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TMI Blog2017 (5) TMI 1713X X X X Extracts X X X X X X X X Extracts X X X X ..... 302/- being 10% of administrative and other expense, out of the total disallowance of Rs. 14,08,597/-. The action of the Ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the said disallowance of Rs. 8,04,302/-. 2. In the facts and circumstance of the case and in law the Ld. CIT(A) ha erred in confirming the action of Ld. AO in disallowing electricity expenses of Rs. 11,56,945/- u/s 40A of the I.T. Act, 1961 out of the total disallowance of Rs. 13,37,643/-. The action of Ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the said disallowance of Rs. 11,56,945/-. 3. The assessee company craves i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts are audited under the provisions of Companies Act, as well as under the provisions of the Income-tax Act. In both these Audited Reports no remark for qualification is made by the auditors. Evidences of the expenses were found satisfactory by the auditors. Books of accounts were produced before the Assessing Officer during the course of assessment proceedings. These books had been accepted and were not rejected u/s 145(3) of the Act. He submitted that the Assessing Officer has mentioned that, he had conducted details scrutiny of various expenses debited to Profit and Loss Accounts under the Head Administrative and other Expenses. The Ld. Counsel has placed reliance on the Hon'ble Punjab and Haryana High Court rendered in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the exemption provided to Government under Rule 6DD(b) is available to the assessee. The Ld. Counsel further reiterated the submissions as made in the written brief. 4.2 On the contrary, the Ld. Departmental Representatives opposed the submission and submitted that the provisions are clear. There is no ambiguity into the provision and interpretation thereof. He submitted the order of the authorities below, is justified as the case of the assessee does not fall under exemption as prescribed under Rule 6DD of the Income-tax Rule, 1962. 4.3 We have heard the rival contentions, perused the material available on record. The Ld. CIT (A) affirmed the finding of the Assessing Officer in para 6.3 by observing as under:- "6.3 I find that ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as provisions are quite clear the decision have been rendered under the belief that if any Government Company qualifies to be state in term of Article 12 would be entitled for exemption under Rule 6DD(b). In our considered view, the provisions are clear for the sake of clarity Rule 6DD is reproduced as under:- "6DD. No disallowance under sub-section (3) of section 40A shall be made and no payment shall be deemed to be the profits and gains of business of profession under sub section (3A) of section 40A where a payment of aggregate of Payments made to a person in a day, otherwise than by an account payee cheque drawn on a bank or account payee bank draft, exceed twenty thousand rupees in the cases and circumstances specified hereunder, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 5 of the Banking Regulation Act, 1949 (10 of 1949), whether incorp9orated or not, which is established outside India; (d) Where the payment is made by way of adjustment against the amount of any liability incurred by the payee for any goods supplied or services rendered by the assessee to such payee; (e) Where the payment is made for the purchase of- (i) agricultural or forest produce; or (ii) the produce of animal husbandry (including livestock, meat, hides and skins) or diary or poultry farming; or. (iii) fish or fish products or (iv) the products of horticulture or apiculture, to the cultivator, grower or producer of such articles, produce or products; (f) where the payment is made for the purchase of the products m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanger against purchase of foreign currency or travelers cheques in the normal course of his business. Explanation- For the purposes of this clauses, the expressions' authorized dealer" or "money changer" means a person authorized as an authorized dealer or a money changer to deal in foreign currency or foreign exchange under any law for the time being in force.]" 4.5 From a bare reading of the above rules, it is clear that Banking Companies and such other Government Companies, which as per the legislation would remain exempt is given in the aforesaid provision. The terms state cannot be construed as Government as given in the aforesaid provision. The terms state, is used for a public purpose but for the purpose of interpretation of ru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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