Case Law Details
Hind Industries Ltd Vs DCIT (ITAT Delhi)
ITAT Delhi held that the payment of assessee made in cash in violation of section 40A(3) of the Act is not eligible for benefit of exceptions envisages under Rules 6DD(f) in absence of any evidence supporting identity and genuineness of the supplier.
Facts- Vide the present appeal, the appellant has mainly contested confirmation of disallowance of Rs. 61,39,71,805/- which was made by the Assessing Officer u/s. 40A(3) of the Income Tax Act on account of non-genuineness of purchases of meat.
Conclusion- Held that in absence of any evidence in support of identity and genuineness of the appellant benefit of section 6DD(f) of the Rules cannot be applied in favour of the assessee therefore, the AO was right in making disallowance u/s 40A(3) of the Act therefore, the ld CIT(A) was correct and justified in upholding the same.
We are in agreement to the conclusion drawn by the ld CIT(A) that frozen meat could be purchased only from the meat processing units and therefore, the said suppliers, who are claimed to be illiterate villages with no bank accounts, cannot be held as cultivators or producer of frozen meat. Therefore, the explanation of assessee being devoid of merits and far away truthful factual positions was rightly discussed by the ld AO CIT(A). Hence, the payment of assessee made in cash in violation of section 40A(3) of the Act is not eligible for benefit of exceptions envisages under Rules 6DD(f). In totality of the facts and circumstances, we are unable to see any valid reason to interfere with the findings recorded by the ld CIT(A) while sustaining the part disallowances u/s 40A(3) of the Act and hence we uphold the same. Accordingly, grounds of assessee being devoid of merits are dismissed.
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