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TMI Blog2018 (7) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... - - - Dated:- 4-7-2018 - Shri S.S. Godara, JM And Shri M.Balaganesh, AM For The Appellant : Shri A Bhattacharjee, Addl. CIT For The Respondent : Shri R.N. Ram ORDER Per M.Balaganesh, AM 1. This appeal by the Revenue arises out of the order of the Learned Commissioner of Income Tax(Appeals)-Asansol [in short the ld CIT(A)] in Appeal No. 278/CIT(A)/ASL/Ward-3(2)/Asl/15-16 dated 16.02.2017 against the order passed by the ITO, Ward-3(2), Purulia [ in short the ld AO] under section 143(3) of the Income Tax Act, 1961 (in short the Act ) dated 30.12.2010 for the Assessment Year 2008- 09. 2. The only issue to be decided in the appeal of the revenue is as to whether the ld CITA was justified in deleting the disallowance made u/s 40A(3) of the Act in the facts and circumstances of the case. 3. The brief facts of this issue is that the assessee is a partnership firm engaged in the business of trading in country spirit. The country spirit is an excisable commodity. Its purchase and sale are strictly controlled by the State Government. Previously, the retail dealers like the assessee used to deposit the cost price, excise duty, bottling charges etc in the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from country spirit bottling plants and in bulk from warehouses by the licensed wholesale vendors of the same for the purpose of selling country spirit by wholesale:- Rules 1. Short Title and commencement.-(1) These rules may be called the West Bengal Excise (Supply of Country Spirit on Payment of Duty) Rules, 2005. (2) These rules shall come into force from 19th October, 2005. 2. Definitions.-(1) In these rules, unless there is anything repugnant in the subject or context- ( i) Commissioner means the Excise Commissioner; ( ii) requisition means the requisition submitted by the authorized representative of licensed wholesale vendor of country spirit in Form II appended to these rules; ( iii) retail vendor means the person holding license in the prescribed form for retail vending of country spirit, granted by the Collector; 189; ( iv) State Government means the Government of West Bengal; ( v) the Act means the Bengal Excise Act, 1909 (Ben. Act V of 1909); ( vi) transport pass means the transport pass issued in Form III appended to these rules; ( vii) warehouse means the warehouse for supply of country spiri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cribed rate and other imposition, as may be prescribed by law, shall be paid by the retail vendor to the credit of the wholesale licensee concerned. ( 3) The authorized representative of the wholesale licensee shall realize the necessary amount of duty, cost price and bottling charge, if there be any, at the prescribed rate and such other imposition, as may be prescribed by law, from the retail vendor to whom country spirit is to be issued from the concerned warehouse. The authorized representative as above shall then submit requisition in duplicate in Form II appended to these rules to the Excise Officer-in-Charge of the warehouse separately for each of the retail vendors to whom country spirit is to be issued on the day. ( 4) On receipt of the requisition in Form II, the Excise Officer-in-Charge of the warehouse shall allow issue of country spirit from the warehouse. Duplicate copy of the requisition shall be returned to the authorized representative of the wholesale licensee after the issue has been made. ( 5) The Excise Officer-in-Charge of the warehouse shall issue transport pass to the retail vendor in Form III appended to these rules. ( 6) Notwith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue with specific reference to the West Bengal Excise Rules and Bengal Excise Act, case laws on the impugned issue and ultimately held as below:- 21. We find that M/s Asansol Bottling Packaging Co. Pvt Ltd is a bottling plant cum warehouse under Rule 2(vii) of The West Bengal Excise Rules 2005 with privilege granted u/s 22 of The Bengal Excise Act, 1909. At this juncture, it would be relevant to go into the definition of warehouse as provided under the State Excise Rules 2005 as below:- Warehouse , under Rule 2(vii) of the W.B.Excise Rules 2005 , means the warehouse for supply of country spirit to retail vendors, established at convenient places by the Commissioner at the expense of the State Government, or at the expense of a person to whom the exclusive privilege of supplying or selling country spirit by wholesale has been granted under section 22 of the Act, or of a licensed wholesale vendor of country spirit. The above definition makes it clear that the warehouse referred to under the State Excise Rules is under the direct control and authority of the Commissioner of State Excise because it is established by the Commissioner of State Excise and as such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blishment, established and controlled by the Excise Commissioner . It would be relevant to reproduce Rule 6DD(b) of the IT Rules at this juncture :- ( b) where the payment is made to the Government and, under the rules framed by it, such payment is required to be made in legal tender. In the instant case, the assessee (retail vendor) had made cash payments for purchase of country spirit by depositing cash directly into the bank account of M/s ABPL as per Rule 6(2) of the Excise Rules 2005 , it has to be construed as payment made to the State Government authority and accordingly falls under the exception provided in Rule 6DD(b) of the IT Rules. 22. It is not in dispute that M/s Asansol Bottling Packaging Co. Pvt Ltd have been granted licence to act as a wholesaler for supply of country liquor to the retail vendor as per the regulations of the Excise Department , Government of West Bengal. At the cost of repetition, we would like to state that the said regulation mandated the payments to be made directly into the bank account of the said wholesale licensee by the retail vendor (i.e assessee herein) for strict and effective regulation of the country liquor and for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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