2018 (7) TMI 1093 - HC - Income Tax

Disallowance made u/s 40A(3) - whether a payment of about ₹ 56 lakh made by the assessee to a country liquor vending centre would fall under the exception contained in Rule 6DD(b) - Held that -Tribunal noticed the matter in the appropriate perspective and referred to a judgment rendered by the same Tribunal in another case pertaining to country-spirit. Tribunal referred to a notification published in the Kolkata Gazette on September 20, 2005 where the warehouse from which a retail vendor obtained the country-spirit was identified as the warehouse for supply of country-spirit. The Tribunal agreed with the previous opinion rendered by it that in such a situation the payment in cash made to such a warehouse would be within the exception recognized in the relevant Rule. Since the Appellate Tribunal considered the matter in the appropriate perspective and based its decision on a Government notification by which the warehouse from which the assessee obtained country-spirit was the Government identified warehouse for the supply thereof, the matter does not call for any further consideration.

Summary

The Calcutta High Court dismissed appeal ITAT 103 of 2014 and GA 2127 of 2014. The payment made by the assessee to a country liquor vending center fell under the exception in Rule 6DD(b) of the Income Tax Rules, 1962, based on a Government notification identifying the warehouse for supply of country-spirit.