2010 (8) TMI 999 - AT - Income Tax

Summary

Issues Involved:
1. Erroneous order of CIT(A) as per law and facts.
2. Delay in furnishing information by the assessee.
3. Incorrect consideration of suppliers as farmers by CIT(A).
4. Acceptance of documentation by CIT(A) despite ITAT's previous findings.
5. Any other grounds raised during the hearing.

Summary:

Issue 1: Erroneous Order of CIT(A)
The revenue contended that the order of the CIT(A) was erroneous as per law and facts. However, the Tribunal found that the CIT(A)'s order was consistent with the Tribunal's findings for the assessment year (A.Y.) 2002-03, where similar issues were raised and decided in favor of the assessee.

Issue 2: Delay in Furnishing Information
The revenue argued that the assessee should have produced the suppliers of paddy during the assessment proceedings and that the delay in furnishing the required information was attributable to the assessee. The Tribunal noted that the facts of the case were identical to those in A.Y. 2002-03, where the Tribunal had already decided the matter in favor of the assessee, holding that payments made to commission agents representing the farmers were covered by the exemption under clause-f of rule 6DD.

Issue 3: Incorrect Consideration of Suppliers as Farmers
The revenue claimed that the CIT(A) incorrectly considered all suppliers as farmers despite the assessee's inability to distinguish between farmers and agents. The Tribunal reiterated its previous decision from A.Y. 2002-03, where it was concluded that the commission agents were representatives of the farmers, thus qualifying for the exemption under clause-f of rule 6DD.

Issue 4: Acceptance of Documentation by CIT(A)
The revenue contended that the CIT(A) should not have accepted the documentation provided by the assessee, as it was aimed at avoiding the provisions of section 40A(3) of the Income-tax Act. The Tribunal, however, found that the documentation and books of account were genuine and that the payments made to commission agents were covered by the exemption under clause-f of rule 6DD, as previously decided in A.Y. 2002-03.

Issue 5: Any Other Grounds
No additional grounds were raised during the hearing.

Conclusion:
The Tribunal dismissed the revenue's appeal, confirming the CIT(A)'s order, which was in line with the Tribunal's previous decision for A.Y. 2002-03. The Tribunal found no infirmity in the CIT(A)'s order and upheld the exemption under clause-f of rule 6DD for payments made to commission agents representing the farmers. The appeal of the revenue was dismissed, and the decision was pronounced in the open court on 19.8.2010.