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TMI Blog2017 (9) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... g twenty thousand rupees otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft, twenty per cent of such expenditure shall not be allowed as a deduction : Provided that where an allowance has been made in the assessment for any year not being an assessment year commencing prior to the 1st day of April, 1969, in respect of any liability incurred by the assessee for any expenditure and subsequently during any previous year the assessee makes any payment in respect thereof in a sum exceeding twenty thousand rupees otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft, the allowance originally made shall be deemed to have been wrongly made and the Assessing Officer may recompute the total income of the assessee for the previous year in which such liability was incurred and make the necessary amendment, and the provisions of section 154 shall, so far as may be, apply thereto, the period of four years specified in sub-section (7) of that section being reckoned from the end of the assessment year next following the previous year in which the payment was so made : Provided further that no disallowance under this sub-section shall be made whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied that the benefit of rule 6DD of the Income-tax Rules, 1952 shall be available to any person, by whatever name called, who buys animals from the farmers, slaughters them and then sells the raw meat carcasses to the meat processing factories or to the traders/retail outlets would be considered as producer of livestock and meat subject to furnishing of the following :- (i) A declaration from the person receiving the payment that he is a producer of meat; (ii) A confirmation that the payment, otherwise than by an account payee cheque or account payee bank draft, was made on his insistence; and (iii) A further confirmation from a veterinary doctor certifying that the person specified in the certificate is a producer of meat and that slaughtering was done under his supervision. 6. The Assessee is a partnership firm. It is engaged in the business of supplying dressed meat to Defence/Military Authorities in different parts of the country on the strength of Annual Contracts entered into with those authorities. It is not in dispute that meat would be a product of animal husbandry falling within the ambit of Rule 6DD(f)(ii) of the Rules. In the course of assessment proceedings for AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the AO has disallowed even the self cheques drawn by the assessee for the utilization of cash for day-to-day requirements. Therefore, he requested to delete the addition made by the Revenue authorities. 5. On the other hand, the ld. DR relied on the orders of the Revenue authorities. 6. After hearing the rival submissions and on careful consideration of the materials available on record, it is observed that the certificate placed at page 116 of paper book on which the ld. AR relied upon, is not available with the ld. CIT(A). It is evident from the date of certificate that is 25th April, 2009 and the fact that the ld. CIT(A) has dismissed the appeal of the assessee by observing that the assessee has failed to furnish certificate before him., therefore, in the interest of justice, we set aside the matter to the file of the ld. CIT(A) for fresh consideration in view of the certificate on which the ld. AR has placed reliance upon. We further direct ld. CIT(A) to segregate the cash withdrawals made by the assessee for his day-to-day requirements from the disallowance made u/s 40A(3) of the IT Act." 9. The CIT(A) on remand by the Tribunal deleted the addition made by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersons from whom he purchased meat and supplied the same to the Military. The persons have filed certificates that (1) they insisted for cash payments (2) the slaughtering of the live stock was done in the presences of the Army Veterinary officers (3) that they buy the live stock from the farmers and get it slaughtered in the presences of the Army Veterinary officers. The Army Veterinary officers have certified that the slaughter took place in their presences. I therefore find that the appellant has been able to prove that the payments made by him to the suppliers for live stock was covered by the provisions of Rule 6DD of the IT Rules 1962. This view is fortified by the CBDT Circular no.8 of 2006 wherein the board has clarified that person who buys animal from farmers and slaughters them and then sells the raw meat is to be considered as a producer of live stock and meat for the purpose of Rule 6DD of the IT Rules 1962 and therefore the provisions of Section 40A(3) are not attracted when cash payments are made to such persons by the appellant. In view of the above circumstances I hold that the payments made for the purchase of met incurred in cash cannot be disallowed u/s 40A(3) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d appeal before the Learned Members of 'C' Bench, Kolkata has not only excided his given power of authority but also misused the same as a measure of his velour and defaulted himself under insubordination clause. 4. For that the Assessing Officer has erred in not giving appeal effect by way of ignoring the First Appellate Order passed by the CIT(Appeals)-XIX, Kolkata. The respondent craves leave to add, alter and/or to modify the Ground or Grounds of Cross Objection either before or at the time of hearing." 12. We have heard the rival submissions. The learned DR reiterated the stand of the revenue as reflected in the grounds of appeal. The learned DR also placed reliance on the decision of the Hon'ble Gujarat High Court in the case of CIT Vs. Valimohamed Ahmedbhai 134 ITR 214 (Guj.) wherein the Hon'ble Gujarat High Court held the mere fact that the notice of hearing of the appeal was given to the ITO would not meet the requirements of r. 46A. It is clear from the rule that the AAC should not have taken into account any evidence produced under sub-r. (1), unless the ITO had been allowed a reasonable opportunity to examine the evidence or to cross-examine the witness whose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1961, admit evidence of the death of Smt. Darshana Devi without giving any opportunity to the ITO to rebut the same as required under r. 46A of the IT Rules, 1962 " and the question " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the ITO was given reasonable opportunity to examine/rebut the evidence in the form of a death certificate of Smt. Darshana Devi " gives rise to a question of law and a reference u/s.256(2) was directed to be made by the Tribunal to the Hon'ble High Court. 14. We have given a careful consideration to the rival submissions and are of the view that there is merit in the appeals of the revenue. Provisions of Rule 46A of the rules reads thus: "Production of additional evidence before the Deputy Commissioner (Appeals) and Commissioner (Appeals) ]. 46A. (1) The appellant shall not be entitled to produce before the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals)], any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the Assessing Officer, except in the following circumstances, namely :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rule 46A(1) of the rules. As far as the contention of the learned counsel for the Assessee that u/s.250(4) of the Act, the CIT(A) has the power to make enquiries and that in exercise of such powers he has power to admit additional evidence even without confronting the same to the AO, is concerned, We are of the view that Sec.250(4) and Rule 46A of the Rules operate on totally different fields. While Sec.250(4) of the Act deals with power of the CIT(A) to make enquiries on his own before deciding an appeal, Rule 46A of the Rules lays down the manner in which or the restrictions subject to which the CIT(A) can exercise his power. We are of the view that while exercising such power u/s.250(4) of the Act, the CIT(A) would be subject to the restriction laid down in Rule 46A of the Act. In other words Sec.250(4) of the Act does not override the duty cast on the part of the CIT(A) to afford opportunity to the AO to have his say on the additional evidence produced by an Assessee before the CIT(A). We are therefore of the view that the issue should be remanded to the CIT(A) for the limited purpose to enable the CIT(A) to afford opportunity to the AO for verifying the veracity of the Cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase as in the said decision, the Hon'ble Court in the context of powers of an AO under the Wealth Tax Act, 1957, held that there was no provision under the said Act for the AO to insist on an opportunity of being heard. It cannot be said to be a precedent applicable to the proceedings before CIT(A) under the Act. The decision of Punjab & Haryana High Court in the case of CIT Vs. Kuldip Industrial Corporation 178 ITR 257 (P & H) is a case where it was held that the question " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the CIT (A) could, under s. 250(4) of the IT Act, 1961, admit evidence of the death of Smt. Darshana Devi without giving any opportunity to the ITO to rebut the same as required under r. 46A of the IT Rules, 1962 " and the question " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the ITO was given reasonable opportunity to examine/rebut the evidence in the form of a death certificate of Smt. Darshana Devi " gives rise to a question of law and a reference u/s.256(2) was directed to be made by the Tribunal to the Hon'ble High Court. The is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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