TMI Blog1997 (5) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... ales as shown ? (ii) Whether, on the facts and in the circumstances of the case, there was material before the Tribunal to hold that the assessee's case comes within the meaning of the exceptions contemplated in rule 6DD of the Income-tax Rules, 1962 ? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in deleting the disallowance of Rs. 91,926 made by the Income-tax Officer under section 40A(3) of the Income-tax Act, 1961 ? " The assessee, a registered firm, derives income from sale of Ayurvedic medicines. The proceedings relate to the assessment year 1971-72. The assessee disclosed a gross profit rate of 11 per cent. in respect of sales both at the head office and in the branch office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingredients of section 40A(3) having not been complied with, payments for purchases were rightly disallowed under section 40A(3), read with rule 6DD(j). The assessee then appealed to the Appellate Tribunal which did not record a clear finding on the question whether the price paid for purchases amount to expenditure stating that the appeal could be disposed of on other grounds. The Appellate Tribunal, however, accepted the contention of the assessee that no addition could be made by the assessing authority under section 40A(3) of the Act as no deduction was claimed in respect of purchases. The Tribunal observed that the Assessing Officer rejecting the assessee's trading results under the proviso to section 145(1) of the Act had computed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rything and there was no need for the Assessing Officer to make scrutiny of the amount incurred on the purchases by the assessee. No law contrary to the view taken by the Tribunal has been shown by standing counsel. In the alternative, the Tribunal recorded a finding on the ingredients of section 40A(3) and rule 6DD(j). Since we have agreed with the primary finding recorded by the Tribunal, we think it is not necessary for us to go into the alternative finding recorded by the Tribunal. With these observations, questions Nos. 1 and 3 are answered in the affirmative, that is, in favour of the assessee and against the Revenue. Question No. 2, on which finding was recorded in the alternative, is returned unanswered. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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