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2015 (4) TMI 336 - HC - Income TaxApplicability of provision of Section 40A(3) - purchase of fish in cash - Whether the Tribunal was justified in setting aside the order of the Appellate Tribunal which had disallowed 20% of the total purchases of fish on the ground that the entire purchases are made by cash contrary to sub-section (3) of Section 40A, when the payment of entire consideration by cash was not in dispute? - Held that:- The material on record discloses that the assessee procures fish from sea shore bordering Goa to Kochi and has been able to make export turn over of more than ₹ 10 crores. The 'producers' of 'fish or fish products' for the purpose of rule 6DD(e) of the Rules would include, besides the fishermen, 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. It is only when fish is purchased from a trader; broker or any other middleman, the benefit of the aforesaid provision is not available. The assessee is a trader/exporter of fish. The assessee has purchased the fish from the fishermen or the headman of the fisher and once the purchase is made of fish from the aforesaid persons, no disallowance under sub-section (5) shall be made, even if any portion in a sum exceeding twenty thousand rupees is made to a person in a day, otherwise than by a crossed cheque drawn on a bank or an crossed bank draft in the cases of bank draft. Therefore, the order passed by the Tribunal holding that Section 40A(3) is not attracted to the facts of this case, is proper and cannot be found fault with. - Decided in favour of the assessee.
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