IT RULES AND HE MADE AN ADDITION OF RS.6,58,887/- U/S 40A(3) OF THE ACT BEING 20% OF THE CASH PURCHASES MADE IN EXCESS OF RS.20,0 00/-. 3 THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AN D BEFORE THE CIT(A) HE SUBMITTED THAT THE AO OUGHT TO HAVE APPRECIATED THE FACT THAT FURNISHING OF DETAILS IN THE CASE OF EACH AND EVERY AGRICULTURIST IS NOT ONLY UNWORKABLE BUT PRACTICALLY DIFFICULT AND THERE IS NO STATUTORY REQUIREMENT TO KEEP SUCH RECORDS IN RESPECT OF EACH SUCH AGRICULTURIST AS SU CH. THE CIT(A) DELETED THE ADDITION. 4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y CONSIDERED THE SAME. IN OUR OPINION, WHEN THE ASSES SEE CLAIMS THAT ITS CASE IS COVERED BY THE EXCEPTIONS PROVIDED UNDER RULE 6DD(F)(I), THE ONUS IS ON THE ASSESSE TO PROVE THAT THE PAYMENT IS MADE FOR THE PURCHASE OF AGRICULTURAL PRODUCTS. IT IS NOT ESSENTIAL FOR THE ASSESSEE TO PROVE THAT THE PERSONS FROM WHO M THE SAID PURCHASES HAVE BEEN MADE ARE AGRICULTURISTS. THE AS SESSEE MUST BE HAVING MANDI TAX BILLS ETC. FOR THE AGRICULTURAL PRODUCTS PURCHASED BY HIM. WE, THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY TO BOTH THE PARTIES, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THIS ISSUE TO THE FILE OF THE AO WITH T HE DIRECTION THAT THE AO SHALL RE-DECIDE THIS ISSUE IN ACCORDANCE WIT H LAW, AFTER GIVING PROPER AND REASONABLE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE AND TO SUBMIT NECESSARY EVIDENCE IN THIS R EGARD. 3 5 IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17-09-2009 SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (P K BANSAL) ACCOUNTANT MEMBER DATE : 17-09-2009 COPY OF THE ORDER FORWARDED TO : 1. AMBUJA GINNING, PRESSING & OIL CO. LTD., PALITAN A ROAD, TALAJA, BHAVNAGAR 2. THE ACIT, CIRCLE-1, BHAVNAGAR 3. THE CIT CONCERNED 4. THE CIT(A)-XX, AHMEDABAD 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY.R/AR, ITAT, AHMEDABAD