Section 40A(3) not applies on cash purchases made from Mandi Samiti

KRBL Ltd. Vs DCIT (ITAT Delhi)

During the course of assessment proceedings, the appellant submitted that the cash purchases were made by it from Mandi Samitis located across UP from farmers and hence did not fall under the ambit of the provisions of section 40A(3) of the Act, as the same were covered by Rule 6DD of the Income Tax Rules, 1962. As per the AO, in order to claim benefit of Rule 6DD, it is the primary onus of the appellant to prove that cash purchases were made from bonafide agriculturists/cultivators, however, the appellant only relied upon

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