DCIT CIR 1, MUMBAI V. GEE SQUARE EXPORTS, NAVI MUMBAI

ITA 5348/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7923 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 17-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHISHIR DHAMIJA
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & RAMLAL NEGI (JM) I.T.A. NO. 5348 /MUM/20 15 (ASSESSMENT YEAR 20 11 - 12 ) ACIT, CIRCLE - 1 ROOM NO. 22 B - WING, 6 TH FLOOR ASHAR IT PARK WAGLE INDUSTRIAL ESTATE THANE (WEST ) - 400604. VS. M/S. GEE SQUARE EXPORTS A - 4, 401, LOK UPVAN GLADYS ALWARES ROAD MAJIWADA THANE (WEST) - 400601. PAN : AACFG9058J ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI RAJIV KHANDELWAL DEPARTMENT BY S HRI SHISHIR DHAMIJA DATE OF HEARING 22 . 1 1 . 201 7 DATE OF PRONOUNCEMENT 13 . 12 . 201 7 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 31 - 08 - 2015 PASSED BY LD CIT(A) - 1, THANE AND IT RELATES TO THE ASSESSMENT YEAR 2011 - 12. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE AO U/S 40A(3) OF THE ACT. 2. THE REGISTRY HAS POINTED OUT THAT THE APPEAL IS BARRED BY LIMITATION BY 30 DAYS AND IT WAS NOTICED THAT THE REVENUE HAS NOT MOVED ANY PETI TION SEEKING CONDONATION OF DELAY. WHEN IT WAS PUT TO LD D.R ON THE EARLIER OCCASION, THE LD D.R FILED AN EXPLANATION STATING THAT THE DATE OF RECEIPT OF ORDER WAS WRONGLY NOTED IN FORM NO.36 AS 19 - 08 - 2015, WHEREAS THE ORDER WAS RECEIVED ONLY ON 21 - 09 - 201 5. ACCORDINGLY THE LD D.R SUBMITTED THAT THE APPEAL WAS FILED WELL WITHIN TIME FROM THE ACTUAL DATE OF RECEIPT. IN SUPPORT OF THESE SUBMISSIONS, THE LD D.R ALSO PRODUCED A LETTER DATED 30 - 10 - 2017 FURNISHED BY THE CONCERNED COMMISSIONER OF INCOME TAX. TH E LD A.R DID NOT OBJECT TO THE SUBMISSIONS SO MADE BY LD D.R. UNDER THESE SET OF FACTS, WE HOLD THAT THERE M/S. GEE SQUARE EXPORTS 2 WAS AN ERROR IN NOTING THE DATE OF RECEIPT OF ORDER AND HENCE THERE WAS NO DELAY IN FILING THE APPEAL . A CCORDINGLY WE ADMIT THE APPEAL OF THE REVE NUE. 3. THE FACTS RELATING TO THE ISSUE ARE DISCUSSED IN BRIEF. THE ASSESSEE IS ENGAGED IN TRADING AND EXPORT OF MEAT, MUTTON AND FISH PRODUCTS. THE TURNOVER OF THE YEAR UNDER CONSIDERATION WAS 115 CRORES. THE AO NOTICED THAT THE ASSESSEE HAS PURCH ASED MEAT AND FISH ITEMS BY PAYING CASH TO THE TUNE OF RS.781.19 LAKHS. THE AO ALSO NOTICED THAT THE ASSESSEE HAS ISSUED BEARER CHEQUES TO VARIOUS PERS ONS TOWARDS THE PURCHASE OF PRODUCTS AND THE SAME AGGREGAT ED TO RS.763.95 LAKHS. THE ASSESSING OFFICER TOOK THE VIEW THAT BOTH THE PAYMENTS HAVE BEEN MADE IN VIOLATION OF PROVISIONS OF SEC. 40A(3) OF THE ACT AND ACCORDINGLY THE AO DISALLOWED BOTH THE AMOUNTS MENTIONED ABOVE. THE LD CIT(A) NOTICED THAT THE ITAT HAS CONSIDERED AN IDENTICAL ISSUE IN THE ASSES SEES OWN CASE IN ASSESSMENT YEAR 2009 - 10 IN ITA NO.6606/MUM/2013 DATED 31.10.2014, WHEREIN THE TRIBUNAL HAS HELD THAT THE PAYMENTS MADE FOR PURCHASE OF MEAT PRODUCTS IS COVERED BY THE E XCEPTIONS PROVIDED BY RULE 6DD(E )(II) OF THE I.T RULES. ACCORDINGLY, BY FOLLOWING THE DECISION RENDERED BY THE TRIBUNAL, THE LD CIT(A) HELD THAT THE IMPUGNED PAYMENTS ARE COVERED BY THE EXCEPTION TO SEC. 40A(3) OF THE ACT PROVIDED IN RULE 6DD. ACCORDINGLY HE DELETED BOTH THE ADDITIONS MADE BY THE AO. AGGRIEVED, THE REVENUE HAS FILED THIS APPEAL. 4. AT THE TIME OF HEARING, BOTH THE PARTIES AGREED THAT THE ISSUE AGITATED IN THIS APPEAL IS COVERED BY THE DECISION RENDERED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR AY 2009 - 10. WE HAVE ALSO NOTICED THAT THE LD CIT(A) H AS ALSO FOLLOWED THE DECISION RENDERED BY THE TRIBUNAL. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE OPERATIVE PORTION OF THE ORDER PASSED BY LD CIT(A): - 20. I HAVE CA REFULLY CONSIDERED THE APPELLANTS SUBMISSIONS , OB SER V A TIONS OF THE AO IN THE ASSESSMENT ORDER AND T HE FACTS OF THE CASE. IN THIS CASE DISALLOWANCE HAS BEEN MADE BY ASSESSING OFFICER U/S. 40A(3) IN RESPECT OF PURCHASE EXPENSES AMOUNTING TO RS. 7,81,19,134/ - FOR THE REASON THAT SUCH PAYMENTS WERE MADE IN CASH AND AMOUNTING TO ` 7,6 3,95,953/ - FOR THE M/S. GEE SQUARE EXPORTS 3 REASON THAT SUCH PAYMENTS WERE MADE THROUGH BEARER CHEQUES I.E. OTHERWISE THAN BY CROSSED CHEQUES OR CROSSED DEMAND DRAFTS. THE SAME ISSUE HAS BEEN CONSI D ERED AND DECI DED BY THE ITAT, B BENCH, MUMBAI IN THE APPELLANTS OWN CASE FOR A.Y. 2009 - 10 IN ITA NO. 6606/MUM/2013 DATED 31.10.2014. THE HON'BLE ITAT, MUMBAI AFTER CONSIDERING THE FACTS OF THE CASE, HELD AS UNDER : - 11. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE RELEVANT FINDING OF THE LD.CIT(A) AND MATERIAL PLACED ON RECORD. THE ASSESSEE IS MAINLY IN THE BUSINESS OF EXPORTING VARIOUS PRODUCTS OF MEAT TO DIFFERENT COUNTRIES. THE ASSESSEE HAD SHOWN SALE OF 90.47 CRORES, OUT OF WHICH EXPORT SALES IS APPROXIMATELY 86 CRORES. THE ASSESSEE IS PURCHASING RAW MATERIAL, THAT IS, UNPROCESSE D MEAT FROM VARIOUS FARMERS OR THE MEAT PRODUCERS, WHO ARE REGISTERED WITH ASSOCIATIONS CALLED 'JAMAT' AT BELGAUM AND KAKINADA. AFTER PROCURING THE RAW MEAT THE SAME IS PROCESSED AT THESE PLACES AND ARE PLACED IN CARTON AND THEREAFTER ALL THE FINISH GOODS ARE BROUGHT TO MUMBAI FOR EXPORT. AT THE ASSESSMENT STAGE, THE MAIN CONTROVERSY INVOLVED WAS THE GENUINENESS OF THE PURCHASES ON THE GROUND THAT THE CASH MEMOS WERE NOT PROPER AND WERE NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCES. THE ASSESSING OFFICER HAD M ADE THE DISALLOWANCE OF PURCHASES FOR SUMS AGGREGATING TO RS.39,59,07,962/ - WHICH WERE MADE FROM THE FOLLOWING PARTIES: - S. NO. NAME OF THE PARTY QUANTITY IN KGS AMOUNT IN RS . 1 BELGAUM 4,37,186 22,30,70,923 2 ZAIB 6,10,376 6,65,27,707 3 SHEHNAZ EN T ERPRISES 7,49,735 7,35,07,686 4 M.S. TRADERS -- 95,00,000 5 ZAIN ENTERPRISES -- 84,56,392 6 ZAIB ENTERPRISES -- 1,16,57,041 7 TRANSPORT CHARGES -- 31,88,213 BEFORE THE LD.CIT(A), THE ASSESSEE HAD SUBMITTED THE CONFIRMATIONS LETTERS FROM THESE PARTIES/ASSOCIATION , COPY OF STOCK REGISTER, SALES AND PURCHASE REGISTER. THE PAYMENT S MADE TO THE PURCHASE PARTY WERE RECONCILED DURING THE COURSE OF THE REMAND PROCEEDINGS. IN THE REMAND REPORT, THE AO AS WELL AS JCIT, HAVE CONFIRMED THE RECONCILIATION OF THE PURCHASES AS DEBITED IN THE BOOKS OF ACCOUNT WHICH IS EVIDENT FROM THE EXTRACT INCORPORATED FROM THE PAGE 16 OF THE APPELLATE ORDER, IN THE FOREGOING PARAGRAPH. THE LD.CIT(A), HOWEVER HAS PROCEEDED TO MAKE THE DISALLOWANCE AFTER INVOKING THE PROVISION OF SECTION 40A(3) . THE MAIN REASONS FOR INVOKING THE PROVISION OF SECTION 40A(3) WAS THAT, THE PURCHASES MADE FROM THE MARKET WERE IN CASH WHICH WERE NOT FULLY VERIFIABLE AS THEY WERE MADE ON SELF MADE CASH VOUCHERS, WHICH DID NOT CONTAIN ADDRESSES, PROPER SERIAL NUMBER, A ND WERE UNDATED AND UNSIGNED. THE CERTIFICATES FURNISHED BY THE ASSESSEE FROM JAMAT ASSOCIATION ALSO DOES NOT PROVE THAT THEY WERE THE AGENTS, BECAUSE THE M/S. GEE SQUARE EXPORTS 4 PURCHASES HAVE BEEN MADE FROM 'BEPARI' WHO ARE TRADERS ONLY. ANOTHER JUSTIFICATION GIVEN BY HIM WAS T HAT, THE ASSESSEE HAS FAILED TO PRODUCE PROPER CERTIFICATE FROM VETERINARY DOCTOR AS REQUIRED IN THE CONDITIONS PROVIDED IN CIRCULAR NO. 8 OF 2006 GIVEN IN RESPECT OF RULE 6DD (F). LASTLY THE IDENTITY OF THE SUPPLIERS AND THE RECIPIENTS OF THE CASH PAYMENT AND THE OVERALL GENUINENESS OF THE PURCHASES HAVE NOT BEEN CONCLUSIVELY PROVED BY THE ASSESSEE. 12. IN WAKE OF THESE OBSERVATIONS OF LD.CIT(A), WE HAVE PERUSED THE RECORDS AND FIND THAT THE PAYMENTS HAVE BEEN MADE TO PERSONS LIKE, SHEHNAZ ENTERPRISES, ZAI B ENTERPRISES, ZAIN ENTERPRISES, M.S. TRADERS AND VARIOUS ASSOCIATION AT BELGAUM. ALL THESE PAYMENTS HAVE BEEN MADE IN CASH. THE CONFIRMATION CERTIFICATE FROM M/S. SHEHNAZ ENTERPRISES GOES TO SHOW THAT, THEY HAVE PROCURED THE RAW MEAT FROM VARIOUS MEAT PRO DUCERS IN AND AROUND BELGAUM ON CASH PAYMENTS AS THE MEAT PRODUCERS WILL SUPPLY ONLY ON CASH PAYMENT. IT WAS IN THIS BACKGROUND THE ASSESSEE HAS MADE THE CASH PAYMENT. SIMILARLY, THE CASH PAYMENTS HAVE BEEN MADE TO VARIOUS ASSOCIATION ONLY FOR THE PURCHASE OF RAW MEAT. IT IS NOT THE CASE OF THE LD.CIT(A) THAT THE PURCHASES HAVE BEEN MADE FOR, OTHER THAN THE PROCUREMENT OR PURCHASE OF RAW MEAT. PROVISO TO SECTION 40A(3) PROVIDES THAT NO DISALLOWANCE U/S 40A(3) SHALL BE MADE, IF THE PAYMENT IN CASH HAS BEEN M ADE IN CIRCUMSTANCES PROVIDED IN RULE 6DD. THE CLAUSE (E)(II) OF RULE 6DD PROVIDES EXCEPTION ON CASH PURCHASES ON PRODUCE OF ANIMAL HUSBANDRY. IF THE PAYMENT HAS BEEN MADE IN CASH FOR THE PURCHASE OF MEAT WHICH IS NOTHING BUT A PRODUCT OF ANIMAL HUSBANDRY, THEN IN OUR OPINION THE SAME FALLS WITHIN THE EXCEPTION PROVIDED IN CLAUSE (E)(II) OF RULE 6DD, WHICH READS AS UNDER: - (E) 'WHERE THE PAYMENT IS MADE FOR THE PURCHASE OF - (I) ............ (II) THE PRODUCE OF ANIMAL HUSBANDRY (INCLUDING LIVESTOCK, MEAT, H IDES AND SKINS) OR DAIRY OR POULTRY FIRMING; OR' FOR GETTING THE BENEFIT UNDER THE EXCEPTION CLAUSE AS STATED ABOVE, THERE IS NO SUCH CONDITION LAID DOWN UNDER THE RULES. THE ONLY CONDITION IS THAT THE PAYMENT SHOULD BE MADE FOR THE PURCHASE OF PRODUCE OF ANIMAL HUSBANDRY LIKE MEAT ETC. THUS IF THE PAYMENT HAS BEEN MADE FOR ITA NO. 6606/MUM/2013 17 GEE SQUARE EXPORTS ASSESSMENT YEAR: 2009 - 10 THE PURCHASE OF MEAT THAN SUCH A PAYMENT CAN BE MADE IN CASH EXCEEDING RS.20,000/ - THE BOARD CIRCULAR NO. 8 OF 2006 P ROVIDE CERTAIN CONDITIONS SO AS TO FALL WITHIN THE BENEFIT OF RULE 6DD SUCH CONDITIONS ARE AS UNDER: - 'THE BOARD AFTER EXAMINATION OF THE ISSUE IS OF THE VIEW THAT ANY PERSON, BY WHATEVER NAME CALLED, WHO BUYS ANIMALS FROM THE FARMERS, M/S. GEE SQUARE EXPORTS 5 SLAUGHTERS THEM AND THEN SELLS THE RAW MEAT CARCASSES TO THE MEAT PROCESSING FACTORIES OR TO THE TRADERS/RETAIL OUTLETS WOULD BE CONSIDERED AS PRODUCER OF LIVESTOCK AND MEAT. 4. THE BENEFIT OF RULE 600 OF THE INCOME - TAX RULES, 1952 SHALL BE AVAILABLE TO THE PERSON REFERRED T O AT PARA 3 ABOVE SUBJECT TO FURNISHING OF THE FOLLOWING : (I) A DECLARATION FROM THE PERSON RECEIVING THE PAYMENT THAT THE IS A PRODUCER OF MEAT; (II) A CONFIRMATION THAT THE PAYMENT, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT , WAS MADE ON HIS INSISTENCE; AND (III) A FURTHER CONFIRMATION FROM A VETERINARY DOCTOR CERTIFYING THAT THE PERSON SPECIFIED IN THE CERTIFICATE IS A PRODUCER OF MEAT AND THAT SLAUGHTERING WAS DONE UNDER HIS SUPERVISION.' FIRST OF ALL, THE PROVISIONS OF TH E STATUTE OR RULES DOES NOT PROVIDE ANY SUCH CONDITIONS AS SPELLED OUT IN THE BOARD CIRCULAR AND THEREFORE SUCH CIRCULAR PUTTING RESTRICTIVE CONDITIONS CANNOT BE FOLLOWED. CBDT CIRCULARS ARE MAINLY TO REMOVE THE RIGOURS OF THE LAW BY EXPLAINING THE CORRECT INTERPRETATION. THEY CANNOT LAY DOWN THE CONDITIONS WHICH RESTRICT THE APPARENT CONDITION LAID DOWN IN THE STATUTORY PROVISIONS OR THE RULES. 13. THE LAW ONLY PROVIDES THAT, IF THE PAYMENT IS MADE IN CASH FOR PURCHASE OF PRODUCE OF ANIMAL HUSBANDRY LIKE M EAT ETC., THEN NO DISALLOWANCE AND U/S 40A(3) IS CALLED FOR. RULE DOES NOT PROVIDE THAT CBDT SHOULD LAY DOWN THE CONDITIONS UNDER THIS CLAUSE. IN ANY CASE IT IS NOT IN DISPUTE IN THE PRESENT CASE THAT THE ASSESSEE HAS PURCHASED THE MEAT FROM VARIOUS PERSON S WHICH HAVE BEEN EXPORTED. THIS IS FURTHER ITA NO. 6606/MUM/2013 18 GEE SQUARE EXPORTS ASSESSMENT YEAR: 2009 - 10 CERTIFIED BY CERTIFICATE ISSUED BY DEPARTMENT OF ANIMAL HUSBANDRY GOVERNMENT OF MAHARASHTRA WHICH READS AS UNDER: - TO WHOM IT'MAY CONC ERN THIS IS TO STATE THAT, THE HEALTH CERTIFICATE OF MEAT FOR EXPORT PURPOSE IS ISSUED UNDER RAW MEAT (CHILLED & FROZEN) UNDER THE EXPORT (QUALITY CONTROL AND INSPECTION) ACT ,1963. AS PER THE DGFT NO TIFICATION NO. 82 DT. 31.10.11 EXPORT OF MEAT AND MEAT PRODUCT IS PERMITTED SUBJECT TO MATERIAL OR MEAT HAS BEEN SOURCED FROM APEDA REGISTERED INTEGRATED ABATTOIRS OR FROM APEDA REGISTERED MEAT PROCESSING PLANT. M/S. GEE SQUARE EXPORTS 6 PRESENTLY, FOR APPLYING OR OBTAINING HEALTH CERTIFICATE OF BUFFALO MEAT FOR EXPORT PURPOSE, THE EXPORTER HAS TO SUBMITTED ALONG WITH APPLICATION AND, DECLARATION, THE A.M./ P.M. CERTIFICATE OF SLAUGHTERED ANIMAL DULY SIGNED BY VETERINARIAN OF APEDA APPROVED SLAUGHTER HOUSE. HEALTH CERTIFICATE IS REQ UIRED FOR EXPORT SHIPMENT OF FROZEN BUFFALO MEAT. SD/ - SIGNATURE DR. D.S. KAMBLE M.V. SC. DY. COMM. OF ANIMAL HUBANDRY QUALITY CONTROL LABORATORY AAREY, GOREGAON, MUMBAI - 54. THE AFORESAID CERTIFICATE DULY CERTIFIES THAT FOR THE PURPOSE OF EXPORT OF RAW MEAT, THE MEAT HAS TO BE SOURCED FROM APEDA REGISTERED INTEGRATED ABATTOIRS OR FROM APEDA REGISTERED MEAT PROCESSING PLANT AND A CERTIFICATE FROM VETERINARIAN OF APEDA APPROVED SLAUGHTER HOUSE. THUS, THE ASSESSEE CLEARLY FULFILS THE CONDITIONS FOR EXPORTI NG THE MEAT. THE ASSESSEE HAD ALSO FURNISHED A CERTIFICATE FROM VETERINARY DOCTOR, BEFORE THE LD.CIT(A),WHO HAS MAINLY REJECTED ON THE GROUND THAT, THE SAME IS NOT IN THE FORMAT AS INSTRUCTED BY THE BOARD CIRCULAR. THIS CANNOT BE THE REASON FOR DRAWING ANY ADVERSE INFERENCE TO DENY BENEFIT UNDER RULE 6DD, IF OTHERWISE ALL THE CONDITIONS STANDS FULFILLED, WHICH IS BY AND LARGE IN THE SPIRIT OF CBDT GUIDELINES. THUS IN OUR OPINION, THE ITA NO. 6606/MUM/2013 19 GEE SQUARE EXPORTS ASSESSMENT YEAR: 2009 - 10 ASSES SEE'S CASE FALLS WITHIN THE BENEFICIAL CLAUSE OF EXCEPTIONS PROVIDED IN RULE 6DD, CLAUSE(E)(II) AND THEREFORE, NO DISALLOWANCE U/S 40A(3) CAN BE MADE. ACCORDINGLY THE DISALLOWANCE OF RS.26,79,20,745/ - AS MADE BY LD. CIT(A) STANDS DELETED. 21. FACTS OF THE APPELLANTS CASE DURING THE YEAR UNDER CONSIDERATION, THE ADDITION MADE BY THE ASSESSING OFFICER AND THE REASONS FOR MAKING THE ADDITIONS ARE SIMILAR TO THE FACTS OF THE APPELLANTS CASE FOR A.Y. 2009 - 10. THE ONLY DIFFERENCE IS THAT DURING THE YEAR UNDER CONSIDERATION, IN ADDITION TO DISALLOWANCE OF CASH PAYMENTS U/S. 40(A)(3), THE ASSESSING OFFICER HAS ALSO DISALLOWED PAYMENTS MADE THROUGH BEARER CHEUQUES, U/S. 40A(3) OF THE I.T. ACT. THE PAYMENT BY BEARER CHEQUES IS AS GOOD AS PAYMENT TROUGH CASH. THEREF ORE ALL THE OBSERVATIONS OF THE DECISION OF THE HON'BLE JURISDICTIONAL ITAT, MUMBAI AS REPRODUCED ABOVE, IN THE APPELLANTS OWN CASE FOR A.Y. 2009 - 10, ARE EQUALLY APPLICABLE TO THE PAYMENTS MADE THROUGH CHEQUES ALSO. RESPECTFULLY FOLLOWING THE ORDER OF TH E ITAT, MUMBAI AS ABOVE, IT IS HELD THAT THE CASE OF THE APPELLANT FALLS WITHIN THE EXCEPTIONS PROVIDED UNDER RULE 6DD CLAUSE (E)(II) OF THE I.T. RULES I.E. WHERE THE PAYMENT IS MADE FOR THE PURCHASE OF THE PRODUCE OF ANIMAL HUSBANDRY (INCLUDING LIVESTOCK , MEAT HIDES AND SKIN) M/S. GEE SQUARE EXPORTS 7 OR DAIRY OF POULTRY FARMING TO THE PRODUCER OF SUCH PRODUCTS AND THEREFORE, NO ADDITION U/S. 40A(3) OF THE I.T. ACT CAN BE MADE IN ITS CASE. THEREFORE THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AMOUNTING TO ` 7,81,19,134/ - & ` 7 ,63,95,953/ - IS DIRECTED TO BE DELETED. 5. THE PROVISIONS OF SEC. 40A(3) PROVIDES A LIMIT OF RS.20,000/ - FOR PAYMENTS TOWARDS EXPENSES BY WAY OF CASH AND MANDATES THAT THE PAYMENTS IN EXCESS OF THE ABOVE SAID AMOUNT SHALL BE PAID BY WAY OF ACCOUNT PA YEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT. ANY PAYMENT MADE IN VIOLATION OF PROVISIONS OF SEC. 40A(3) SHALL BE DISALLOWED. THE PROVISIONS OF RULE 6DD LISTS OUT EXCEPTIONS TO THE PROVISIONS OF SEC. 40A(3), I.E., THE TYPES OF PAYMENTS LISTED OUT IN RULE 6DD C AN BE PAID BY WAY OF CASH AND SUCH PAYMENTS SHALL NOT BE HIT BY THE PROVISIONS OF SEC. 40A(3), I.E., SUCH PAYMENTS ARE NOT REQUIRED TO BE DISALLOWED U/S 40A(3) OF THE ACT. AS NOTICED EARLIER, THE PAYMENTS MADE FOR PURCHASE OF THE PRODUCE OF ANIMAL HUSBAND RY (INCLUDING LIVESTOCK, MEAT, HIDES AND SKINS) OR DAIRY OR POULTRY FARMING IS COVERED BY RULE 6DD(E )(II) OF THE IT RULES. SIMILARLY PAYMENT MADE FOR PURCHASE OF FISH OR FISH PRODUCTS ARE COVERED BY RULE 6DD(E)(III) OF THE RULES. 6. WE NOTICE THAT T HE TRIBUNAL , IN AY 2009 - 10 HAS GIVEN A CATEGORICAL FINDING THAT THE PURCHASE OF MEAT, MUTTON ARE THE PRODUCE OF ANIMAL HUSBANDRY AND IS COVERED BY THE EXCEPTION PROVIDED UNDER RULE 6DD(2)(II) OF THE I.T RULES. WE NOTICE THAT THE ASSESSING OFFICER HAD PLAC ED HIS RELIANCE IN THAT YEAR ON A CIRCULAR ISSUED BY CBDT, WHEREIN THE CBDT HAD PRESCRIBED CERTAIN PROCEDURES TO BE FOLLOWED WHILE EFFECTING PURCHASES OF ANIMAL HUSBANDRY PRODUCTS. THE AO HAD OBSERVED THAT THE ASSESSEE HAS FAILED TO OBSERVE THOSE PROCEDUR ES AND HENCE NOT ELIGIBLE TO CLAIM BENEFIT OF RULE 6DD OF IT RULES. HOWEVER, T HE TRIBUNAL HAS HELD THAT THE NON - COMPLIANCE OF SUCH PROCEDURES WILL NOT DIS ENTITLE THE ASSESSEE FROM CLAIMING THE BENEFIT OF EXCEPTIONS PROVIDED IN RULE 6DD, SINCE NEITHER THE INCOME TAX ACT NOR THE INCOME TAX RULES PRESCRIBE ANY SUCH PROCEDURE. THUS, WE NOTICE THAT THE VARIOUS REASONING GIVEN BY THE AO FOR MAKING IMPUGNED DISALLOWANCE HAS BEEN STRUCK DOWN BY THE TRIBUNAL. IN THE INSTANT YEAR ALSO, THE AO HAS GIVEN IDENTICAL R EASONING FOR MAKING M/S. GEE SQUARE EXPORTS 8 DISALLOWANCE U/S 40A(3) OF THE ACT AND THUS THERE IS NO CHANGE IN FACTS . HENCE WE ARE OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN FOLLOWING THE DECISION RENDERED BY THE TRIBUNAL WHILE DELETING THE IMPUGNED ADDITIONS. ACCORDINGLY W E CONFIRM HIS ORDER PASSED ON THIS ISSUE . 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 13 . 1 2 .201 7. SD/ - SD/ - (RAMLAL NEGI ) (B.R.BASKARAN) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI ; DATED : 13 / 1 2 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY // ( ASSTT. REGISTRAR /SENIOR PS ) PS ITAT, MUMBAI