TaxTMI 
TaxTMI 
2011 (11) TMI 371
X X X X Extracts X X X X
X X X X Extracts X X X X
....40A(3) of the Income Tax Act, 1961 would be applicable to the purchase of stock-intrade? 2. Whether in terms of Rule 6DD of the Income Tax Act, payment made by the assessee to M/s Hoshiarpur District Cooperative Milk Producers Union Ltd. shall be treated as payment made to the "cultivator, grower or producer" of the milk? Whether reporters of the local papers may be allowed to see the judgment? 2. To appreciate the rival contentions, it would be apposite to refer to Section 40A(3) of the Income Tax Act and Rule 6DD of the Income Tax Rules, as they stood at the relevant time. "Section 40A. Expenses or payments not deductible in certain circumstances.- (1) The provisions of this section shall have effect notwithstandi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....amely: ............ (f) where the payment is made for the purchase of- (i) agricultural or forest produce; or (ii) the produce of animal husbandry (including hides and skins) or dairy or poultry farming; or (iii) fish or fish products; or (iv) the products of horticulture or apiculture to the cultivator, grower or producer of such articles, produce or products." 3. The first question raised by Mr. M.M. Khanna, learned Senior Advocate, is that since milk was the stockintrade, the expenditure incurred for purchase of stockintrade is not covered under Section 40A(3). In support of this contention, he has relied upon the judgment of the Gauhati High Court in 190 ITR 61, Commissioner of Inc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or not. There is no doubt that, in terms of Rule 6DD the assessee can take benefit only if the payment is made to the grower or producer of such articles. Milk is not grown but is produced and the benefit can be taken by the assessee if the money is paid to the producer of the milk. 6. It has been contended on behalf of the revenue that since M/s Hoshiarpur District Co-operative Milk Producers Union Ltd. is a society, it can never be termed to be a producer of the goods. We cannot accept this wide submission at its face value. There may be a Union or Co-operative Society of milk producers, who may join together to supply milk. If such individuals join together and form a co-operative society then the society may be considered to be....