TMI Blog2010 (6) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances of the present case. 2. For that the ld. CIT(Appeals) was unjustified in holding that the order was passed within the stipulated time. 3. For that the ld.CIT(A) was unjustified in giving opinion that the AO would be free to take action in the hands of the recipients of the gifts under appropriate action as the direction is beyond his jurisdiction. 4. For that the ld. CIT(A) should have allowed the deduction of ₹ 60,000/- R.30,000/- wrongly disallowed by the AO u/s 40A(3) and his direction to examine afresh is beyond the jurisdiction as the evidences about payments though had been produced before him. 5. For that disallowance of labour payment invoking section 40(a)(ia) is justified, ille ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h on 13.07.2004 ₹ 25,000/- paid in cash on 19.11.2004 ₹ 25,000/- paid in cash on 07.03.2005 ₹ 30,000/- paid in cash on 15.03.2005 ₹ 30,000/- paid in cash on 29.03.2005 The AO has stated that cash payment exceeding ₹ 20,000/- on each occasion in respect of the above payments were made and accordingly disallowed 20% of it u/s 40A(3) of the Act and added back to the income of the assessee. Being aggrieved, the assessee is in appeal before the ld. CIT(A). 4.1. On behalf of the assessee, it was contended that the said payment aggregating to ₹ 1,60,000/- to Goffar Mollah was made on account of purchase of bricks which was covered by Rule 6DD (g) of IT Rules. The ld. CIT(A) has stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not be applicable in respect of the above payment made to Shri Goffar Mollah for purchase of bricks. He submitted that the above disallowance is not justified. 6. On the other hand, the ld. DR relied on the orders of the authorities below. 7. We have carefully considered the orders of the authorities below and the relevant clauses of Rule 6DD of IT Rules as applicable to the Assessment Year under consideration. 8. We find that the learned CIT(A) has referred to Rule 6DD(g) of the Income-tax Rules,1962. In Rule 6DD, as substituted from Assessment Year 200809 for existing rule 6DD by Income-tax (Eighth Amendment) Rules, 2007, clause (g) therein reads as under: (g) where the payment is made in a village or to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctured without aid of power and therefore, the payment is not disallowable u/s.40A(3) in view of the provisions contained in Rule 6DD(g) of the Act stood during the relevant Assessment Year under consideration and prior to the Income-tax (Eighth Amendment) Rules 2007,. which reads as under : (g) where the payment is made for the purchase of the products manufactured or processed without the aid of power in a cottage industry, to the producer of such products; Considering the above provision in Rule 6DD(g) stood during the relevant Assessment Year under consideration, we are of view that no disallowance under section 40A(3) will be made where payment is made to a producer ( in the present case Goffer Mollah, Prop. of Rubi Enterprise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the course of hearing the ld. AR referred to pages 9 to 15 of the paper book and submitted that the aggregate amount of ₹ 23,100/-was paid by the assessee to various puja committees and clubs which were in the vicinity of place where the assessee was carrying on the business. He submitted that the said payment was made to enable the assessee to carry on the business smoothly in the business interest. 11. The ld. DR has not controverted the above submissions of the assessee s claim and accepting the orders of the authorities below. 12. On consideration of the orders of the authorities below and the submissions of the ld. Representatives of the parties, we observe that the assessee has made such payments aggregati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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