2023 (9) TMI 833 - ITAT DELHI

Addition u/s 40A - amount paid in cash for purchase of meat - HELD THAT:- In the present case the assessee could not establish that the purchase were made through agent.

CIT(A) before upholding the disallowance noted from the relevant fact that the cash purchase made from 54 individuals were in respect of purchase of frozen meat being a produce of raw meat that is processed for long term storage, was to be produced by meat processing undertakings having plant and machinery for converting raw meat into frozen meat.

Thus, we are in agreement to the conclusion drawn by the ld CIT(A) that frozen meat could be purchased only from the meat processing units and therefore, the said suppliers, who are claimed to be illiterate villages with no bank accounts, cannot be held as cultivators or producer of frozen meat. Therefore, the explanation of assessee being devoid of merits and far away truthful factual positions was rightly discussed by the ld AO CIT(A). Hence, the payment of assessee made in cash in violation of section 40A(3) of the Act is not eligible for benefit of exceptions envisages under Rules 6DD(f). Appeal of the assessee is dismissed.