TMI Blog2010 (8) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... cass is being made directly to the individual growers/villagers and farmers. 4. The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of the hearing. 2. At the outset ld. AR appearing on behalf of assessee pointed out that both the issues raised by the revenue in the present appeal are covered by the earlier orders of the Tribunal. So as it relates to issue raised by revenue in ground no. 2 it was pointed out by ld. AR that for A.Y. 2005-06 and 2006-07 similar disallowance was made, wherein commission paid to the Director of the assessee company was held to be paid in contravention of sec. 36(i)(ii). He, in this regard, referred to the order of the Tribunal dated 16th October, 2009 in ITA Nos. 3453 3454/Del/09, whereby order passed by CIT(A) giving the relevant relief to the assessee was upheld by dismissing the appeals filed by the revenue. He has placed a copy of the said order on our record and copy was also given to ld. DR. The issue was decided by the Tribunal vide para 5 6 of the said order and for the sake of clarity that the said paras are being reproduced below: - 5. In regard to ground no. 1 it was submitted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he remuneration it does not fall within the term Commission as provided in sec. 36(1)(ii) of the Act. In circumstances the finding of the ld. CIT(A) on this issue stands upheld. In circumstances the appeals of the revenue are dismissed. 3. However, ld. DR relied upon the order of AO. 4. We have heard both the parties on this issue. We found that the issue is covered by the aforementioned order of the Tribunal, wherein similar disallowance was made and it was held by the Tribunal that once the commission is authorize by the AGM to be a part of remuneration and the same was also approved by the department of company affairs then the commission does not fall within the scope of sec. 36(i)(ii). Respectfully following the same, we found no merit in ground no. 2 raised by the revenue and the same is dismissed. 5. So as it relates to ground no. 3. It was submitted by ld. AR that this issue is also covered by the order of the Tribunal dated 26th September, 2008 passed in ITA No. 1822/Del/07, wherein similar disallowance of ₹ 10,02,58,664/- was made for cash payments u/s 40A(3) of the Act and CIT(A) had deleted the said disallowance, whose order was upheld by the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim under clause (f) but allowed the claim of the assessee under clause (I) of Rule 6DD. The respective clauses of I.T. Rules under which the claim has been made are clauses (f) and (I) of Rule 6DD read as under: Rule 6DD: No disallowance under sub section (3) of sec. 40A shall be made where any payment in a sum exceeding (twenty thousand) rupees is made otherwise than by a crossed chequ drawn on a bank or by a crossed bank draft in the cases and circumstances specified hereunder, namely: - (f) where the payment is made for the purchase of (i) .; or (ii) the produce of animal husbandry (including hides and skins) or dairy or poultry farming; or . . . (I) where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person. After going through the contents of the respective clauses, as above, we find that the case of the assessee falls under both the categories i.e. clause (f) and clause (I). Clause (I) has been inserted by the IT (Twenty-first Amendment), Rules, 1995 w.e.f. 1.12.1995. The AO has disallowed the claim of the assessee in view of the decision of Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of taxable income of the assessee even on different basis other than the basis on which such disallowances are made. The Hon ble SC has further held that if for reasons recorded by the departmental authorities in respect of contentions raised by the assessee, grant of relief to him on another ground is justified, it would be open to the departmental authorities and the tribunal and indeed they would be under a duty to grant that. The right of the assessee to relied is not restricted to the plea raised by the assessee because the subject matter of the issue remains the same. In case of Assam Tea Co. (India) Ltd. Vs. CIT 256 ITR 423, the Hon ble Guwahati High Court has held that there is no prohibition in the Rules totally precluding the tribunal from considering any ground for the relief, beyond those mentioned in the memorandum of appeal filed by a partying the absence of an appeal or cross objection by the other side projecting the new ground and it is permissible on the part of the tribunal to entertain a ground beyond those incorporated in the memorandum of appeal though the party urging the said ground had neither appealed before it nor had filed cross objection in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Rule 6DD(f)(ii) is applicable only in respect of payments made to the producer of live animals or is ti also available to the person who has produced and supplied mutton to the assessee. Legally the word animal denotes any living creature may be defined as an organism which exhibits five forms of activities movement, sensation, nutrition, growth and reproduction. The word husbandary is applicable to a market garden as to a farm acable or pasture. Grazing Sheep has been held to be a purpose of husbandary in the case of Kekeir Vs. Gillespie 1920 SC 67. Keeping in view the above definitions if we were to interpret the word Animal Husbandry only, ignoring the words in rule 6DD(f), then it would mean a reference to the living creature. However, the Rule has to be read as a whle and not is piece meals. The rule provides for exceptions in the case of payments made for the purchase of produce of animals husbandary )including hides and skins) or dairy or poultry farming. It is evident from above that the rule making authority, in their wisdom, have provided exception for all the products of animal husbandary and not limited to the living creatures. It is reflected in the Rule when ..... X X X X Extracts X X X X X X X X Extracts X X X X
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