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2008 (9) TMI 412 - AT - Income TaxDisallowance of cash payment u/s 40A(3) - suppliers of carcass - Cash payments by the agent for the purpose of purchase of products of animal husbandry on behalf of the assessee - right to object the point of dispute which was decided by the CIT(A) against the assessee though not appeal as per rule 27 of tribunal. HELD THAT:- Rule 27 of ITAT Rules is very specific and clear. Whatever point has been rejected by the CIT(A), the respondent assessee can support his argument against the appeal filed by appellant i.e., the Department. Though, the ld CIT(A) has rejected the claim of the assessee under cl. (f) of r. 6DD, but. as stated above, in view of r. 27 of ITAT Rules, the assessee can raise/support his claim. The ratios of decisions of the Hon'ble Supreme Court CIT vs. Mahalakshmi Textile Mills Ltd.[1967 (5) TMI 4 - SUPREME COURT] and that of Hon'ble Gauhati High Court In case of Assam Company (India) Ltd. vs. CIT [2002 (4) TMI 43 - GAUHATI HIGH COURT], are in support of the case of the assessee. Clause (f)(ii), reproduced in this order, is also very clear by which it has been provided that no disallowance can be made u/s. 40A(3) if the payments are made on account of purchase of animal produce including hide and skin. Undisputedly, the payments are made in respect of animal produce. Therefore, as per cl. (f)(ii) the claim of the assessee is also allowable. We further note that the issue is also covered by the decision in Jt. CIT vs. Al Noor Exports for AY 1997-98. In this case also AO made addition u/s. 40A(3) on account of payment made in cash for purchase of animal produce. CIT(A) deleted the disallowance in view of cl. (f)(ii) of r. 6DD of IT Rules. On second appeal, by the Department, the Tribunal confirmed the order of the CIT(A). Following the decision in the case of Al Noor Exports, we hold that no disallowance can be made u/s. 40A(3) on the facts of the present case. Accordingly, we confirm the order of the ld CIT(A). In the result, the appeal of the Revenue is dismissed.
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