HAFIZ MUHAMMAD SAGEER QURESHI,BAREILLY vs. ASSESSING OFFICER, NATIONAL FACELESS ASSESSMENT CENTER (NFAC), DELHI

ITA 680/LKW/2024Status: DisposedITAT Lucknow25 May 2026AY 2014-156 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the commission payments received by the assessee corroborated his agency claim. It also observed that payments for livestock, being produce of animal husbandry, could potentially be outside Section 40A(3) due to Rule 6DD(e) and (k). However, the assessee had the primary onus to prove direct purchases from cattle owners.

What were the facts?

The Assessing Officer reopened the assessee's case due to a significant shortfall between bank credits and declared business receipts. The assessee claimed to have acted as a commission agent for procuring livestock on behalf of two companies, with payments made to villagers. The AO disallowed a large sum under Section 40A(3) for alleged cash payments violating the section, as the assessee failed to provide evidence for exemption under Rule 6DD.

What were the issues?

Whether the disallowance under Section 40A(3) was justified when the assessee acted as an agent procuring livestock from villagers, and if Rule 6DD provided an exemption for such transactions.

Which sections of the Income-tax Act were involved?

Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW ‘B’ BENCH, LUCKNOW

Hearing: 05.03.2026Pronounced: 25.05.2026

PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the order of the ld. CIT(A), NFAC under section 250 of the Income Tax Act on 17.09.2024, wherein the ld. CIT(A) has dismissed the appeal filed by the assessee against the order of the Assessing Officer passed under section 147 for the Assessment Year 2014-15, on 16.03.2022. The grounds of appeal are as under:- “1. The Ld. authorities below have clearly overlooked the findings of various inquiries made by Learned Assistant Director of Income Tax (Investigation), Bareilly in which it has been admitted and confirmed that appellant assessee worked for principals firms only on commission basis as commission agents & not on principal

The order continues below.

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