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TMI Blog2011 (10) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 40A(3) ? [B] Whether the Appellate Tribunal is right in law and on facts and thereby holding that the action of the Assessing Officer in rejecting the books of account u/s. 145 was not proper and consequently deleting addition of Rs.18,18,889/- made by the Assessing Officer as assessee's profit? [C] Whether the Appellate Tribunal is right in law and on facts in deleting the disallowance of Rs.1,06,480/- made on account of depreciation on motor cars? 2. Heard learned counsel Mr.Manish Bhatt appearing for the Revenue. On closely examining the materials placed before this Court and having regard to the submissions made as also considering the orders of adjudicating authorities, for the reasons to be followed hereinafter, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h such farmer was paid for the milk sold by them at a fixed price depending upon the quality of the milk viz. fat contents and quality and this fact coupled with the fact that none has maintained any regular books of account, none has purchased the milk from the farmers independently and made over to the assessee, none of the entities maintained independent accounts of the farmers except he nothing of he milk contributed by the farmers in terms of quantity and quality viz. fat contents they were paid by the assessee through the persons who collected the milk from the farmers and supplied to the assessee. Accordingly, these noting in rough sheets can never by any stretch of imagination be equated to maintaining books of account etc. when con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excess of Rs.20,000/-, there was contravention of the provisions of Section 40A(3)and hence 20% of such cash purchases were added to the income of the assessee. The Tribunal was of the opinion that the Assessing Officer had specifically asked for the details of the purchase of jaggery and the proof of purchase as there was a direct purchase from various agriculturists. It also noted that the requisite material had been placed before the Assessing Officer with regard to the purchases of jaggery and copies of village form No.7/12 and 8A were also brought forth to prove the facts that they were purchased from the agriculturists. The Tribunal also noted that the same were duly covered under Rule 6DD(f)(i) of the Income Tax Rules and after due s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue, the same may not incur disqualification in terms of rejection of disallowance. 7. What can be found here in the case of the present assessee respondent is that the purchases of jaggery had been made by the assessee from the agriculturist themselves and there was sufficient proof adduced by the assessee. What can be further noted is that the said payment was made by way of cash and there was no cheque payment. However, the Tribunal after noting that such explanation is permissible and is covered duly under Rule 6DD(f) of the Income Tax Rules and also holding that when the Assessing Officer had subjectively satisfied himself with the identities of the persons, it correctly held that the jaggery is produced at village level where n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he gross profit of Ahmedabad branch of assessee-respondent to hold that merely because expenditure pertaining to one branch was accounted in another branch or just because certain sustainable grounds existed for earlier year's expenditure to be accounted this year in one branch, resulting into anomaly in the books of account, the books of account cannot be rejected nor would that permit the Assessing Officer to make estimation. Resultantly, this addition was quashed. Tribunal since has given cogent reasons and there being absolutely no infirmity in the findings arrived at for not sustaining the orders of both the authorities, this issue requires no further consideration. 8. As regards the 3rd question which relates to disallowance m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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