M/S Garg Enterprises v. Order

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITC No. 15 of 1999(O&M)Date of decision: November 9, 2009 The Commissioner of Income-Tax, Patiala ...Appellants M/s Garg Enterprises Versus ...Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE GURDEV SINGH Present: Ms. Urvashi Dhuggal, Advocate, for the revenue.Mr. Animesh Sharma, Advocate, for the assessee. ORDER 1. This application has been filed for direction to make referenceon question of law to the following effect:- “Whether on the facts and in the circumstances of the case, theI.T.A.T. was right in law in holding that the CIT was notjustified in cancelling the order passed by the A.O. by invokingthe provisions of Section 263 and thereby reversing the orderpassed by the C.I.T.?” 2.The assessee is engaged in sale and purchase of tractors and itsspare parts, mainly required by agriculture sector. The Assessing Officermade assessment for the year in question but thereafter CIT exercisingpowers under Section 263 of the Act set aside the order of the AssessingOfficer on the ground that as per CBDT's circular No. 220 dated 31.5.1977confirmation of concern party was required before benefit of Rule 6 DD (j) was allowed. On appeal of the assessee before the Tribunal, the said orderwas set aside after recording a finding that necessary confirmation from theparty had been duly furnished and allowing of cash payment was justified.3.We have heard learned counsel for the parties and perused the record. 4. The relevant observations of the Tribunal are as follows:- “...Neither the AO nor the CIT has doubted the sales of theassessee and there can be no sales if there are no correspondingpurchases. The Hon'ble Punjab and Haryana High Court in thecase of CIT v. Brij Mohan Singh & Co. 209 ITR 753 has heldthat section 40A (3) of the Act must not be read in isolation orto the exclusion of rule 6DD of the Income-tax Rules, 1962 andthe Circular itself states that the circumstances narrated inparagraph 4 of the circular are not exhaustive but areillustrative and there could be cases other than those fallingwithin the above categories, which would also meet therequirements of rule 6DD (j). Thus, it is seen that the cashpayments made by the assessee were covered by rule 6DD (j)read with Board's circular No. 220 dated 30-5-1977 as certifiedby the Chartered Accountant given alongwith the audit reportand the AO had made necessary enquiries in this regard beforemaking the assessment and necessary confirmation weresupplied to the AO from parties who were supplyingagricultural implements and have no bank account as to whomcash payments were made...” It is clear from the above observations that the Assessing ITC No. 15 of 1999 Officer had made necessary inquiries and confirmations were furnished tothe Assessing Officer from the parties who were supplying agriculturalimplements and had no bank account. 6.In view of the above, no question of law arises. 7.Dismissed. (ADARSH KUMAR GOEL) JUDGE November 9, 2009 prem (GURDEV SINGH ) JUDGE