MUNGI BROTHERS Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE appellant is a partnership firm. It is engaged in the business of processing raw cashew nuts and selling them. The purchases of raw cashew nuts are made through its sister-concern namely M/s Abhiruchi Departmental Stores in Belgaum and thereafter in another premises the processing is carried on. The premises in which M/s Abhiruchi Departmental Stores carries on its business is located in a place in the city of Belgaum to which the growers of the cashew nuts normally come and sell their products. For the year 1992-93, the assessing authority added a sum of Rs. 16,05,000 by invoking the provisions of Section 40a (3) of the IT Act (for short, 'the Act' ). These payments were issued to M/s Abhiruchi Departmental Stores. The assessing authority, noticing various cash payments contrary to the provisions of law, has chosen to proceed against the appellant. Aggrieved by the same, the appellant filed an unsuccessful appeal before the cit (A ). The order of the CIT (A) was subsequently confirmed by the Tribunal. In these circumstances, the assessee is therefore before us in this appeal.

(2.) HEARD Sri M. G. Kotresh, learned Counsel for the assessee. He would argue that all the authorities are wrong in the case on hand in subjecting the petitioner for payment of tax in the peculiar facts and circumstances of the case. The learned Counsel has explained that the transactions are made through agriculturists and they demand only cash payment. The assessee was obliged to make cash payment. Even otherwise, he would say that these payments are shown in the books of account maintained by them. The learned Counsel for the assessee, therefore, says Rule 6 (sic-6dd) is available to the appellant-assessee on the facts and circumstances of the case. He wants our interference.

(3.) PER contra, Sri E. R. Indrakumar, learned Counsel for the Revenue, supports the order of the authorities.