ITO, WD-2(3), Durgapur, Durgapur V. Amzad Ali Khan, Burdwan

ITA 460/KOL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4207 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 21-04-2015
• Court: TRIBUNAL
• Department Lawyers: PINAKI MUKHERJEE
• Section: 40A(3); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H KOLKATA BEFORE SHRI S.S.VISWANETHRA RAVI, JM & DR. A.L.SAI NI, AM ./ ITA NO.460/KOL/2015 ( / ASSESSMENT YEAR:2010-2011) ITO WARD-2(3), DURGAPUR, AAYKAR BAHWAN ANNEXE, CITY CENTRE,DURGAPUR-16 VS. AMZAD ALI KHAN, MAYABAZAR C.S.SHOP, DURGAPUR, BURDWAN- 713207 ./ ./PAN/GIR NO. : AETPK 7846 K ( /APPELLANT ) .. ( / RESPONDENT ) REVENUE BY : SHRI PINAKI MUKHERJEE, JCIT ASSESSEE BY : SHRI SOMNATH GHOSH, ADVOCATE / DATE OF HEARING : 10/11/2016 /DATE OF PRONOUNCEMENT 25/11/2016 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERTAINI NG TO THE ASSESSMENT YEAR 2010-2011, IS DIRECTED AGAINST AN O RDER PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS), DURGAPUR IN A PPEAL NO.322/CIT(A)/DGP/2013-14, DATED 30.01.2015, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER (AO) UN DER SECTION 143(3) OF THE INCOME TAX ACT 1961, (IN SHORT THE ACT), DATE D 29.03.2013. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE IS A RESELLER OF THE COUNTRY SPIRIT. THE ASSESSEE FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2010-2011 ON 6-10-2010 SHOWING TOTA L INCOME OF RS.5,49,543/-. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY U/S.143(3) OF THE ACT AND THE AO HAS COMPLETED THE ASSESSMENT BY MAKING ADDITION OF RS.2,00,55,106/- U/S.40A(3) OF THE ACT. THE AO OBSE RVED THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 40A (3) OF THE ACT. THEREFORE, THE ADDITION OF RS.2,00,55,106/- WAS MAD E BY THE AO. AS THE ITA NO.460/15 AMZAD ALI KHAN 2 AO NOTED THAT ALL PAYMENTS AGAINST PURCHASES, EXCE EDING RS.20000/- WERE MADE BY THE ASSESSEE OTHERWISE THAN BY AN ACCO UNT PAYEE CHEQUE DRAWN ON A BANK OR ON ACCOUNT PAYEE DRAFT. THEREFOR E, THE AO HELD THAT IT IS A CLEAR VIOLENCE OF THE PROVISIONS OF SECTION 40 A(3) OF THE ACT. 3. AGGRIEVED FROM THE ORDER OF LD. AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS DELETED THE ADDITION S MADE BY THE AO, BY OBSERVING THE FOLLOWINGS :- 6. I HAVE GONE THROUGH THE SUBMISSIONS OF THE APPEL LANT AS WELL AS I HAVE GONE THROUGH THE FINDINGS OF THE A.O. GIVEN IN THE ASSESSMENT ORDER. THE ARGUMENTS CANVASSED ON BEHALF OF THE APP ELLANT HAVE BEEN CONSIDERED IN LIGHT OF THE ISSUE IN THE ASSESS MENT ORDER FRAMED BY THE AO ALONG WITH MATERIALS ADDUCED ON RE CORD. IT IS OBSERVED THAT IN PURSUANCE OF ITS ACTIVITIES AS A R ETAIL TRADER OF COUNTRY SPIRIT AND COUNTRY LIQUOR, THE APPELLANT HA D INCURRED EXPENSES OF AN AMOUNT OF RS.2,50,93,129/- ON ACCOUN T OF PURCHASES THEREOF FROM THE WAREHOUSE OF THE M/S. IF B-AGRO INDUSTRIES LTD. AND THE PAYMENTS TO THE TUNE OF RS. 2,00,55,106/- THEREOF WAS MADE IN CASH TO THE COLLECTION ACCOUNT OF SUCH WAREHOUSE WHICH WAS ALLEGED TO HAVE FALLEN WITHIN T HE MISCHIEF OF S.40A(3) OF THE IT. ACT. THE A/R APPEARING ON BEHAL F OF THE APPELLANT HAD VEHEMENTLY ASSAILED THE APPLICATION O F S. 40A(3) OF THE ACT IN RESPECT OF THIS TRANSACTION IN VIEW OF T HE EXCLUSION CONTAINED IN RULE 6DD(B) OF THE ACT. IT IS FOUND TH AT THE ENTIRE BUSINESS OF DEALING IN COUNTRY SPIRIT IS DONE WITHI N THE PERIPHERY OF THE DEPARTMENT OF EXCISE, GOVERNMENT OF WEST BENGAL . THE NOTIFICATION DATED 29.08.2005 IN RESPECT OF THE WES T BENGAL EXCISE (SUPPLY OF COUNTRY SPIRIT ON PAYMENT OF DUTY) RULES , 2005 LAYS DOWN THE PROCEDURE IN RESPECT OF PROCUREMENT OF COU NTRY SPIRIT. IT IS ALSO FOUND THAT THE WAREHOUSE ACTS UNDER THE AUTHOR ITY OF THE EXCISE COMMISSIONER, GOVERNMENT OF WEST BENGAL WHO IS THE SUPREME AUTHORITY IN RESPECT OF ISSUANCE OF COUNTRY SPIRIT. THEREFORE THE ENTIRE TRANSACTION TAKES PLACE WITHIN THE FRAME WORK OF THE NOTIFICATION ISSUED BY THE GOVERNMENT OF WEST BENGA L. THE FACTS AND THE POINTS OF LAW INVOLVED IN THIS ISSUE IS IDE NTICAL TO THE DECISION OF THE I.T.A.T., KOLKATA 'A' BENCH IN THE CASE OF AMRAI PACHWAI C.S. SHOP VS. DCIT IN I.T.A. NO. 1251/KOL/1 1 DATED 15.01.2014 WHEREIN IT HAS HELD AS UNDER: - '6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUTSET A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE AO HAS RECOGNIZED THE ASSESSEE'S BUSINESS IN TRADING OF CO UNTRY SPIRIT AND COUNTRY LIQUOR. COPY OF FORM OF LICENCE ISSUED BY D URGAPUR MUNICIPAL CORPORATION AND COPY OF FORM III ISSUED B Y DEPARTMENT OF ITA NO.460/15 AMZAD ALI KHAN 3 EXCISE/ GOVT. OF W. B. WERE ALSO FOUND AT PAGES 177 AND 179 OF THE ASSESSEE'S PAPER BOOK. IN ANY CASE THE VALIDITY OF LICENCE OF THE ASSESSEE TO TRADE IN COUNTRY SPIRIT AND COUNTRY LIQ UOR IS NOT THE ISSUE BEFORE US. THE ISSUE IS WHETHER THE PAYMENTS MADE B Y THE ASSESSEE FOR THE PURCHASE OF COUNTRY SPIRIT FROM TH E TERRITORIAL LICENSEE BOTTLING PLAN IFB AGRO INDUSTRIES LTD., CI TY CENTRE/ DURGAPUR FALLS WITHIN THE EXEMPTION PROVIDED UNDER RULE 6DD(B) OF THE IT RULES/1962. ADMITTEDLY THE AO HAS RECOGNIZED THAT THE PROVISION OF RULE 6DD(B) OF THE I T. RULES 1962 IS APPLICABLE IN CASE OF PAYMENTS MADE TO GOVERNMENT DIRECTLY. THIS IS FO UND IN PAGE 2 OF THE ASSESSMENT ORDER. A PERUSAL OF THE KOLKATA GAZE TTE TUESDAY 20TH SEPT 2005 SHOWS THAT THE GOVERNMENT OF WEST BE NGAL DEPARTMENT OF EXCISE HAS ISSUED A NOTIFICATION/ WHE REIN THE WAREHOUSE HAS BEEN IDENTIFIED TO MEAN THE WAREHOUSE FOR SUPPLY OF COUNTRY SPIRIT TO THE RETAIL VENDORS, ESTABLISHED A T CONVENIENT PLACES BY THE COMMISSIONER AT THE EXPENSE OF THE STATE GOV ERNMENT, OR AT THE EXPENSE OF A PERSON TO WHOM THE EXCLUSIVE PRIVI LEGE OF SUPPLYING OR SELLING COUNTRY SPIRIT BY WHOLESALE HA S BEEN GRANTED U/S 22 OF THE ACT OF A LICENSED WHOLESALE VENDOR OF COUNTRY SPIRIT. FURTHER; IT HAS BEEN SPECIFICALLY IDENTIFIED THAT T HE AUTHORISED REPRESENTATIVE OF THE WHOLESALE LICENSEE SHALL REAL IZE THE NECESSARY AMOUNT OF DUTY, COST PRICE AND BOTTLING CHARGE, IF THERE BE ANY AT THE PRESCRIBED RATE AND SUCH OTHER IMPOSITION AS MAY BE PRESCRIBED BY IAW, FROM THE RETAIL VENDOR TO WHOM THE COUNTRY SPI RIT IS TO BE ISSUED FORM THE CONCERNED WAREHOUSE. IT IS ALSO SPECIFICA LLY MENTIONED IN SECTION (2) OF THE SAID NOTIFICATION THAT NO RETAIL VENDOR OF COUNTRY SPIRIT COUNTRY SPIRIT SHALL DEPOSIT DUTY DIRECT INT O THE LOCAL TREASURY FOR ISSUE OF COUNTRY SPRIT TO BE TAKEN BY HIM FROM THE WAREHOUSE CONCERNED WHICH CLEARLY SHOWS THAT THE WAREHOUSE IS FOR THE SUPPLY OF THE COUNTRY LIQUOR SPECIFICALLY, THE WAREHOUSE I S UNDER THE DIRECT CONTROL AND CUSTODY OF THE STATE GOVT. THE STATE GO VERNMENT HAS CLOSED ITS DOORS IN SO FAR AS THE LOCAL TREASURY IS CONCERNED AND THE PAYMENT FOR THE PURCHASE OF COUNTRY SPIRIT OR COUNT RY LIQUOR HAS TO BE MADE TO THE WAREHOUSE, RUN BY THE GOVERNMENT. TH IS SHOWS THAT ANY PAYMENT MADE TO THE WAREHOUSE, WHICH IS UNDER T HE DIRECT CONTROL OF THE STATE GOVERNMENT, IS A PAYMENT MADE DIRECTLY TO THE GOVERNMENT. ONCE, THIS IS ACCEPTED THEN THE PROVISI ONS OF RULE 6DD(B) OF THE I. T. RULES, 1962 WHICH CLEARLY SPELL S OUT THAT THE PAYMENT MADE TO THE GOVERNMENT IN LEGAL TENDER UNDE R THE RULES FRAMED BY THE GOVERNMENT, IS EXEMPTED FROM THE RIGO URS OF SECTION 40A(3) OF THE ACT. HERE, IT IS NOTICED THAT THE PAY MENTS MADE BY THE ASSESSEE FOR PURCHASE OF COUNTRY SPIRIT AND COUNTRY LIQUOR IS TO THE GOVERNMENT AS PER THE NOTIFICATION ISSUED BY THE GO VERNMENT AND IS IN LEGAL TENDER SPECIFIED BY THE NOTIFICATION. IN T HE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE PAYMENT MADE BY THE ASS ESSEE FOR THE PURCHASE OF COUNTRY LIQUOR AND COUNTRY SPIRIT FROM THE TERRITORIAL LICENSEE BOTTLING PLANT; IFB AGRO INDUSTRIES LTD.. CITY CENTRE, DURGAPUR IS PROTECTED BY THE EXEMPTION IN TERMS OF RULE 6DD(B) OF THE I.T.RULES, 1962. IN THE CIRCUMSTANCES/ THE ADDI TION AS MADE BY THE AO AND AS CONFIRMED BY THE ID. CIT(A) BY INVOKI NG THE PROVISIONS OF SECTION 40A(3) OF THE I T. ACT 1961 S TANDS DELETED. ITA NO.460/15 AMZAD ALI KHAN 4 FURTHER, THE I.T.A.T. KOLKATA 'A' BENCH HAS REITERA TED ITS VIEW TAKEN IN THE AFORESAID APPEAL, IN THE CASES OF ALOK KUMAR DAS VS. ITO I.T.A. NO.1129/KOL/11 DATED 21.02.2014 AND SUKUMAR MONDAL L/R ABHIJIT MONDAL VS. ITO IN I.T.A. NO. 265/KOL/14 DAT ED 06.03.2014 WHICH WERE CITED BY THE A/R OF THE APPELLANT. HE AL SO SUPPLIED THE COPIES OF SUCH DECISIONS. IN FACT, IN THE CASE OF A MRAI PACHWAI & C.S. SHOP VS. DCIT IN APPEAL NO. 25/CIT(A)/DGP/13-1 4 DATED 12.03.2014 BEFORE ME FOR THE ASSESSMENT YEAR 2010-2 011 WHEREIN I HAD ACCEDED TO THE PLEA OF THE APPELLANT BY FOLLO WING THE AFORESAID DECISION. THUS, THE ISSUE HAS BEEN PUT TO REST BY T HE JURISDICTIONAL I.T.A.T. IN A CATENA OF DECISIONS THEREAFTER. SINCE , THE FACT OF THE INSTANT CASE IS PARI MATERIA WITH THE FACTS OF THE AFORESAID CASES DECIDED ABOVE BY THE I.T.A.T., KOLKATA; ACCORDINGLY , SUCH RATIO SHALL APPLY MUTATIS MUTANDIS TO THE FACTS OF THE INSTANT CASE ALSO. THEREFORE, MOST RESPECTFULLY FOLLOWING THE AFORESAI D PRECEDENT CITED BY THE A/R OF THE APPELLANT, I HAVE NO HESITATION T O CONCLUDE THAT THE ADDITION IN THE SUM OF RS. 2,00,55,106/- MADE BY TH E A.O. INVOKING THE PROVISIONS OF SEC 40A(3) OF THE ACT IS NOT JUST IFIED AND NOT WARRANTED IN THE FACTS AND CIRCUMSTANCES OF THE INS TANT CASE AND ACCORDINGLY, THE A.O. IS DIRECTED TO DELETE THE DIS ALLOWANCE AND ADDITION OF RS. 2,00,55,106/-. THUS, THE GROUND OF APPEAL IS ALLOWED. 7. IN THE RESULT THE APPEAL IS ALLOWED. 4. NOT BEING SATISFIED WITH THE ORDER OF LD.CIT(A), THE REVENUE IS IN FURTHER APPEAL BEFORE US AND HAS TAKEN THE FOLLOWIN G GROUNDS OF APPEAL:- 1. WHETHER THE LD. COMMISSIONER OF INCOME TAX (APPE ALS), DURGAPUR HAS ERRED ON FACT AND LAW BY HOLDING THAT CASH PAYMENT TO M/S IFB AGRO INDUSTRIES LTD, PANAGARH IS NOT A VIOL ATION OF SECTION 40A(3) OF THE I.T. ACT, 1961? 2. WHETHER THE LD. COMMISSIONER OF INCOME TAX (APPE ALS), DURGAPUR HAS ERRED BY HOLDING THAT THE CASH PAYMENT TO A BUSINESS ORGANIZATION I.E. M/S IFB AGRO INDUSTRIES LTD. IS P AYMENT TO GOVERNMENT FOR THE PURPOSE OF SECTION 40A(3)? 3. WHETHER THE LD. COMMISSIONER OF INCOME TAX (APPE ALS), DURGAPUR HAS ERRED BY HOLDING THAT CASH PAYMENT MAD E TO M/S IFB AGRO INDUSTRIES LTD.,PANAGARH IS EXEMPTED AS PER RU LE 6DD(B) READ WITH SECTION 40A(3) WHEN THERE ARE NO RULES TO SPECIFY THAT THIS PAYMENT WAS REQUIRED TO BE MADE IN CASH ONLY? 4. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE L D. COMMISSIONER OF INCOME TAX (APPEALS), DURGAPUR FAIL ED TO RECOGNIZE THAT THERE WAS ANY BINDING/OBLIGATION ON THE ASSESSEE TO MAKE CASH PURCHASE ONLY. ITA NO.460/15 AMZAD ALI KHAN 5 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A MEND, MODIFY, SUBSTITUTE, DELETE AND/OR RESCIND ALL OR ANY GROUND S OF APPEAL ON OR BEFORE FINAL HEARING. 4.1. LD. DR FOR THE REVENUE HAS VEHEMENTLY SUBMITTE D THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 40A (3) OF THE ACT. THE ASSESSEE HAS MADE PAYMENT OF EXPENDITURE IN EXCESS OF RS.20000/- WHICH DOES NOT FALL IN ANY EXCEPTION OF RULE 6DD. L D. DR HAS POINTED OUT THAT THE PAYMENT TO IFB AGRO INDUSTRIES IS IN VIOLA TION OF THE PROVISIONS OF SECTION 40A(3) BECAUSE M/S IFB AGRO INDUSTRIES IS N OT A GOVERNMENT. M/S IFB AGRO INDUSTRIES DOES NOT FALL U/S.6DD(B) OF THE INCOME TAX RULES 1962. IN ADDITION TO THIS, IFB INDUSTRIES IS NOT WO RKING AS AN AGENT BETWEEN THE ASSESSEE AND GOVERNMENT, IT DOES NOT FA LL UNDER RULE 6DD(K) OF THE I.T.RULES, 1962. SINCE IFB AGRO INDUSTRIES I S NOT A GOVERNMENT ENTITY AND THERE IS NO BINDING OBLIGATION TO COLLEC T CASH AND DEPOSIT CASH. 4.2. ON THE OTHER HAND, LD. AR FOR THE ASSESSEE HAS SUBMITTED THAT ASSESSEE HAD INCURRED EXPENSES OF RS.2,50,93,129/- ON ACCOUNT OF PURCHASES FROM THE WAREHOUSE OF M/S IFB AGRO INDUST RIES LTD. AND PAYMENT TO THE TUNE OF RS.2,00,55,106/- THEREOF WAS MADE IN CASH TO THE COLLECTION AMOUNT OF SUCH WAREHOUSE WHICH WAS ALLEG ED TO HAVE FALLEN WITHIN THE MISCHIEF OF SECTION 40A(3) OF THE ACT. THE LD. AR SUBMITTED THAT THE ASSESSEE FALLS IN THE EXCEPTIONS UNDER RUL E 6DD(B) AND UNDER RULE 6DD(K) OF THE INCOME TAX RULES. THE ENTIRE BUSINESS OF DEALING IN COUNTRY SPIRIT IS DONE WITHIN THE PERIPHERY OF THE DEPARTME NT OF EXCISE, GOVERNMENT OF WEST BENGAL. THE NOTIFICATION DATED 2 9.08.2005 IN RESPECT ITA NO.460/15 AMZAD ALI KHAN 6 OF THE WEST BENGAL EXCISE (SUPPLY OF COUNTRY SPIRIT ON PAYMENT OF DUTY) RULES, 2005 LAYS DOWN THE PROCEDURE IN RESPECT OF P ROCUREMENT OF COUNTRY SPIRIT. IT IS ALSO FOUND THAT THE WAREHOUSE ACTS UN DER THE AUTHORITY OF THE EXCISE COMMISSIONER, GOVERNMENT OF WEST BENGAL WHO IS THE SUPREME AUTHORITY IN RESPECT OF ISSUANCE OF COUNTRY SPIRIT. THEREFORE THE ENTIRE TRANSACTION TAKES PLACE WITHIN THE FRAMEWORK OF THE NOTIFICATION ISSUED BY THE GOVERNMENT OF WEST BENGAL. LD. AR POINTED OUT T HAT THE ISSUE INVOLVED IN THIS APPEAL IS IDENTICAL TO THE DECISIO N OF ITAT KOLKATA A BENCH IN THE CASE OF AMRAI PACHWAI C.S. SHOP VS. DC IT IN I.T.A. NO. 1251/KOL/11 DATED 15.01.2014. THE SAID CASE LAW HAS BEEN CITED BY US IN OUR EARLIER PARA 3. 4.3. LD. AR HAS ALSO RELIED ON THE DECISION IN THE CASE OF RAMNAGAR PACHWAI AND C.S.(S) SHOP VS. ITO, [2016] 50 ITR (TR IB) 332 (KOLKATA), WHEREIN IT WAS HELD AS UNDER :- (B) A WAS A BOTTLING PLANT CUM WAREHOUSE UNDER RULE 2(VII) OF THE WEST BENGAL EXCISE RULES, 2005 WITH PRIVILEGE GRANT ED UNDER SECTION 22 OF THE / BENGAL EXCISE ACT, 1909. A 'WAR EHOUSE' REFERRED TO UNDER THESE RULES WAS UNDER THE DIRECT CONTROL A ND AUTHORITY OF THE COMMISSIONER OF STATE EXCISE AND AS SUCH WAS A STATE GOVERNMENT ESTABLISHMENT SPECIFICALLY ESTABLISHED F OR SUPPLY OF COUNTRY SPIRIT TO RETAIL VENDORS SUCH AS THE ASSESS EE ALONE AND NOT TO ANYBODY ELSE. THE ASSESSEE HAVING MADE CASH PAYM ENTS FOR PURCHASE OF COUNTRY SPIRIT BY DEPOSITING CASH DIREC TLY INTO THE BANK ACCOUNT OF A IN ACCORDANCE WITH RULE 6(2) OF THE EX CISE RULES, 2005, IT HAD TO BE CONSTRUED AS PAYMENT MADE TO THE STATE GOVERNMENT AUTHORITY AND ACCORDINGLY FELL UNDER THE EXCEPTION PROVIDED IN RULE 6DD(B) OF THE INCOME-TAX RULES, 1962. (C) THE PAYMENT MADE BY THE ASSESSEE RETAIL VENDOR TO THE PRINCIPAL, GOVERNMENT OF WEST BENGAL THROUGH ITS WH OLESALE AGENT. THE RELATIONSHIP BETWEEN THE ASSESSEE (AUTHORISED R ETAILER) AND THE GOVERNMENT OF WEST BENGAL (THE SUPPLIER) ACTING UND ER WEST BENGAL EXCISE RULES THROUGH ITS AUTHORISED WHOLESAL ER LICENSEE (AGENT), BOTH DE FACTO AND DE JURE, WAS ONE OF 'PRI NCIPAL' AND ITA NO.460/15 AMZAD ALI KHAN 7 'AGENT'. THE ASSESSEE RETAIL VENDOR-HAD MADE PAYMEN T TO THE AGENT (WHOLESALE LICENSEE) AND THIS WOULD FALL UNDE R THE EXCEPTION PROVIDED IN RULE 6DD(K) OF THE RULES. 4.4. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED T HE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT I N THE SUBMISSION OF THE ASSESSEE, AS THE PROPOSITIONS CANVASSED BY LD. AR FOR THE ASSESSEE ARE SUPPORTED BY THE ABOVE CITED JUDGMENTS OF HON`BLE I TAT KOLKATA (SUPRA). AS THE LD. AR POINTED OUT THAT THE ASSESSEE DID THE TRANSACTION AS PER THE NOTIFICATION DATED 29.8.2005 IN RESPECT OF THE WEST BENGAL EXCISE (SUPPLY OF COUNTRY SPIRIT ON PAYMENT OF DUTY) RULES, 2005 L AYS DOWN THE PROCEDURE IN RESPECT OF PROCUREMENT OF COUNTRY SPIR IT. IT IS ALSO FOUND THAT THE WAREHOUSE ACTS UNDER THE AUTHORITY OF THE EXCIS E COMMISSIONER, GOVERNMENT OF WEST BENGAL WHO IS THE SUPREME AUTHOR ITY IN RESPECT OF ISSUANCE OF COUNTRY SPIRIT. THEREFORE, THE ENTIRE T RANSACTION TAKES PLACE WITHIN THE FRAMEWORK OF THE NOTIFICATION ISSUED BY THE GOVERNMENT OF WEST BENGAL. ONCE, THIS IS ACCEPTED THEN THE PROVISIONS OF RULE 6DD(B) OF THE I. T. RULES, 1962, WHICH CLEARLY SPELLS OUT THAT THE P AYMENT MADE TO THE GOVERNMENT IN LEGAL TENDER UNDER THE RULES FRAMED B Y THE GOVERNMENT, IS EXEMPTED FROM THE RIGOURS OF SECTION 40A(3) OF THE ACT. IT IS ALSO NOTICED THAT THE PAYMENTS MADE BY THE ASSESSEE FOR PURCHASE OF COUNTRY SPIRIT AND COUNTRY LIQUOR IS TO THE GOVERNMENT AS PER THE NOTIFICATION ISSUED BY THE GOVERNMENT AND IS IN LEGAL TENDER SPECIFIED BY THE NOTIFICATION. CONSIDERING THE FACTUAL POSITION, WE ARE OF THE VIE W THAT THERE IS NO ANY ITA NO.460/15 AMZAD ALI KHAN 8 INFIRMITY IN THE ORDER OF THE LD. CIT(A). THEREFORE , WE DO NOT HESITATE TO CONFIRM THE ORDER PASSED BY THE LD. CIT(A). 4.5. IN THE RESULT, APPEAL FILED BY THE REVENUE ON ALL THE GROUNDS IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25/1 1/2016. S D/ - (S.S.VISWANETHRA RAVI) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 25/11/2016 ' $%& /PRAKASH MISHRA , 0 . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT-ITO WARD-2(3), DURGAPUR 2. / THE RESPONDENT.-AMZAD ALI KHAN 3. 1 ( ) / THE CIT(A), DURGAPUR 4. 1 / CIT , DURGAPUR 5. 23 4 0056 , 56 , / DR, ITAT, KOLKATA 6. 4 78 / GUARD FILE. 2 0 //TRUE COPY//