The Principal Commissioner Of v. Sea Hath Canning Company…

Santosh 1 tx90-17dt30-10-17 IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO.90 OF 2017 The Principal Commissioner of Income …..Tax, Panaji.Appellant Versus Sea Hath Canning Company…... Respondent. Ms Amira Razaq, Junior Central Govt. Standing Counsel for the Appellant. Coram : N.M. Jamdar & Prithviraj K. Chavan, JJ. P.C.: Date : 30 October 2017. The appeal is filed by the Revenue, challenging thedecision of the Income Tax Appellate Tribunal, Panaji Bench, Panajiin ITA No.37/PAN/2016 dated 10 May 2016. 2.The Tribunal was considering the appeal filed by theAppellant-Revenue against the order of the Commissioner of IncomeTax (Appeals) in Appeal No.123/CIT(A)PNJ-1/15-16 dated 28December 2015. 3.The Respondent is a firm, engaged in the business ofexport of fish and fish products. The Respondent-Assessee filed itsreturn of income on 31 December 2012. The Assessing Officer, by Santosh 2 tx90-17dt30-10-17 an order dated 19 March 2015, held that the payments made to thesuppliers of the Respondent-Assessee were made to the traders andnot to the fish vendors or producers and, therefore, an amount of ₹9605330/- was disallowed and added to the income under Section40A(3) of the Income Tax Act as the cash payments exceeded ₹20000/- An appeal was filed by the Respondent-Assessee before theCommissioner of Income Tax, which was partly allowed by theCommissioner by Order dated 28 December 2015 and disallowanceof ₹ 9329370/- was deleted and disallowance of ₹ 275960/-, wasconfirmed. As against this order passed by the Commissioner(Appeals), the appellant-Revenue filed an appeal before the Tribunal,which was dismissed by the Tribunal by the impugned order. 4.The learned Counsel for the Appellant submitted that thequestion of law that would arise for consideration in this appeal is,whether the payments made to various persons by the Respondent-Assessee would fall within the ambit of Rule 6DD(e) and Section40A(3), as they could not have been held to be payments for fish andfish products. 5.The Commissioner (Appeals), as well as the Tribunal,after considering the material, have rendered a factual finding thatthe payments to various persons were not bogus and they were for the Santosh 3 tx90-17dt30-10-17 purpose of fish or fish products. No perversity in this factual findingis pointed out. Once this factual finding is accepted, then thepayments will squarely fall within clause (3) of Rule 6DD of theIncome Tax Rules read with Section 40A(3) of the Act. Therefore, theCommissioner (Appeals), as well as the Tribunal, have rightly giventhe benefit to the Respondent-Assessee of Section 40A(e) read withRule 6DD(e). 6.In the circumstances, there is no merit in this appeal,which is accordingly dismissed. Prithviraj K. Chavan, J.N.M. Jamdar, J.