2013 (6) TMI 942

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..... . In the course of hearing, the Revenue vehemently contends that the Commissioner of Income Tax(Appeals) has erred in deleting the addition made by the Assessing Officer of Rs..1,11,13,675/- by invoking sec. 40A(3) of the Act. Per Revenue, the statutory provision relied upon by the CIT(Appeals) i.e. Rule 6DD of the Income Tax Rules (hereinafter the Rules) does not apply in the case of the assessee. In addition to this, it reiterates the pleas raised in the grounds and prays for acceptance of the appeal. 3. In reply, the assessee draws strong support from the order under challenge passed by the CIT(Appeals) and findings contained therein. To buttress the same a paper book containing agreement in question entered into by the assessee with th .....

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..... n made to the producer of the dairy products. The same failed to convince the Assessing Officer. In the assessment order dated 29.12.2011, he added the said amount of Rs..1,11,13,675/- in assessee's income by holding that since he had made payments not to the payees exempted in Rule 6DD of the I.T. Rules but to a middle man (company), the plea raised by the assessee was not liable to be accepted. 7. The assessee carried the matter in appeal. It transpires from the operative part of the order under challenge that the CIT(Appeals) has held that Rule 6DD(f) and (i) covers the case of the assessee. Further finding is that the company is engaged in engaged in producing milk measuring 2.75 lakh litres per day which proved the genuineness and ide .....

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..... ticles, produce or products; A perusal of the rule vis-a-vis facts of the case makes it clear that the benefit provided therein does not cover the case of the assessee who has made payment to a company who is not a cultivator, grower or producer of the milk. In the instant case, the payee in question namely M/s. Hatsun Agro is a company which is not covered by any of the categories in the rules. Similarly, it is also not covered by any other sub rule which could cover the facts of the instant case. As far as the findings of the CIT(Appeals) that the assessee had proved genuineness and identity of the company are concerned, in our view, the disallowing provision in hand does not provide for such circumstances and even if genuineness and ide .....

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