ACIT,, CHENNAI v. M/s. Premier Marine Products,, CHENNAI

ITA 1463/CHNY/2012 | 2008-2009
Pronouncement Date: 14-10-2016 | Result: Dismissed

Appeal Details

RSA Number 146321714 RSA 2012
Assessee PAN AAAFP3039N
Bench Chennai
Appeal Number ITA 1463/CHNY/2012
Duration Of Justice 4 year(s) 3 month(s) 1 day(s)
Appellant ACIT,, CHENNAI
Respondent M/s. Premier Marine Products,, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 14-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 14-10-2016
Date Of Final Hearing 04-10-2016
Next Hearing Date 04-10-2016
Assessment Year 2008-2009
Appeal Filed On 13-07-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . !' # $! # % . & ( * + [ BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY JUDICIAL MEMBER ] ./ I.T.A. NO. 1461/MDS/2012 / ASSESSMENT YEAR : 2008-2009 M/S. PREMIER MARINE PRODUCTS NO.3/284 MUTTUKADU ROAD NEELANGARAI CHENNAI 600 041. VS. THE DEPUTY COMMISSIONER OF INCOME TAX BUSINESS CIRCLE IV CHENNAI. ./ I.T.A. NO. 1463/MDS/2012 / ASSESSMENT YEAR : 2008-2009 THE ASSISTANT COMMISSIONER OF INCOME TAX BUSINESS CIRCLE IV CHENNAI. VS M/S. PREMIER MARINE PRODUCTS NO.3/284 MUTTUKADU ROAD NEELANGARAI CHENNAI 600 041. [PAN AAAFP 3039N ] ( - / APPELLANT) ( ./ - /RESPONDENT) ASSESSEE BY : SHRI. S. SRIDHAR ADVOCATE /RESPONDENT BY : SHRI. R. DURAIPANDIAN IRS JCIT / DATE OF HEARING : 04-10-2016 ! / DATE OF PRONOUNCEMENT : 14-10-2016 ITA NOS.1461 & 1463/2012. :- 2 -: 0 / O R D E R PER ABRAHAM P. GEORGE ACCOUNTANT MEMBER:- THESE ARE CROSS APPEALS OF THE ASSESSEE AND REV ENUE FOR THE ASSESSMENT YEAR 2008-2009 DIRECTED AGAINST THE ORDER DATED 11.04.2012 OF THE LD. COMMISSIONER OF INCOME TAX (A PPEALS)-VIII CHENNAI. 2. GROUNDS TAKEN BY THE REVENUE RUN INTO THREE NUMB ERS OUT OF WHICH 1 & 3 ARE GENERAL IN NATURE NEEDING N O SPECIFIC ADJUDICATION. GROUNDS TAKEN BY THE ASSESSEE ARE TWO OF WHICH GROUND 2 IS GENERAL AGAIN NEEDING NO ADJUDICATION. 3. EFFECTIVE GROUND WHICH IS LEFT IN REVENUES APPEAL IS GROUND NO.2 AND IN ASSESSEES APPEAL IS GROUND NUMBER 1. REVENUE ASSAILS THE ORDER DATED 11.04.2012 OF COMMISSIONER OF INCOM E TAX (APPEALS)- VIII CHENNAI DELETING AN ADDITION OF A2 70 00 000 /- OUT OF A TOTAL ADDITION OF A3 00 00 000/- MADE BY THE LD. ASSESSIN G OFFICER. AS AGAINST THIS ASSESSEE IS AGGRIEVED ON THE SUSTENANC E OF THE ADDITION TO THE EXTENT OF A 30 00 000/- 4. FACTS APROPOS ARE THAT THE ASSESSEE ENGAGED IN SAL E OF MARINE PRODUCTS HAD FILED A RETURN OF INCOME FOR T HE IMPUGNED ASSESSMENT YEAR DISCLOSING INCOME OF A33 20 727/-. THERE WAS SURVEY ITA NOS.1461 & 1463/2012. :- 3 -: U/S.133A OF THE INCOME TAX ACT 1961( HEREIN REFER RED AS THE ACT) IN THE PREMISES OF THE ASSESSEE ON 27.03.2008. IT S EEMS A STATEMENT WAS RECORDED FROM ONE SHRI. BELAVENDIRAN ACCOUNT M ANAGER OF THE ASSESSEE DURING THE COURSE OF SURVEY. IN SUCH STAT EMENT SHRI. BELAVENDIRAN EXPLAINED THE PROCESS OF ACQUISITION OF RAW MATERIAL AND ALSO THE MANUFACTURING METHOD USED BY THE ASSESSEE . A QUESTION WAS RAISED REGARDING EXPECTED SALES AND PURCHASES. SHR I. BELAVENDIRAN IT SEEMS GAVE FIGURE OF A50 CRORES FOR SALES AND A38 CRORES FOR PURCHASES. HOWEVER IN THE FINANCIAL STATEMENTS FI LED ALONGWITH RETURN OF INCOME ASSESSEE HAD DISCLOSED GROSS SALES OF A4 9.57 CRORES AND PURCHASES WORTH OF A44.10 CRORES. AS PER LD. ASSES SING OFFICER THOUGH THE SALES FIGURE CAME CLOSE TO THE FIGURE STATED B Y SHRI. BELAVENDIRAN PURCHASE FIGURE WAS MUCH HIGHER. ACCORDING TO THE L D. ASSESSING OFFICER PURCHASES OVER A SHORT PERIOD OF FOUR DAYS VIZ-A-VIZ 28.03.2008 TO 31.03.2008 REFLECTED AN INCREASE OF ABOUT A5.47 CRORES WHICH CAME TO 12.4% OF THE WHOLE YEAR PURCHASE. LD. ASSESSING OFFICER CALCULATED AVERAGE MONTHLY PURCHASE WHICH CAME TO A3.67 CRORES UPTO FEBRUARY 2008 AND COMPARED IT WITH THE PURCHASE OF A5.47 CRO RES FOR THE LAST FOR FOUR DAYS OF MARCH 2008. FURTHER AS PER LD. ASSESSING OFFICER ASSESSEE HAD SUBMITTED BEFORE UNION BANK OF INDIA A STOCK STATEMENT IN WHICH SALES WAS SHOWN AS A65 CRORES. LD. ASSESS ING OFFICER ALSO NOTED THAT SHRI. BELAVENDIRAN HAD IN ANSWER TO A Q UESTION STATED THAT ITA NOS.1461 & 1463/2012. :- 4 -: NO PUCCA STOCK REGISTER WITH QUANTITY PARTICULARS W AS BEING MAINTAINED. FURTHER AS PER LD. ASSESSING OFFICER CLOSING STOC K SHOWN BY ASSESSEE IN ITS FINAL ACCOUNT FOR THE RELEVANT FINANCIAL YEA R CAME TO A14.05 CRORES AGAINST TOTAL SALES OF A49.57 CRORES AND T OTAL PURCHASE OF A41.10 CRORES. ACCORDING TO LD. ASSESSING OFFICER SUCH A HIGH LEVEL OF CLOSING STOCK WAS NOT PROBABLE ESPECIALLY SINCE AS SESSEE WAS DEALING IN PERISHABLE ITEMS. THUS ACCORDING TO LD. ASSESS ING OFFICER THE ASSESSEE HAD INFLATED ITS PURCHASE FIGURES WITH A M OTIVE TO REDUCE PROFITS. 5. LD. ASSESSING OFFICER ALSO NOTED THAT ASSESSEE HAD EFFECTED MAJOR PURCHASES IN CASH. THE PURCHASES WHICH WERE EFFECTED FROM FISHERMEN WERE BASED ON ADVANCE GIVEN IN CASH. AS PER LD. ASSESSING OFFICER FOR THE FOLLOWING PURCHASES CASH PAYMENTS IN EXCESS OF A20 000/- AGGREGATED TO A 1 57 93 664/-. SL. NO PURCHASE FROM LOCATION OF PURCHASE TOTAL CASH PURCHASE INDIVIDUAL CASH PAYMENT BELOW 20 000/- INDIVIDUAL CASH PAYMENT ABOVE 20 000 1 KHAN KOTTAIPATTINAM MANDAPAM 20 78 737 15000 20 63 737 2 RAJ MANDAPAM LOCAL 36 04 889 24 320 35 80 569 3 KARTHIKEYAN KOTTAIPATTINAM 21 08 479 42 261 20 66 217 4 MANICKAM RAMESHWARAM MANDAPAM 28 21 815 20 000 28 01 815 5 SANTHYA RAMESHWARAM MANDAPAM 39 64 299 6 602 39 57 697 6 ENNEM MANDAPAM LOCAL 6 25 907 3 30 907 2 95 000 ITA NOS.1461 & 1463/2012. :- 5 -: 7 SEURYA MANDAPAM LOCAL 9 16 636 4 50 000 4 66 636 8 SEBASTIN MANDAPAM LOCAL 11 84 597 6 22 605 5 61 992 9 MURUGAN SYALKUDI MANDAPAM 42 04 200 42 04 200 0 10 SABUBAR SYALKUDI MANDAPAM 61 844 61 844 0 TOTAL 1 73 67 624 15 73 960 1 57 93 664 THOUGH THE ASSESSEE RELIED ON RULE 6DD(E) OF INCOME TAX RULES 1962 THE LD. ASSESSING OFFICER WAS OF THE OPINION THAT F ISHERMEN COULD NOT BE EQUATED TO THE CULTIVATOR OR GROWER OR PRODUCER OF THE TYPE OF ARTICLE OR PRODUCT MENTIONED IN THE SAID RULE. THE LD. ASSESSING OFFICER ALSO NOTICED THAT FISHERMEN WERE FROM RAMESHWARAM & MANDAPAM WHERE THERE WERE BANK FACILITIES AND THERE WAS NO REASON FOR THE ASSESSEE TO MAKE PAYMENTS IN CASH. LD. ASSESSING OFFICER APPLIED SEC. 40A(3) OF THE ACT AND MADE DISALLOWANCE OF A1 57 93 664/-. 6. FOR THE ALLEGED BOGUS PURCHASES MENTIONED BY US AT PARA 4 ABOVE LD. ASSESSING OFFICER WAS OF THE OPINION TH AT A PART OF THE ADDITIONAL PURCHASES OF A5.47 CRORES COULD HAVE BE EN GENUINE. HE THEREFORE HELD THAT A3 CRORES OUT OF A5.47 CRORES W ORTH OF MATERIALS PURCHASED BY THE ASSESSEE DURING THE PERIOD 28.03.2 008 TO 31.03.2008 COULD BE CONSIDERED AS BOGUS. SINCE A SU M OF A1 57 93 664/- WAS DISALLOWED U/S.40A(3) OF THE ACT BY HIM THE LD. ITA NOS.1461 & 1463/2012. :- 6 -: ASSESSING OFFICER RESTRICTED THE ADDITION FOR BOGU S PURCHASE TO A1 42 06 336/-. EFFECTIVELY THE TOTAL ADDITION CAM E TO A3 CRORES. 7. AGGRIEVED ASSESSEE MOVED IN APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS). ARGUMENT OF THE ASSESSEE WAS THAT SHRIMPS WERE PURCHASED FROM FISHERMEN WHO WERE LOCATED IN COASTAL AREAS THROUGH ITS CENTERS SITUATED IN DISP ARATE PLACES. ARGUMENT OF THE ASSESSEE WAS THAT IT HAD CENTERS AT CHINDRATRIPET CUDDALORE MANDAPAM NAGAPATTINAM NELLORE PATTUKO TTAI SIRKAZHI TUTICORIN. IN ADDITION AS PER ASSESSEE IT HAD PU RCHASE CENTERS LOCATED AT EARWADI JAGATHAPATTINAM KOTTAIPATTINAM MIMISAL MANDAPAM RAMESHWARAM SAYALKUDI MUTHUPUT GUDUR MALLIPATTNAM SB CHATHIRAM PALAYAR SIRKAZHI COLACHAI OVARY Q UILON AND VIZHINGIAM WHERE NO BANKING FACILITIES. FURTHER A S PER ASSESSEE RULE 6DD(E) OF INCOME TAX RULES HAD TO BE INDEPENDE NTLY APPLIED AND COULD NOT CONDITIONED WITH A REQUIREMENT OF NOT HAVING BANKING FACILITIES. 8. IN SO FAR AS ADDITION MADE TOWARDS BOGUS PURCHASE WAS CONCERNED CONTENTION OF THE ASSESSEE BEFORE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS THAT THE COMPARISON ATTEM PTED BY LD. ASSESSING OFFICER WITH PURCHASE FIGURE GIVEN IN AUD ITED FINANCIAL STATEMENTS WAS INCORRECT. AS PER THE ASSESSEE PURC HASE FIGURE OF ITA NOS.1461 & 1463/2012. :- 7 -: A44 10 65 796/- INCLUDED FEED PURCHASES CHEMICAL P URCHASES AND VARIOUS OTHER ITEMS. CONTENTION OF THE ASSESSEE WA S THAT PURCHASE OF SHRIMPS INCLUDED IN THE SAID AMOUNT OF A40 90 44 26 0/- ONLY. THUS AS PER ASSESSEE ANY COMPARISON ATTEMPTED SHOULD HAV E BEEN WITH THE FIGURES OF A40 90 44 260/-. SO FAR AS LOW BUSINESS PROFITS WAS CONCERNED THE CONTENTION OF THE ASSESSEE BEFORE LD . COMMISSIONER OF INCOME TAX (APPEALS) WAS THAT MISCELLANEOUS INCOME OF A24 17 555/- WAS TOTALLY IGNORED BY LD. ASSESSING OFFICER THOUGH SUCH INCOME RELATED TO ITS BUSINESS. 9. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AFTER CONSIDERING THE CONTENTIONS OF THE ASSESSEE MENTIO NED ABOVE WAS OF THE OPINION THAT LD. ASSESSING OFFICER COULD NOT SH OW ANY EVIDENCE FOR BOGUS PURCHASES. AS PER LD. COMMISSIONER OF INCOME TAX (APPEALS) THE ADDITIONS WERE MADE PURELY ON SURMISES AND THE COMPARISON ATTEMPTED BY ASSESSING OFFICER BETWEEN ESTIMATED RA W MATERIALS COST STATED BY ACCOUNT MANAGER AND ACTUAL RAW MATERIALS COST ACCOUNTED BY ASSESSEE WAS ITSELF WRONG. HOWEVER SINCE MANY OF THE VOUCHERS PRODUCED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM OF PURCHASES WERE SELF MADE THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) HELD THAT THERE COULD AT BEST BE INFLATION TO THE EXTENT OF A 30 00 000/- ONLY. SO FAR AS APPLICATION OF SEC. 40A(3) OF THE ACT WAS CONCERNED THE LD. ITA NOS.1461 & 1463/2012. :- 8 -: COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE OPI NION THAT EXCEPTION UNDER RULE 6DD(E) COULD BE AVAILED BY TH E ASSESSEE. HE THUS HELD THAT ADDITION UNDER SEC. 40A(3) WAS NOT CORRECT. THUS OUT OF TOTAL ADDITION OF A3 CRORES HE UPHELD ADDITION TO THE EXTENT OF A30 00 000/- AND DELETED THE BALANCE. 10. NOW BEFORE US AS ALREADY MENTIONED REVENUE IS IN APPEAL AGAINST SCALING DOWN OF THE ADDITION. WHEREAS ASSE SSEE IS AGGRIEVED ON SUSTENANCE OF A30 00 000/-. LD. DEPARTMENTAL REPRESENTATIVE IN SUPPORT OF REVENUES APPEAL SUBMITTED THAT SHRI. B ELAVENDIRAN HAD CLEARLY MENTIONED THE FIGURE OF SALES AND PURCHASES FOR THE YEAR. THE PURCHASES MENTIONED BY HIM VERY MUCH LOWER THAN WHA T WAS GIVEN BY THE ASSESSEE IN THE FINANCIAL ACCOUNTS. AS PER LD. DEPARTMENTAL REPRESENTATIVE SHRI. BELAVENDIRAN WAS THE ACCOUNT MANAGER OF THE ASSESSEE AND THEREFORE THE FIGURES GIVEN BY HIM ON THE DATE OF SURVEY COULD NOT BE DISBELIEVED. LD. DEPARTMENTAL REPRESE NTATIVE POINTED OUT THAT SURVEY ITSELF WAS CONDUCTED ON 27.03.2008. ACCORDING TO HIM A SHORT PERIOD OF FOUR DAYS LEFT THERE COULD NOT HA VE BEEN A PURCHASE OF A5.47 CRORES WHICH WAS FAR IN EXCESS OF NORMAL AVERAGE PURCHASES. APART FROM THAT AS PER LD. DEPARTMENTAL REPRESENTA TIVE ASSESSEE WAS IN THE HABIT OF INFLATING ITS FIGURES AS EVIDENT B Y THE STOCK STATEMENT FURNISHED GIVEN BY IT TO M/S. UNION BANK OF INDIA. LD. DEPARTMENTAL REPRESENTATIVE ALSO POINTED OUT THAT ASSESSEE NEVE R MAINTAINED PUCCA ITA NOS.1461 & 1463/2012. :- 9 -: STOCK REGISTER. AS PER THE LD. DEPARTMENTAL REPRE SENTATIVE CASH PURCHASES OF THE ASSESSEE WERE NOT ENTIRELY MADE FROM FISHERMEN. LD. DEPARTMENTAL REPRESENTATIVE PLACING RELIANCE O N PAPER BOOK FROM PAGE NOS.24 TO 26 FILED BY THE ASSESSEE SUBMITTED THAT PAYMENTS EFFECTED TO MANY OF THE SELLERS WERE HUGE SUMS AND NOT SMALL AMOUNTS. THUS ACCORDING TO HIM CLAIM OF THE ASSE SSEE THAT ALL PURCHASES WERE MADE FISHERMEN COULD NOT BE ACCEPTE D. AS PER LD. DEPARTMENTAL REPRESENTATIVE SEC. 40(3) OF THE ACT WAS CLEARLY APPLICABLE. LD. DEPARTMENTAL REPRESENTATIVE SUBMIT TED THAT ADDITION MADE BY THE LD. ASSESSING OFFICER WAS BASED ON THE ABOVE HARD FACTS NOT ON SURMISES. 11. PER CONTRA AND IN ITS SUPPORT OF ASSESSEE APPEAL LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT WHOLE OF T HE ADDITION MADE WAS BASED ON A STATEMENT RECORDED FROM THE ACCOUNT MANAGER OF THE ASSESSEE. ACCOUNT MANAGER HIMSELF HAD STATED THAT T HE FIGURES WERE ESTIMATED BY HIM. AS PER THE LD. AUTHORISED REPRES ENTATIVE UNDUE RELIANCE WAS PLACED ON THE STATEMENT OF THE ACCOUNT MANAGER. FURTHER AS PER LD. AUTHORISED REPRESENTATIVE SALES FIGURE GIVEN IN THE FINANCIAL STATEMENT WAS NOT DISTURBED BUT ONLY THE PURCHASE FIGURE WAS DISBELIEVED. AS PER LD. AUTHORISED REPRESENTATIVE ITS ACCOUNT MANAGER COULD NOT HAVE MADE A CORRECT GUESS WORK O N 27.03.2008 WHEN THE SURVEY WAS CONDUCTED ONLY ON ONE PREMISES WHEREAS ITA NOS.1461 & 1463/2012. :- 10 -: PURCHASES WERE EFFECTED THROUGH VARIOUS PURCHASES C ENTERS. THUS ACCORDING TO HIM NO ADDITION WOULD HAVE BEEN MADE F OR ANY BOGUS PURCHASE AND LD. COMMISSIONER OF INCOME TAX (APPEAL S) FELL IN ERROR IN SUSTAINING SUCH ADDITIONS TO THE EXTENT OF A 30 00 000/-. SUPPORTING THE VIEW TAKEN BY THE LD. COMMISSIONER OF INCOME TA X (APPEALS) THAT U/S.40A(3) WAS NOT APPLICABLE LD. AUTHORISED REPRE SENTATIVE SUBMITTED THAT RULE 6DD(E) CLEARLY APPLIED AND HENCE LD. COMM ISSIONER OF INCOME TAX (APPEALS) WAS RIGHT IN RULING SO. 12. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. IN THE STATEMENT RECORDED FROM SHRI. BELAVENDIRAN ACCOUNT MANAGER AT THE TIME OF SURVEY ON 27.03.2008 THERE WAS A QUESTION REGARDING THE SALES TURNOVER POSED TO HIM. THE SAID QUESTION AND ITS REPLY ARE REPRODUCED HEREUNDE R:- QUESTION 15:- WHAT WOULD BE YOUR SALES TURNOVER FO R THE REMAINING PERIOD TILL 31.03.2008. ANSWER 15 APPROXIMATELY THE SALES TURNOVER WILL BE 50 CRORES AND PURCHASES AT 38 CRORES THE QUESTION IS ON SALES TURNOVER FOR THE REMAINING PERIOD TILL 31.03.2008. REMAINING PERIOD STARTED ON 27.03.200 8 IMMEDIATELY AFTER THE RECORDING OF THE STATEMENT TO THE MIDNIGH T OF 31.03.2008. SO THE ANSWER GIVEN BY SHRI. BELAVENDIRAN IF WE TAKE IT IN ITS LITERAL SENSE COULD ONLY MEAN THAT ASSESSEE WOULD HAVE A T URNOVER OF A50 ITA NOS.1461 & 1463/2012. :- 11 -: CRORES AND PURCHASES OF A38 CRORES DURING THE ABOVE REMAINING PERIOD. ACCOUNT MANAGER DID NOT MENTION THAT TURNO VER AND PURCHASES APPROXIMATED BY HIM WERE FOR THE WHOLE OF THE FINA NCIAL YEAR. NOW COMING TO THE BREAKUP OF PURCHASES IT IS NOT DISPU TED BY THE DEPARTMENT THAT TOTAL PURCHASES A 44 10 65 796/- T AKEN BY THE LD. ASSESSING OFFICER FOR COMPARISON WAS COMPRISED OF VARIOUS ITEMS OF DIRECT COST. BREAKUP OF THE SUM OF A44 10 65 796/- HAS BEEN GIVEN AT PAGE BOOK PAGE 22 AND THIS READS AS UNDER:- SL.NO PARTICULARS AMOUNT 1 RAW MATERIALS 409044260 2 FEED PURCHASES 9726085 3 CHEMICAL PURCHASE 117558 4 VEHICLE HIRE CHARGES 500000 5 CARRIAGE INWARDS 12797863 6 VEHICLE MAINTENANCE 9629045 7 BROKERAGE & COMMISSION 397093 8 VARIATION IN STOCK OF PRAWN FEED (1158623) 9 VARIATION IN STOCK OF PRAWN CHEMICALS 12515 TOTAL 441065796 OBVIOUSLY RAW MATERIALS PURCHASED FOR THE RELEVANT PREVIOUS YEAR CAME TO A40 90 44 260/- ONLY. CONSIDERING FOR A MO MENT THAT THE FIGURES MENTIONED BY SHRI. BELAVENDIRAN WAS FOR THE FULL YEAR THE ABOVE MENTIONED PURCHASE FIGURE IS NOT FAR AWAY FR OM THE ESTIMATED PURCHASES OF A 38 CRORES MENTIONED BY HIM. ASSESSE E COULD HAVE HAD ITA NOS.1461 & 1463/2012. :- 12 -: MANY REASON TO MAKE HIGHER PURCHASES IN THE MONTH O F MARCH. UNLESS ASSESSING OFFICER COULD SHOW WITH HARD EVIDENCE THA T THE RECORDED PURCHASES WERE BOGUS A CONCLUSION FOR INFLATION OF PURCHASES IN OUR OPINION WAS NOT JUSTIFIED. OTHER THAN STATISTICAL D ATA AND HIS FINDING THAT MANY OF THE PURCHASES WERE MADE THOUGH SELF VO UCHERS NOTHING HAS BEEN BROUGHT ON RECORD TO SUBSTANTIATE THE CONC LUSION REGARDING INFLATION OF PURCHASES. THUS ACCORDING TO US L D. COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN HOLDING THAT LD. ASSESSING OFFICER HAS MADE A COMPARISON OF TWO UNCOMPARABLE ITEMS AND BOGUS PURCHASES IF AT ALL THERE COULD HAVE BEEN ONLY TO T HE EXTENT OF A30 00 000/-. 13. AS FOR THE ADDITION MADE BY THE LD. ASSESSING OFFIC ER U/S.40A(3) OF THE ACT THE LD. ASSESSING OFFICER HA D HELD THAT RULE 6DD(E) (III) COULD NOT BE APPLIED SINCE THERE WERE BANKING FACILITIES AVAILABLE IN THE PLACE OF PURCHASE. RULE 6DD (E) IS REPRODUCED HEREUNDER: NO DISALLOWANCE UNDER SUB-SECTION (3) OF SECTION 40 A SHALL BE MADE AND NO PAYMENT SHALL BE DEEMED TO BE THE PROFITS AND GAINS OF BUSINESS OR PROFESSION UNDER SUB-SECTION (3A) OF SECTION 40A WH ERE A PAYMENT 59 OR AGGREGATE OF PAYMENTS MADE TO A PERSON IN A DAY OT HERWISE THAN BY AN ACCOUNT PAYEE CHEQUE DRAWN ON A BANK OR ACCOUNT PAY EE BANK DRAFT EXCEEDS TWENTY THOUSAND RUPEES IN THE CASES AND CIRCUMSTANC ES SPECIFIED HEREUNDER NAMELY : A ................................ B. ................................ ITA NOS.1461 & 1463/2012. :- 13 -: C. ................................ D. ................................ E. WHERE THE PAYMENT IS MADE FOR THE PURCHASE OF ( I ) AGRICULTURAL OR FOREST PRODUCE; OR ( II ) THE PRODUCE OF ANIMAL HUSBANDRY (INCLUDING LIVESTOC K MEAT HIDES AND SKINS) OR DAIRY OR POULTRY FARMING; OR ( III ) FISH OR FISH PRODUCTS 68 ; OR ( IV ) THE PRODUCTS OF HORTICULTURE OR APICULTURE TO THE CULTIVATOR GROWER OR PRODUCER OF SUCH ARTIC LES. PRODUE OR PRODUCTS; IT IS CLEAR THAT THERE PRESENCE OR ABSENCE OF BANK FACILITIES IS NOT STIPULATED AS A PRE-CONDITION FOR APPLYING RULE 6 DD (E) (III). THUS EVEN IF PAYMENT OF EXCESS OF A20 000/- IS PAID IN C ASH FOR PURCHASE OF FISH OR FISH PRODUCTS TO A CULTIVATOR GROWER OR P RODUCER OF SUCH FISH OR FISH PRODUCT WHO WAS HAVING A BANK ACCOUNT THERE CAN BE NO DISALLOWANCE U/S.40A(3) OF THE ACT. HOWEVER THE D ETAILS OF PURCHASES PLACED AT PAPER BOOK 24 TO 27 SHOW THAT THE MANY OF THE PURCHASES WERE EFFECTED THROUGH LIMITED COMPANIES LIKE M/S. KAUSULAYA AQUA MARINE PRODUCTS EXPORTS PVT. LTD BISMI PRAWN FARMS (P) LTD CHINNU AQUA TECH (P) LTD CP AQUA CULTURE (P) LTD ETC. ASSESSEE HAD NOT SHOWN HOW THESE PERSONS WERE CULTIVATOR GROWER OR PRODUCER OF FISH OR FISH PRODUCT. THUS FOR ATLEAST FOR PART OF PUR CHASES SEC. 40A(3) OF THE ACT MIGHT HAVE APPLIED. IN OUR OPINION CONSID ERING ALL THESE ASPECTS DISALLOWANCE OF A30 LAKHS OUT OF THE TOTA L PURCHASES DONE BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THOUG H FOR A DIFFERENT ITA NOS.1461 & 1463/2012. :- 14 -: REASON CANNOT BE FAULTED. WE ARE THEREFORE OF THE OPINION THAT NOTHING HAS BEEN SHOWN BY EITHER OF THE PARRIES W HICH REQUIRE AN INTERFERENCE WITH THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 14. IN THE RESULT THE APPEALS OF THE REVENUE AND ASSES SEE ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY THE 14 TH D AY OF OCTOBER 2016 AT CHENNAI. SD/- SD/- ( # $! # % . & ) ( DUVVURU RL REDDY ) ( / JUDICIAL MEMBER ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED: 14TH OCTOBER 2016 KV %& '()( / COPY TO: 1 . / APPELLANT 4. * / CIT 2. / RESPONDENT 5. (+ - / DR 3. *./ / CIT(A) 6. 01 / GF