Dismissing the appeal  the Court held that  the term produce in rule 6DD(e)(ii) was with reference to milk as a consequence of dairy farming. The fact that the milk was pasteurised by the company and thereafter, the pasteurised milk was distributed by the assessee to the dealers was immaterial. The cash payment should have been made to the cultivator, grower or producer of such articles, produce or products. The reference to “producer” in the conclusion of clause(e) of rule 6DD was clearly to a dairy farmer and not to a company. The term “producer” qua “dairy farming” had to be understood noscitur a sociis with the terms “cultivator” and “grower” qua agriculture, forestry, poultry farming, apiculture, etc., respectively. It could not include a company that was engaged in the activity of pasteurisation of milk, particularly bearing in mind the object of section 40A(3), being to discourage cash payments. Both entities, the company and the assessee had full access to banking facilities. The operation of section 40A(3) was absolute. Rule 6DD that carve out exceptions to the rigour of section 40A(3) did not envisage extension of that benefit to cash payments made by a distributor (assessee) to the company. There was no justification as to why the payments were made in cash or what the exigencies were that prevented the entities from transacting through the bank. The Tribunal was correct in sustaining the addition made under section 40A(3) for the assessment year  (AY. 2009-2010)