9911796707
TMI Blog2016 (9) TMI 1537X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessee is a retail vendor of Country Spirit, which is an excisable commodity. The purchase and sale are strictly controlled by the State Government. Earlier the retail dealers like the assessee were depositing the cost price, excise duty, bottling charges, etc. in the Treasury for getting supplies from the wholesale licensee. However, the Excise Department by a Notification dated 29.08.2005 changed such procedure, whereby prescribing that for lifting Country Spirit, the retail vendors have to make payment consisting of cost of the stock-in-trade, excise duty and bottling charges, etc. only to the wholesale licensee appointed by the State Government. Pursuant to the said procedure, the assessee made payments in the Bank account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; (5) For that even otherwise having regard to the nature and extent of banking facilities available consideration of business expediency and other relevant factors the ld. CIT(A) erred in confirming the addition made by the AO u/s 40A(3). (6) For that the ld. CIT(A) erred in confirming the addition of Rs. 20,640/- from carriage inward Rs. 2,57/-, from Tel. And Mobile expenses Rs. 6,143/-, from shop expenses Rs. 6,807/-, from electric expenses on adhoc basis when the expenses were fully incurred for business expenses and considering the turnover of the business the expenses incurred were quite fair and reasonable. (7) For that on the facts and circumstances of the case, the order of the CIT(A) be modified and the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government and the Rules framed by the State Government in this regard do not compel the assessee to make cash payments only. He further argued that the payments made in the State Bank of India are saved, but not the payments, which were made into the customer account maintained by the State Bank of India. 5. Basing on the above contention, the issue that arises for our consideration is whether the ld. CIT(Appeals) is justified in upholding the disallowance under section 40A(3) of the Act in the facts and circumstances of the case. 6. At the outset, we may state that there is no dispute in respect of the genuineness of the transactions made by the assessee. So also the identity of the receiver of the funds is not in dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to counter evasion of tax through claims for expenditure shown to have been incurred in cash with a view to frustrating proper investigation by the department as to the identity of the payee and reasonableness of the payment. When this is the primary object of enacting section 40A(3), we will have to see whether the payments made by the assessee into the account of M/s. IFB Agro Industries Limited, Durgapur would frustrate the purpose of enactment of section 40A(3). By virtue of payment through cash dated 04.09.2006, the wholesale licensee with exclusive privilege for bottling and/or sale by wholesale country spirit in sealed or capsule bottles and for manufacture and wholesale supply of country spirit in bulk litter enjoyed now by the hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) Anupam Tele Services -vs.- ITO reported in (2014) 43 taxman.com 199 (Guj.); (v) Ashok Mondal -vs.- ITO in ITA No. 873/KOL/2012 (Kolkata Tribunal's order dated 06.02.2014); 10. In the case of Ashok Mondal (supra), the Coordinate Bench of this Tribunal by way of an order dated 06.02.2014 considered the issue, which is identical to the facts of this case and after elaborating discussion reached a conclusion that the payments made by the assessee for the purchase of country liquor and country spirit from the territorial licensee bottling plant, IFB Agro Industries Limited, Durgapur is protected by the exemption in terms of Rule 6DD(b) of the Income Tax Rules, 1962. 11. In view of the above, we find that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
