TaxTMI 
TaxTMI 
2025 (4) TMI 409
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....009 - 10 dated 11.06.2013. 2. The submissions of Mr.A.S.Sriraman appearing for the appellant are as follows:- (i) The appellant is in the business of wholesale milk distribution of Arokya Milk to dealers for Hatsun Agro Products Limited (hereinafter referred to as 'Company'). (ii) A return of income had been filed for AY 09-10, which was processed initially under Section 143(1) and thereafter taken up for scrutiny. (iii) In the course of assessment, the appellant's accounts were verified and it was found that cash payments in excess of Rs.20,000/- as stipulated under Section 40A(3) of the Income-Tax Act, 1961 (Act) had been made on various dates. (iv) The smallest of the payments was a sum ....
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.... or producer of milk. They noted that the payee i.e., was a Company and hence the transaction would not come under the protection of Rule 6DD at all. As against the adverse order of the Tribunal, the assessee is in appeal before us. 5. Learned counsel for appellant would reiterate the contentions made before the lower authorities, that the appellant would be entitled to the full benefit of 6DD(e)(ii) as, according to him, the Company is engaged in production of milk. To this end, he would rely on two decisions of this Court in Tamil Nadu Cooperative Milk Producers' Federation Ltd vs State of Tamil Nadu [Tax Case (Revision) No. 1149 of 2006 dated 20.07.2012], and Chettinad Builders v the Deputy Commissioner of Income Tax, Corporate Ci....
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....ould hence urge that the order of the Tribunal be reversed and the order of the CIT (Appeals) be restored. 9. Mr.J.Narayanaswamy, learned Senior Standing Counsel, would rely on the provisions of Section 40A(3), arguing that the exclusions are not attracted in the present case, and hence there is no necessity to advert to the same. Both the entities are situated within urban limits and have full access to banking facilities. The exclusions provided under Rule 6DD target those situations where either the payments are made to the Government or to a recipient situated in a rural area or one engaged in specific activities, such as animal husbandry, dairy or poultry farming or fish or fish products, horticulture or apiculture who is the cultiv....
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....senting cash payments exceeding Rs.20,000/- for procurement of milk/milk products after making the disallowance under Section 40A(3) of the Act on the misreading of the exceptions given in the form of illustrations under Rule 6DD of the Income Tax Rules, 1962 in the extension of the proviso below the section 40A(3A) of the Act, which provisions exempted/excluded the Appellant from the rigours of the main section 40A(3) of the Act? (iii) Whether the Appellate Tribunal is correct in law in sustaining the action of the Respondent in disallowing the cash payments exceeding Rs.20,000/- for procurement of dairy products from the producer of milk/milk products by recording a perverse finding of fact in treating the producer as a manufactu....
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....re a milk distributor based in the city (the appellant) and a Company. The appellant claims that the Company purchases milk from farmers, and that it pasteurises and sells the pasteurised milk to the appellant/distributor for onward sale by the appellant to dealers of the Company. This, admittedly, is the structure of the transaction. 15. Section 40A deals with expenses or payments not deductible in certain circumstances, and states that where expenditure is incurred in excess of a sum of Rs.10,000/- in cash, no deduction would be available in respect of such expenditure. The proviso thereunder reads as follows:- "Where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in....
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....his context that the appellant relies on the decisions of this Court and of the Calcutta High Court to state that conversion of raw milk to pasteurised milk amounts to production and by engaging in this process, it assumes the status of 'producer'. 19. We do not agree as the reference to 'producer' in the conclusion of clause (e) of Rule 6DD is clearly to a dairy farmer and not to a company. The term 'producer' qua 'dairy farming' has to be understood noscitor a sociis with the terms 'cultivator' and 'grower' qua agriculture, forestry, poultry farming, apiculture etc, respectively. It cannot, by any stretch of the imagination stretch to include a company that is engaged in the activity of pasteurisation of milk, particularly bearing in m....