DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- SILCHAR, SILCHAR V. KOOMBER TEA COMPANY (P) LIMITED, KOLKATA

MA 32/GTY/2023

AI Insights

The case involves a Miscellaneous Application under section 254(2) of the Income Tax Act, filed by the Revenue against the order of the Income Tax Appellate Tribunal in ITA No. 48/GTY/2021. The Revenue's grievance was centered on the application of Rule 8(1) of the Income Tax Rules, 1962, which pertains to the apportionment of income between business and agricultural sources for tea manufacturers and growers. The Revenue contended that the Tribunal's order was contrary to this rule as it applied the rule at a stage of income computation where it should not have been applied. The assessee, Koomber Tea Company, represented by Shri Tanmoy Duta, AR, argued that the Revenue's application was based on a misinterpretation of the applicable legal provisions and precedents, particularly referencing a decision by the Hon'ble High Court of Kolkata which was not relevant to the assessee's case. The Tribunal, after considering the arguments and relevant legal precedents, dismissed the Revenue's application, affirming the relief granted to the assessee.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472596 (ITAT-GUWAHATI)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-10-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-05-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 07-12-2023
• Other Referred Cases: Singlo (India) Tea Ltd. Vs. CIT, Central (1), Kolkata, Madoorie Tea Estate Pvt. Ltd., Kolkata Vs. ACIT
• Laws Referred To: Income Tax Act, Income Tax Rules, 1962
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY JHA
• Assessee Lawyers: TANMOY DUTA
• Section: 254(2)

Judgement Text

" आयकर अपीलीय अधिकरण न्यायपीठ, गुवाहाटी । IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH, GUWAHATI BEFORE DR. MANISH BORAD, ACCOUNTANT MEMBER & SHRI SONJOY SARMA, JUDICIAL MEMBER MA No. 32/GTY/2023 (Arising in ITA No. 48/GTY/2021 for A.Y. 2019-20) DCIT, Circle- Silchar C.R. Building, PWD Road, Slichar, Assam, 788001 Vs Koomber Tea Company (P) Limited 4, Gurusaday Road, Kolkata, West Bengal, 700019 [PAN : AABCK2492C] आवेदक/ (Applicant) प्रत् यर्थी/ (Respondent) Assessee by : Shri Tanmoy Duta, AR Revenue by : Shri Sanjay Jha, DR सुनवाई की तारीख/Date of Hearing : 15.10.2024 घोषणा की तारीख /Date of Pronouncement : 18.10.2024 आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER: This Miscellaneous Application u/s 254(2) of the Act, at the instance of the Revenue is directed against the order of this Tribunal in ITA no. 48/GTY/2021, dated 19th June, 2023. 2. The grievance of the Revenue reads as under:- “8. The order of the Hon'ble ITAT appears to be contrary to the principle of Rule 8(1) of the Income Tax Rules, 1962 which only prescribes the portion of income of tea manufacturer and grower to be the income determined from the business and liable to tax being 40% of such income. This Rule of apportionment of income between income derived from business and those relating to agricultural income is applicable to income computed in accordance with the other provisions of the Act in computing income. It is not that Rule 8(1) should be applied at every stage of computation of income relating to the tea growing activities, manufacturing and selling by taxpayers in India. It is only after a positive income is arrived at, that the question of allocation as per Rule 8(1) arises. This view has been explained by the Hon'ble High Court, Kolkata in the case of Singlo (India) Tea Ltd. Vs. CIT, Central (1), Kolkata order dated 04.03.2016 reported in (2016 68 Taxmann.com 87 (Kolkata). In this case, it was held the Page | 2 MA No. 32/GTY/2023 M/s Koomber Tea Company (P) Ltd; A.Y. 2019-20 deduction u/s. 33AB is to be allowed from total computed income before application of Rule 8 to apportion of resultant income into non-taxable agricultural income and taxable business at the rate of 40%. It appears that the Hon'ble ITAT while upholding the disallowances u/s. 36(1)(va) and thereof restricting to 40%, has not considered the Hon'ble High Court's decision referred above. Therefore, considering the facts and in the circumstances of the case and in law, the Hon'ble Tribunal is requested to admit this Miscellaneous Application and adjudicate the grounds of the Department for the AY-2019-20 on merits and in the light of the decision dated 04.03.2016 of the Hon'ble Calcutta High Court in the case of M/s Singlo (India) Tea Limited Pvt. Ltd. vs. Commissioner of Income Tax, Central-I, Kolkata.” 3. On the other hand, the ld. Counsel for the assessee submitted that the judgement of Hon'ble High Court of Kolkata in case of M/S. Singlo (India) Tea Ltd vs CIT dated in ITA 360 of 2005 dated 4 March, 2016 deals with the issue of deduction u/s 33AB of the Act but there is no such issue in assessee’s appeal therefore it is not applicable and the contention of the revenue has no merits. 4. We have heard the rival contentions and perused the records placed before us. We notice that the issue before us in the impugned order was regarding disallowance u/s 36(1)(va) of the Act on account of delay in deposit of employees contribution towards provident fund at ₹17,30,407/-. This Tribunal on considering the ratio of the decision of co-ordinate bench Kolkata in the case of Madoorie Tea Estate Pvt. Ltd., Kolkata Vs. ACIT in ITA No. 760/KOL/2022 dated 28th February, 2023, held that the assessee being engaged in tea planation and manufacturing of tea is eligible for relief of 60% in terms of Rule 8(1) of the Income Tax rules, 1962 on the disallowance made u/s 36(i)(va) of the Act. In the instant Miscellaneous Application, the ld. DR has referred to the judgement of Hon'ble Kolkata High Court in case of M/S. Singlo (India) Tea Ltd (supra). We have perused the order of the Hon'ble High Court of Kolkata and find that the issue before the Hon'ble Court was regarding deduction u/s 33AB of the Act and it was held by the Hon'ble Court that prior to application of Rule 8(1) of the Page | 3 MA No. 32/GTY/2023 M/s Koomber Tea Company (P) Ltd; A.Y. 2019-20 Act, the assessee has to first claim the deduction u/s 33AB of the Act. However, in the instant case, the facts are completely different and they only relate to disallowance u/s 36(1)(va) of the Act and the assessee which has declared loss in the regular return was subjected to disallowance u/s 36(1)(va) of the Act and by virtue of Rule 8(1) of the Act 60% of such disallowance has been deleted by this Tribunal following the judicial precedents. We are therefore of the considered view that the miscellaneous application filed by the Revenue has no merit because no apparent mistake has been pointed out in the impugned order. 5. In the result, the MA of the Revenue in MA No.32/GTY/2023 is dismissed as per terms indicated hereinabove. Order pronounced in the Court on 18h October, 2024 at Kolkata. Sd/- Sd/- (SONJOY SARMA) (DR. MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated 18/10/2024 *SS, Sr.Ps आदेश की प्रतततिति अग्रेतषत/Copy of the Order forwarded to : 1. अिीिार्थी / The Appellant 2. प्रत्यर्थी / The Respondent 3. संबंतित आयकर आयुक्त / Concerned Pr. CIT 4. आयकर आयुक्त ( अिीि ) / The CIT(A)- 5. तवभागीय प्रतततनति , अतिकरण अिीिीय आयकर , गुवाहाटी /DR,ITAT, Guwahati, 6. गार्ड फाईि / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Sr. PS/ Assistant Registrar आयकर अिीिीय अतिकरण ITAT, Guwahati "