9911796707
TMI Blog2013 (7) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... e payee on behalf of the assessee, in the capacity of agent?" The assessee, a partnership firm, was engaged in the business of cotton ginning during the previous year. The assessee filed the return of income for the assessment year 1998-99 on December 31, 1999, declaring a total income of Rs. 11,540. The case was taken up for scrutiny. On a perusal of the books of account produced by the assessee-firm, the Assessing Officer noticed that some payments exceeding Rs. 20,000 were made by the assessee in cash during the previous year towards purchase of raw cotton. This payment, according to the Assessing Officer, was in violation of the provisions of section 40A(3) of the Income-tax Act. The assessee claimed that the persons to whom the disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said person for the assessment year 1998-99, has found that the credit side of the profit and loss account shows the receipts from agriculturists as cotton commission receipts and receipts from the bidders as merchant commission. The Commissioner of Incometax (Appeals) also examined the sales tax assessment orders and found that the sales tax made therein was to the effect that the total turnover as per the accounts representing the local sales of the cotton kappas as agents of agriculturists/principals. Therefore, considering all these factual circumstances, and also by observing that either the genuineness of the transaction or the authentication of the sales tax order by the Sales Tax Department indicating that the society as well as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 82 ITR 117 (Mad). Aggrieved against the said order of the Tribunal the Revenue filed the above appeal before this court, however, confining its dispute only with regard to the payments made in cash to M/s. P. K. R. Murugan Commission Mundy, to the extent of Rs. 66,64,100 and to Tiruchengode Agricultural Producers Marketing Society Ltd., in respect of the payment to the extent of Rs. 54,22,101. Heard the learned counsel appearing for the Revenue. There was no representation for the assessee. In this appeal, the Revenue is contesting against the payments made by the assessee in cash to M/s. P. K. R. Murugan Commission Mundy and to Tiruchengode Agricultural Producers Co-operative Marketing Society alone on the reason that such payments viol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee were agents of the assessee and such payment also did not appear to have been made on behalf of the assessee. On the other hand, the first appellate authority had gone into the factual aspects in detail and found that those persons were only agents of the assessee and, consequently, he ordered the deletion of the addition made by the Assessing Officer. The first appellate authority had elaborately discussed at paragraph 4.2 of his order about the nature of the transaction done by the said co-operative society and also by perusing the letter dated April 25, 2003, of the co-operative society, he found that element of sale was not present in the transaction with the bidders as well as the agriculturists. In the absence of an element of sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity as well as by the Tribunal by holding that those persons have acted as agents of the assessee, we have no hesitation in holding that the assessee is entitled to protection under rule 6DD(i) of the said Rules as the disputed payments were made only to its agents. Apart from that aspect, by going through the nature of business and transaction between the parties, an element of commercial expediency was also involved in this case, which we can take judicial notice. There are no other materials placed before us by the Revenue to take a different view, moreover when those findings rendered by the first appellate authority as well as the Tribunal is totally a finding of fact, we are not inclined to interfere with the same. Consequently, we f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
