Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 1538 - AT - Income TaxDisallowance u/s 40A(3) - cash payments (in excess of ₹ 20,000 on each occasion) - purchase of its stock-in-trade (country liquor) - HELD THAT:- Identical issue with regard to the disallowance u/s 40A(3) of the Act in the case of assessee who are engaged in the business of country spirits who have paid purchases in cash had come up for consideration before this Bench in the case of Ramnagar Pachwai and C.S. (Shop) vs ITO [2016 (11) TMI 1034 - ITAT KOLKATA ] The payment made by the assessee retail vendor to the Principal, Government of West Bengal through its wholesale agent. The relationship between the assessee (authorized retailer) and Government of West Bengal (the supplier) acting under West Bengal Excise Rules through its Authorised Wholesaler Licensee (Agent), both defacto and dejure , is one of ‘Principal’ and ‘Agent’. We hold that the assessee retail vendor had made payment to the said agent (wholsesale licensee) would fall under the exception provided in Rule 6DD(k) of the Rules. We find that the assessee had made payments only to the customer of State Bank of India and not to State Bank of India. Hence the assessee’s case does not fall under the exception provided in Rule 6DD(a) of the Rules. We hold from the aforesaid findings that the assessee’s case falls under the exceptions provided in Rule 6DD(b) and Rule 6DD(k) of the Rules. In view of the aforesaid facts and circumstances and respectfully following the judicial precedents relied upon hereinabove, we have no hesitation in deleting the disallowance made u/s 40A(3) of the Act in all the years under appeal. - Decided in favour of assessee.
|