2018 (7) TMI 2038

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....t year 2009-10.    2. Only issue is to be decided is as together the CIT(A) is justified in confirming the addition made by the Assessing Officer on account of  cash purchase violating the section 40A(3) of the Income Tax Act, 1961, in short "the Act" in the facts and circumstances of the case.   3. The brief facts of the case are that assessee is an AOP and engaged in retail trading of country liquor. The assessee filed return of income showing total income of Rs.47,67,010/- and assessment was completed u/s 143(3) of the Act accepting the return income. The said assessment was re-opened on an information that huge cash purchase of liquor in excess of Rs.20,000/- on each occasion from M/s Saraya Distillery, Sadar N....

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....e of  CIT Central vs. Panduranga Enterprises¸ (2015) 55 Taxmann.com 437 (Kar) upheld the view of AO.   5. Aggrieved, assessee before us contending that the cash purchase of alcohol liquor for human consumption from a authorized distributor of Government of Uttar Pradesh is covered by the Rule 6DD(b) of IT Rules, 1962 and such payments were made to an agent of Government of Uttar Pradesh. Learned DR relied on the order of Authorities Below.   6. Heard rival submissions and perused material available on record. We find the issue on hand is covered by the order of co-ordinate bench of this Tribunal wherein it was held that cash payments made to an agent of government is covered by exception provided under Rule 6DD(b)....

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....y the exemption in terms of Rule 6DD(b) of Income Tax Rules, 1962 as per the notification issued  by the Government. In view of the same, we find no infirmity in the order of CIT(A) as the grounds 1 to 5 raised in  the appeal by the revenue are dismissed."    7. In view of above discussion and finding of co-ordinate bench of Kolkata Tribunal, we find the Government of Uttar Pradesh appointed M/s Saraya Distillery, Sadar Nagara, Gorakhpur, U.P. as its agent and the entire payments i.e. impugned amount paid to the said agent is to be treated as if paid to Government of U.P and as such said cash payment are covered by the Rule 6DD(b) of IT Rules, 1962. Therefore we are not in agreement with the view taken by Authorities ....