TMI Blog2015 (3) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... D and find support by clause (f) and (h) of Rule 6DD? - CIT(A) deleted this disallowance - Held that:- As is the settled position, even a payment to kacha aaratia is to be taken as a payment to the farmer as such aaratia holds agency relationship; he does not receive payment in his own right. We have also taken note of coordinate bench decisions in the cases of Shri Renkushwara Rice Mills vs ITO (2004 (8) TMI 319 - ITAT BANGALORE-B ) and DCIT Vs Hind Industries Ltd (2008 (9) TMI 413 - ITAT DELHI-C) which support this proposition. Once the payment is treated as having been made to the farmer, Section 40A(3) will not come into play. In view of these discussions, as also bearing in mind entirety of the case, we approve conclusions arrived at by the CIT(A) and decline to interfere in the matter. - Decided against revenue. Addition made u/s 40(a)(ia) - CIT(A) deleted addition - Held that:- Once it is accepted, as has been accepted by the CBDT itself, that Hon’ble Allahabad High Court in the case of CIT vs. Vector Shipping Services Pvt. Ltd. (2013 (7) TMI 622 - ALLAHABAD HIGH COURT) has decided this issue in favour of the assessee, the rigour of disallowance under section 40(a)(ia) mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndry creditors. I am here with surrendering ₹ 10,00,000/- subject to no penal action . . 3.3 I have considered the reply of the assessee, it is true that in the trade of adartia mostly payment has been made in cash. As account confirmations, names and addresses of the parties mentioned above have already been provided by the assessee, there appears a prima facie evidence to show that the said parties are real and having business relations with the assessee. Merely on the basis of not being income tax assessee or in absence of banking transaction, the identity of the creditor cannot be doubted. It is also true that the small traders and agriculturist living in small villages scare to come forward before any authority and scared to be examined on oath. Moreover, barring the credits surrendered by the assessee of ₹ 10,00,000/-. In these circumstances, it would be better to accept the surrender of the assessee as voluntary disclosure. Accordingly, the amount of ₹ 10,00,000/- is added to the income of the assessee. 4. Aggrieved by stand so taken by the Assessing Officer, assessee carried the matter in appeal before the CIT(A). Learned CIT(A) noted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d (h) of Rule 6DD. 9. So far as this grievance is concerned, it is sufficient to take note of the fact that when the Assessing Officer issued a show cause notice in respect of the cash payments aggregating to ₹ 23,47,561, it was pointed out by the assessee that the assessee is an aaratia and purchases the foodgrains from farmers or his agents i.e. kachcha aaratias. It was thus pointed out that the exceptions set out in rule 6DD(e) come into play and, accordingly, disallowance under section 40A(3), as proposed by the AO, cannot be made. Without assigning any reasons, the contentions of the assessee were simply brushed aside. The disallowance of ₹ 3,62,202, by excluding payments made on weekends, was made. Aggrieved, assessee carried the matter in appeal before the CIT(A). It was noted by the CIT(A) that the payments were made to the farmers or the kacha aaratias who defacto act as agents of the farmers and are simply conduits for payments. Under these circumstances, and taking note of the judicial precedents holding that section 40A(3) disallowances cannot be invoked in such cases, learned CIT(A) deleted this disallowance as well. The Assessing Officer is aggrieved an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR AT 23). The Assessing Officer is aggrieved and is in appeal before us. 14. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position.15. We find that as the assessee is in the jurisdiction of Hon ble Allahabad High Court, this issue is to be treated as covered in favour of the assessee by a decision of Agra bench of this Tribunal, in the case of DCIT Vs Gupta Overseas [2014] 42 taxmann.com 42 (Agra - Trib.), wherein the Tribunal has, inter alia, observed as follows: 38. We are, however, saved of taking this call as, at this stage, it is useful to take note of the CBDT Circular 10/DV/2013 [F No. 279/Misc/M 61/2012 - Section 40 (a)(i) of the Income Tax Act, 1961] dated 16th December 2013, which, inter alia, observes as follows: 3.3. The Hon ble Allahabad High Court in CIT Vs Vector Shipping Services Pvt Ltd [2013] 38 taxmann.com 77 (Allahabad) has affirmed the decision of the Special Bench in Merilyn Shipping that for disallowance under section 40(a)(ia) of the Act, the amount should be payable and not which has been paid during the year . 39. The sai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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