1981 (9) TMI 157

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....es, i.e., one Sethia & Co. at Secunderabad and one Majid J. Kasli at Navsari. Barring a few payments in draft or cheque, the rest of the payments made for the purchases were in cash. The ITO was of the opinion that these payments would be hit by section 40A(3). He added Rs. 1,79,787 on this account. 2. The Commissioner (Appeals) deleted the addition. According to him, the assessee's purchases would be saved from the provisions of section 40A(3) by virtue of rule 6DD. This rule exempts payments in cash from the purview of section 40A(3) if the payments were made for the purpose of fish or fish products and other allied items. The Commissioner (Appeals) was of opinion that frog legs dealt with by the assessee could be broadly considered as....

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....ri, for the assessee, submitted that the certificates issued should be used in interpreting the provisions of rule 6DD. He submitted that the department should not be allowed to raise the question whether the two parties concerned were producers of frog legs or not. 6. We have considered the facts of the case. It is an admitted position that payments have been made exceeding Rs. 2,500 otherwise than by a crossed cheque and, therefore, the provisions of section 40A(3) would apply ; but shelter is taken under rule 6DD. This rule states as follows : "6DD. No disallowance under sub-section (3) of section 40A shall be made where any payment in a sum exceeding two thousand five hundred rupees is made otherwise than by a crossed cheque drawn....

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....oducts' would be intended to cover those items of food which are other than cereals, i.e., rice, wheat, etc., which are coming under clause (1), or mutton, eggs, chicken, etc., which would come under clause (ii). So, the term 'fish or fish products' denotes a genus and all items, which are allied to fish and which are edible, will have to be considered under this head. Thus, prawn, shrimps, lobsters, etc., which are definitely not fish, will have to be considered as fish or fish products for this purpose. If prawns, shrimps, etc., should be considered as fish for this purpose, we see no reason why it should not be extended to frog legs also. 9. We have also been shown extracts from the Import Trade Control Policy which has a heading of f....