THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR
I.T.T.A. No. 629 of 2014
DATED:15.10.2014 Between:
The Commissioner of Income tax-II, Hyderabad.
… Appellant And M/s. Heritage Foods (India) Ltd., Hyderabad.
….Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR
I.T.T.A. No. 629 of 2014
Judgment: (per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta)
This appeal is preferred against the judgment and order of the learned Tribunal dated 27.7.2012 in relation to the assessment year 2005-06 and is sought to be admitted on the following suggested questions of law:
1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal is correct in confirming the deletion of disallowance under Section 40A(3) ?
2. Whether on the facts and in the circumstances of the case, the appellate Tribunal is correct in holding that the cash payments made by the assessee come within the purview of exclusion clause under Rule 6DD of Income Tax Rules (for short ‘the Rules)?
3. Whether the finding of the Appellate Tribunal that trader acted as agent of Milk Producers as well as the assessee company can be said to be based on material on record ?
We have heard Mr. S.R. Ashok, learned senior counsel appearing for the appellant and have gone through the impugned judgment and order of the learned Tribunal.
The learned Tribunal has concluded that if the payments at the level of milk producers are considered, each payment never exceeded the specified sum of Rs.20,000/-. There is therefore, no violation of Section 40 A (3) of the Income Tax Act. Violation arises only if the payments at the point of representative and not otherwise. It is also noticed in para 4.6 that it is a fact that the representative of milk collection centre functions in a dual capacity, both for the assessee as well as the milk supplier for incentives. Further it is undisputed fact that the said representative filed confirmation letters before the assessing officer asserting that they are the agents of the company along with their duties and responsibilities towards suppliers of milk too. It is the requirement of these agents to make the payment in cash for goods, i.e., milk, to the cattle owners, who belong to economically weaker section, on behalf of the assessee.
Thereafter, the learned Tribunal while following the judgment dated 18.10.2011 of the Gujarat High Court rendered in the case of C.I.T. vs. Gamdiwala Dairy, concluded that payments made to the milk producers are covered by exclusion clause Rule 6DD of the Rules.
We, therefore, do not find any element of law involved in this appeal and the same is accordingly dismissed.
Consequently, the miscellaneous applications, if any pending, shall also stand closed. No order as to costs.
K.J. SENGUPTA, CJ 15th October, 2014 Pnb SANJAY KUMAR, J