Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (9) TMI 534 - AT - Income TaxViolation of provisions of section 40A(3) of the Income Tax Act read with Rule 8DD - Payment in cash - Assessee is a 100% Exporter of fish and fish products which are allowed to be purchased in cash as per the provisions of Rule 6DD Held that:- Assessee is covered by sub-clause (3) of Rule 6DD when fish or fish products can be purchased in cash and the payment can be made to the cultivators, grower or producers of such articles produced or products when the producers of fish or fish products has been specifically defined would include besides the fisherman any headman of fishermen, who sorts the catch of fish brought by fishermen from the sea, at the sea-shore itself and then sells the fish or fish products to traders, exporters, etc As per genuineness and the business practices insofar as the assessee being an exporter of such magnitude would have received all payments by way of export in bank which he would have withdrawn from the bank for incurring such expenditure - Intention of the legislation to allow benefit to such exporter keeping in mind the cash is incurred for procuring fish and fish products was delicate and risk involved therein was to be allowed Decided in favor of Assessee. Restricting the seeds purchase in cash to10% being the wild seeds Held that:- Business conducted by the assessee is of such magnitude that it was nobody's case that wild seeds has to sprout in accordance with the arithmetical projection - Other purchases being the fish and fish products insofar as he explained that the value of the hatchery seeds which is higher and the wild seed may or may not grow was nobody's case which was again at the mercy of the nature when the seller of the prawn seeds also raises his hand for not hatching into prawns of desired quality. Therefore, keeping in view the magnitude of the export made by the assessee that 10% sustenance on account of seed purchase is fit for deletion. Disallowance u/s 40A(3) of the Income Tax Act Held that:- Various facts leading to this part sustenance of the disallowance not maintainable insofar as payment for diesel, labour and places where banking facilities are not available are allowed under the provisions of Rule 6DD - There is no violation of Rule 46A insofar as the learned CIT(A) had on the basis of finding tried to assign a percentage for sustaining the disallowance which is not in accordance with the provisions of the I.T.Act for disallowance u/s.40A(3) - Directed the Assessing Officer to delete the addition so made and partly sustained by the learned CIT(A) on the issues as mentioned.
|