DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), CHANDIGARH, CHANDIGARH V. PUNJAB STATE COOP SUPPLY & MARKETING FEDERATION LTD, CHANDIGARH

ITA 982/CHANDI/2025

AI Insights

The case involves the Punjab State Cooperative Supply & Marketing Federation Ltd., a cooperative society assessed as an association of persons, which appealed against the additions and disallowances made by the Assessing Officer under section 143(3) of the Income Tax Act for the Assessment Year 2022-23. The CIT(A) had deleted these additions, following earlier Tribunal decisions. The revenue's appeal to the Tribunal was based on the contention that the CIT(A) had not adequately addressed the changes in facts or circumstances that would warrant a departure from the previous decisions. However, the Tribunal found that no new facts were presented that would justify a different conclusion from that reached in earlier years.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791641 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2022-2023
• Appeal Filed On: 04-08-2025
• Other Referred Cases: ITA No.998/Chd/2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.K. NOHRIA LD
• Assessee Lawyers: RAJAT KUMAR KUREEL LD
• Keywords: Depreciation; Commercial expediency; Notional interest; Unabsorbed depreciation
• Section: 143(3)

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH PHYSICAL HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं. / ITA No.982/CHANDI/2025 (िनधाŊरण वषŊ / Assessment Year: 2022-23) DCIT Circle-1(1) Room No. 214, Second Floor, Aaykar Bhawan, Sector 17E, Chandigarh 160017 बनाम/ Vs. Punjab State Coop Supply & Marketing Federation Ltd. Plot No.4, MARKFED Building, Sector 35B, Chandigarh, 160022 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.AAAAT-3454-G (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Sh. B.K. Nohria (CA) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Sh. Rajat Kumar Kureel (CIT) – Ld. DR सुनवाईकीतारीख/Date of Hearing : 19.11.2025 घोषणाकीतारीख /Date of Pronouncement : 08.12.2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by revenue for Assessment Year (AY) 2022-23 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 19.06.2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) of the Act on 13.03.2024. The Ld. AO made certain additions / disallowances in the assessment order which has been deleted by Ld. CIT(A) against Printed from counselvise.com 2 which the revenue is in further appeal before us. It is undisputed position that Ld. CIT(A) has merely followed the orders of Tribunal in assessee’s own case for earlier years. The latest order has been passed for AY 2015-16 in ITA No.998/Chd/2019 dated 28.02.2022, a copy of which has been placed on record. In the above background, the appeal is disposed-off as under. 2. The assessee is a cooperative society and assessed as association of person (AOP). The Ld. AO after scrutinizing the return of income and after analyzing the assessee’s replies and submissions as made during the course of assessment proceedings, made various disallowances. 2.1 Disallowance of Plantation Expenses The assessee incurred expenditure on account of plantation and horticulture activities. The same was denied by Ld. AO on the ground that such type of plantation and horticulture activities would not promote the business activities of the assessee. As such maintaining a green belt or doing horticulture activities would not tantamount to advertisement expenses. Accordingly, Ld. AO disallowed expenditure of Rs.4.60 Lacs as claimed by the assessee under this head. The Ld. Ld. CIT(A) deleted the same by following earlier decisions of Tribunal starting from AYs 2005-06 onwards. Aggrieved, the revenue is in further appeal before us. 2.2 Addition of notional interest on outstanding recoveries The assessee claimed interest expenditure of Rs.1107.18 Crores whereas it was having huge outstanding recoverable against Food Printed from counselvise.com 3 Corporation of India (FCI) and State Government. The Ld. AO concluded that the assessee was bearing the financial burden of its customers and there was no commercial expediency for such a transaction. Accordingly, Ld. AO computed notional interest of Rs.454.90 Crores and Rs.55.47 Crores respectively and added the same to the income of the assessee. Upon further appeal, Ld. Ld. CIT(A) deleted the same by following earlier decisions of Tribunal starting from AYs 2005-06 onwards. Aggrieved, the revenue is in further appeal before us. 3. The undisputed position that emerges is that Ld. CIT(A) has merely followed the earlier decisions of Tribunal favoring the assessee. No change in facts has been demonstrated before us. Therefore, we see no reason to interfere in the impugned order, in any manner. The Ld. CIT(A) has also directed Ld. AO to re-examine the entire pool of brought forward business losses and unabsorbed depreciation as available to the assessee as per returns of income and past assessments / appellate orders and allow full eligible amount for set-off in accordance with law. These are mere logical directions and accordingly, Ld. AO is directed to follow the same. 4. The appeal stand dismissed. Order pronounced on 08th December, 2025. -Sd- -Sd- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: Printed from counselvise.com 4 आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "