TaxTMI 
TaxTMI 
2018 (4) TMI 645
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....nt of cash payments made against purchases of liquor exceeding Rs. 20,000/- 2. The assessee in the present case is a partnership firm which is engaged in the business of trading in liquor. The return of income for the year under consideration was filed by it on 29.09.2013 declaring a total income of Rs. 4,60,810/-. As noted by the A.O. during the course of assessment proceedings, the assessee firm had made purchases of Rs. 1,29,53,207/- from M/s. Eastern Distilleries and Chemicals Ltd. and payments against the same were made by depositing cash directly in the bank account of M/s. Eastern Distilleries and Chemicals Ltd. in the sums exceeding Rs. 20,000/-. According to the A.O., the said payments were made by the assessee in contravention ....
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....ded 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 ....
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....ling, by wholesale or retail. or (d) of manufacturing or supplying by wholesale and selling retail, or (e) of manufacturing and supplying by wholesale and selling retail, any country liquor or intoxicating drug within any specified local area: Provided that public notice shall be given to the intention to grant any such exclusive privilege. and that any objections made by any person residing within the area affected shall be considered before an exclusive privilege is granted. (2) No grantee of any privilege under sub-section (1) shall exercise the same unless or until he has received a license in that behalf from the Collector or the Excise Commissioner. Hence it could be safely concluded that M....
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....that the said wholesale licensee had acted at the instance of the State Government. Once this is so, then the said wholesale licensee could be construed as an agent of the State Government. For the sake of convenience, the relevant rule is reproduced hereunder:- Rule 6DD(k) - where the payment is made by any person to his agent who is required to make payment in cash for goods or services on behalf of such person. The payment made by the assessee retail vendor to the Principal, Government of West Bengal through its wholesale agent. The relationship between the assessee (authorized retailer) and Government of West Bengal (the supplier) acting under West Bengal Excise Rules through its Authorised Wholesaler Licensee (Agent),....