M/s. Vinayaka Agro Warehouse, Latur V. Commissioner of Income-tax,

ITA 1033/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 0964 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 16-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Difference of opinion; Assessment record; Reason to believe; Change of opinion
• Section: 143(3); 32; 263

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO.1033/PN/2014 % % / ASSESSMENT YEAR : 2009-10 M/S. VINAYAKA AGRO WAREHOUSE, PLOT NO.14, SURVEY NO.132, LONI, UDGIR 413517 DIST. LATUR PAN :AAHFV0172D . / APPELLANT V/S CIT, AURANGABAD . / RESPONDENT / APPELLANT BY : NONE (WRITTEN SUBMISSION) / RESPONDENT BY : SHRI RAJEEV KUMAR, CIT / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20-03-2014 PASSED U/S.263 BY THE CIT, AUR ANGABAD RELATING TO THE ASSESSMENT YEAR 2009-10. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERV ICE OF NOTICE ISSUED BY THE REGISTRY. HOWEVER, THE ASSESSEE HA S FILED WRITTEN SUBMISSION WITH A REQUEST TO CONSIDER THE SAME W HILE DECIDING THE APPEAL. THEREFORE, THE APPEAL IS BEING DECIDE D ON THE BASIS OF THE WRITTEN SUBMISSION FILED BY THE ASSESSEE AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. / DATE OF HEARING :01.09.2016 / DATE OF PRONOUNCEMENT:16.09.2016 2 ITA NO.1033/PN/2014 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF STORAGE OF FOOD GRAINS, FUMIGATION, HANDLING AND TRANSPORTATION UNDER THE NAME AND STYLE M/S. VINAYAK AGRO WAREHOUSE AT LONI. IT FILED ITS RETURN O F INCOME ON 14-09-2009 DECLARING TOTAL INCOME AT NIL AFTER CLAIMING DEDUCTION OF RS.17,39,521/- UNDER U/S.80IB(11A) OF THE I.T. ACT. THE AO COMPLETED THE ASSESSMENT U/S.143(3) ON 30-11-201 1 ACCEPTING THE SAID RETURNED INCOME. SUBSEQUENTLY, THE L D.CIT, ON VERIFICATION OF THE ASSESSMENT RECORD FOR THE IMPUGNED ASS ESSMENT YEAR, HAD REASON TO BELIEVE THAT THE ORDER PASSED U/S.1 43(3) DATED 30-11-2011 PASSED BY THE AO IS ERRONEOUS AS WELL AS PR EJUDICIAL TO THE INTEREST OF THE REVENUE FOR THE FOLLOWING REASONS AS MENTIONED BY HIM IN THE ORDER PASSED U/S.263 AND WHICH READS AS UNDER : (I) ON VERIFICATION OF P AND L ACCOUNT, IT IS SEEN T HAT YOU HAVE SHOWN FOLLOWING RECEIPTS FROM THE BUSINESS ACTIVITIES OF STORAGE OF FOOD GRAINS, FUMIGATION AND TRANSPORT FACILITY TO FARMERS. 1. FUMIGATION CHARGES RS.1,36,950/- 2. HANDLING CHARGES RS.1,75,167/- 3. TRANSPORTATION CHARGES RS. 12,940/- 4. WAREHOUSE RENT RS.21,88,520/- ------------------ RS.25,16,577/- ------------------ AFTER CLAIMING THE BUSINESS RELATED EXPENSES, NET PROFIT IS SHOWN AT RS.17,39,521/- AFTER CLAIMING DEDUCTION ULS.80IB(11A) OF THE ACT, WHICH WAS ALLOWED BY THE AO WHILE COMPLETING THE ASSESSM ENT U/S. 143(3) OF THE ACT. FROM THE AFORESAID DETAILS, IT IS G ATHERED THAT YOU HAVE SHOWN NOMINAL RECEIPTS FROM TRANSPORTATION. FURTH ER, THE RECORD DOES NOT SHOW ANY DOCUMENTARY EVIDENCE TO POINT OUT T HAT HANDLING AND TRANSPORTATION WAS BEING CARRIED OUT BY YOU. THE BALANCE-SHEET OF THE BUSINESS DOES NOT REFLECT ANY ASSETS OTHER THAN WAREHO USE BUILDING AND ALSO NO EXPENSES HAVE BEEN DEBITED TO THE P AND L ACCOUNT ON ACCOUNT OF FREIGHT ALE. ACCORDING TO PROVISIONS OF SEC . 80IB(11A) OF THE ACT, THIS DEDUCTION IS ALLOWABLE IN THE CASE OF AN UND ERTAKING DERIVING PROFIT FROM ITS INTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOOD GRAINS. IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE TO PROVE THAT YOU HAVE ALSO ENGAGED IN HAND LING AND TRANSPORTATION OF FOOD GRAINS, YOUR CLAIM FOR DEDUCTI ON U/S.80IB(11A) IS NOT FOUND TO BE ACCEPTABLE AND ALLOWABLE. THEREFO RE, THE DEDUCTION U/S. 80IB(11A) CLAIMED BY YOU AND ALLOWED BY THE AO DESERVES TO BE WITHDRAWN/CANCELLED. 3 ITA NO.1033/PN/2014 (II) ON VERIFICATION OF P AND L ACCOUNT AND BALANCE -SHEET, IT IS NOTICED THAT YOU HAVE NOT CLAIMED DEPRECIATION ON F IXED ASSETS SHOWN AT RS. 1,10,73,412/-. ACCORDING TO EXPLANATION 5 OF SECTION 32(1) OF THE ACT, DEPRECIATION ALLOWABLE U/S. 32 SHALL BE ALLOWED TO THE ASSESSEE WHETHER THE SAME HAS BEEN CLAIMED OR NOT IN COMPUTIN G HIS TOTAL INCOME. ACCORDINGLY, THE DEPRECIATION U/S.32 IS PROPO SED TO BE ALLOWED TO YOU. HE, THEREFORE, ISSUED A NOTICE U/S.263 OF THE ACT AND ASKE D THE ASSESSEE TO EXPLAIN AS TO WHY THE ORDER PASSED U/S.143 (3) SHOULD NOT BE SET ASIDE. 4. THE ASSESSEE EXPLAINED THAT THE FIRM HAS CONSTRUCTE D A RURAL GODOWN UNDER THE CENTRAL GOVERNMENT SCHEME OF RURAL G ODOWN SCHEME WHICH IS ALSO CALLED GRAMIN BANDHARAN YOJANA. T HE ASSESSEE HAS SATISFIED THE ENTIRE NORMS OF THE SCHEME AN D OBTAINED A CERTIFICATE OF REGISTRATION OF WAREHOUSING FROM DISTRICT RE GISTRAR WHICH IS MANDATORY FOR CLAIMING DEDUCTION AND SUBSIDY. IT HA S ALSO OBTAINED INSURANCE FOR PREMISES AS WELL AS FOR FOODGRAINS OF THE FARMS. IT WAS EMPHASIZED THAT THE ACT NOWHERE MENTIONS THAT THE ASSESSEE SHOULD OWN VEHICLES FOR TRANSPORTATION AND THE ASSESSEE IS PROVIDING TRANSPORT FACILITY THROUGH EXTERNAL AGENCIES AND THEY GOT LITTLE PART OF INCOME. IT WAS FURTHER EXPLAINED THAT MEREL Y BECAUSE THE ASSESSEE HAS NOT OWNED THE VEHICLES AND NOT DEBITE D THE TRANSPORTATION EXPENSES TO PROFIT AND LOSS ACCOUNT, THE DEDUCTION U/S.80IB(11A) CANNOT BE DENIED BECAUSE THE ASSESSEE HAS CREATED WAREHOUSE UNDER THE SCHEME OF RURAL GODOWN SCHEME. I T HAS OBTAINED THE WAREHOUSE LICENSE FROM APPROPRIATE AUTHORITY , OBTAINED INSURANCE FOR SAFETY OF FOOD GRAINS FOR THE FARMS, T HE JMC HAS VISITED GODOWN AND HAD GIVEN THE APPROVAL FOR SUBSID Y AFTER 4 ITA NO.1033/PN/2014 VERIFICATION OF WAREHOUSE INFRASTRUCTURE. THE FIRM IS PROVIDING TRANSPORTATION FACILITY FROM EXTERNAL AGENCIES TO THE FARMERS. 5. IT WAS FURTHER ARGUED THAT THE FIRM IS ELIGIBLE FOR DEDUC TION U/S.80IB(11A) OF THE ACT AS THE BASIC INTENTION BEHIND TH IS DEDUCTION WAS TO MOTIVATE INFRASTRUCTURE DEVELOPMENT IN R URAL AREA AND TO GIVE BEST PRICES TO THE FARMERS FOR THEIR COMMO DITIES WHICH HAVE BEEN SATISFIED. IT WAS ALSO MENTIONED THAT THE CASE CANNOT BE REOPENED U/S.263 OF THE I.T. ACT MERELY ON THE GROUND OF CHANGE OF OPINION. FOR THE ABOVE PROPOSITION, THE ASSESSEE RELIED ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. FAG BEARING INDIA LTD. ORDER DATED 01-04-2013. 6. HOWEVER, THE LD.CIT WAS NOT SATISFIED WITH THE ARGUMEN TS ADVANCED BY THE ASSESSEE. HE OBSERVED THAT THE AO I N THE ASSESSMENT ORDER AFTER OBTAINING AND VERIFYING THE PARTN ERSHIP DEED, DETAILS OF THE GROSS RECEIPTS FROM GODOWN, EXPENSES DEBITED TO PROFIT AND LOSS ACCOUNT AND COPY OF LICENSE FOR CARRYING ON BUSINESS OF WAREHOUSE ETC. ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(11 A) OF THE I.T. ACT. ACCORDING TO THE LD.CIT FROM THE ABOVE DE TAILS IT APPEARS THAT THE AO HAS EXAMINED THE CASE OF THE ASSE SSEE IN A ROUTINE MANNER WITHOUT VERIFYING THE BASIC CONDITIONS FOR A LLOWING THE DEDUCTION U/S.80IB(11A) OF THE I.T. ACT AS WELL AS CERT AIN CONDITIONS LAID DOWN U/S.80IB(2) FOR CLAIMING THIS DEDUCTION. ACCORDING TO THE LD. CIT A BARE READING OF SECTION 80IB(1 1A) SHOWS THAT THE DEDUCTION IS AVAILABLE TO AN UNDERTAKING DERIVING PROFIT FROM 3 BUSINESS ACTIVITIES, I.E. (A) HANDLING, (B) STORAGE AND (C) TRANSPORTATION OF GOOD GRAINS. ALL THESE 3 ACTIVITIES SHOULD BE INTEGRATED WITH EACH OTHER. THE SCHEME UNDER THIS SECT ION RELATES 5 ITA NO.1033/PN/2014 TO SERVICES IN CONNECTION WITH PRESERVATION OF FOODGRAINS P ROMOTED BY THE GOVERNMENT OF INDIA FOLLOWING THE NATIONAL POLICY IN R ESPECT OF HANDLING, STORAGE AND TRANSPORTATION OF FOODGRAINS. ELABO RATE GUIDELINES ARE PROVIDED FOR ELIGIBILITY OF THE SAID DEDUCTION U/S.80IB(11A). ON GOING THROUGH THE WAREHOUSE RENT RECE IPTS, HE OBSERVED THAT THE WAREHOUSING FACILITY WAS PROVIDED TO CE RTAIN BUSINESS ENTERPRISES FOR KEEPING THEIR GOODS IN THE WAREH OUSE. HE FURTHER OBSERVED THAT LUMPSUM AMOUNTS WERE SHOWN TO H AVE BEEN RECEIVED BY THE ASSESSEE ON SINGLE DAY. CONSIDERING THES E PAYMENTS ON ACCOUNT OF RENT HE WAS OF THE OPINION THAT IT IS DIFFICULT TO ACCEPT THAT THESE PAYMENTS WERE RECEIVED FROM THE SMALL FARMERS FOR KEEPING THEIR FOODGRAINS. 6.1 HE FURTHER OBSERVED THAT THE ASSESSEE FIRM IS HAVING FIXED ASSETS AT RS.1,10,73,412/- BUT NO DEPRECIATION HAS BEEN C LAIMED BY THE ASSESSEE EITHER IN THE PROFIT AND LOSS ACCOUNT OR IN THE COMPUTATION OF INCOME. ACCORDING TO HIM AS PER EXPLANATION 5 OF SECTION 32(1) DEPRECIATION ALLOWABLE U/S.32 SHALL BE ALLOWED TO THE ASSESSEE WHETHER THE SAME HAS BEEN CLAIMED OR NOT IN COMPUTING THE TOTAL INCOME. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND DISTINGUISHING THE VARIOUS DECISIONS CITED BEFO RE HIM THE LD.CIT HELD THAT THE ORDER PASSED BY THE AO IS ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE, THEREFORE, SET ASIDE THE ORDER BY INVOKING THE POWERS CONFERRED ON HIM U/S .263 AND DIRECTED THE AO TO REFRAME THE ASSESSMENT AFTER MAKING NECESSARY ENQUIRIES IN THIS REGARD. HE DIRECTED THE AO TO VERIFY TH E REGISTERS MAINTAINED AT WAREHOUSE IN REGARD TO MOVEMENT OF GOODS, TO VERIFY AS TO WHICH TYPES OF GOODS WERE KEPT IN THE WAREHOUSE AND TO V ERIFY AS TO WHETHER THE ASSESSEE FIRM IS SATISFYING THE CONDITIO NS LAID 6 ITA NO.1033/PN/2014 DOWN U/S.80IB(2) OF THE ACT. FURTHER, HE ALSO DIRECTED TH E AO TO COMPUTE DEPRECIATION ON THE FIXED ASSETS AS PER LAW AND ALLOW THE SAME TO THE ASSESSEE FIRM WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE FIRM. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUND : 1. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER U/S.263 OF I.T. ACT, 1961 PASSED BY CIT, AURANGABAD IS MERELY CHANGE IN OPINION. THE ORDER U/S.143(3) OF I.T. ACT, 1961 PASSED BY LD.AO DOES NOT IN ANY WAY REPRESENT ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE ACTION OF THE LD. CIT WAS WHOLLY UNREASONABLE, UNCALLED FOR AND BAD-IN-LAW. 8. THE ASSESSEE IN ITS WRITTEN SUBMISSION HAS MENTIONED T HAT AS PER THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL COMPANY LTD. VS. CIT REPORTED IN 243 ITR 83 T HE TWIN CONDITIONS, I.E. (A) THE ORDER OF THE AO SOUGHT TO BE REVISED IS ERRONEOUS AND (B) IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE MUST BE SATISFIED FOR ASSUMING JURISDICTION U/S.163. IF ONE O F THEM IS ABSENT RECOURSE CANNOT BE TAKEN U/S.263(1) OF THE I.T . ACT. THEREFORE, IF THE ORDER OF THE AO IS ERRONEOUS BUT IT IS N OT PREJUDICIAL TO THE INTEREST OF THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE RECOURSE CA NNOT BE TAKEN UNDER SECTION 263(1) OF THE ACT. IT HAS FURTHER BE EN MENTIONED IN THE WRITTEN SUBMISSION THAT DURING THE ASSES SMENT PROCEEDINGS U/S.143(3) THE ASSESSEE HAS FILED THE COPY OF AUDITED PROFIT AND LOSS ACCOUNT AND BALANCE SHEET ALONG WITH ALL A NNEXURES, COMPUTATION OF TOTAL INCOME AND AUDIT REPORT IN FORM 10CC B UNDER RULE 18BBB FOR CLAIMING DEDUCTION U/S.80IB(11A). DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO ISSUED A QUEST IONNAIRE. AT QUESTION NOS. 6 AND 7 THE AO HAD ENQUIRED ABOUT THE DETAILS OF 7 ITA NO.1033/PN/2014 GROSS RECEIPTS OF RS.3,25,057/- AND RENT RECEIPTS AT RS.2 1,88,520/-. THE ASSESSEE HAD GIVEN THE FULL DETAILS WHICH ARE AS UNDER : 1. FUMIGATION CHARGES RS.1,36,950/- 2. HANDLING CHARGES RS.1,75,167/- 3. TRANSPORTATION CHARGES RS. 12,940/- --------------------- RS.3,25,057/- 4. WAREHOUSE RENT RS.21,88,520/- ---------------------- TOTAL GROSS RECEIPTS RS.25,13,577/- --------------------- 9. ALL LEDGER ACCOUNT EXTRACTS AND ABOVE GROSS RECEIPTS WERE SUBMITTED AT THE TIME OF ASSESSMENT PROCEEDINGS WHICH WA S VERIFIED BY THE AO. FURTHER, DURING THE COURSE OF ASSESSMENT PR OCEEDINGS THE AO HAD ISSUED A QUESTIONNAIRE AND AT QUESTION NO.13 THE AO HAD ASKED THE DETAILS OF DEDUCTION CLAIMED UNDER CHAPTER VIA AND THE ASSESSEE HAS SUBMITTED THE DETAILS OF DEDUCTION CLAIME D UNDER THE SAID CHAPTER AMOUNTING TO RS.17,39,521/-. AFTER CONSID ERING THE VARIOUS DETAILS FILED BY THE ASSESSEE THE AO HAD ALLOWE D THE CLAIM OF DEDUCTION U/S.80IB(11A) AMOUNTING TO RS.17,39,521/- ACCEPTING THAT THE ASSESSEE DERIVES INCOME FROM INTEGRAT ED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOODGRA INS. SINCE THE AO HAD MADE PROPER ENQUIRY AND EXAMINED THE ACCOUNTS IT CANNOT BE SAID THERE WAS NON-APPLICATION OF MIND BY THE AO. THEREFORE, THE ACTION U/S.263 HAS TO BE HELD AS INVALID. F OR THE ABOVE PROPOSITION THE ASSESSEE RELIED ON THE FOLLOWING DECISIONS : 1. ANTALA SANJAYKUMAR RAVJIBHAI VS. CIT REPORTED IN (2012) 135 ITD 506 (RAJKOT TRIBUNAL) 2. ROSHANLAL VEGETABLE PRODUCTS PVT. LTD. VS. ITO REPO RTED IN 51 SOT 1 (URO) (ASR) (TRIBUNAL) 3. FINE JEWELLERY (INDIA) LTD. VS. ACIT REPORTED IN 19 ITR 746 (MUMBAI TRIBUNAL) 8 ITA NO.1033/PN/2014 10. IT HAS FURTHER BEEN MENTIONED IN THE WRITTEN SUBMISS ION THAT THE LD.CIT WHILE PASSING THE ORDER U/S.263 AT PARA 3.1.4 H AS DIRECTED THE AO TO MAKE SOME FURTHER ENQUIRY AND VERIFICA TIONS. RELYING ON VARIOUS DECISIONS AS MENTIONED IN THE WRITTEN SUBMISSION, THE ASSESSEE HAS STATED THAT ASSESSMENT FRA MED U/S.143(3) CANNOT BE REVISED ON THE GROUND THAT DESIRED ENQUIRY WAS NOT MADE : 1. AMRIK SINGH VS. ITO REPORTED IN (2003) 127 TAXMA NN 87 (MAG.) CHD.) (TRIBUNAL). 2. BALIJEES VS. ACIT REPORTED IN (2003) 127 TAXMANN 1 50 (MAG.) (CHD.) (TRIBUNAL) 11. REFERRING TO THE FOLLOWING DECISIONS THE ASSESSEE HAS STATED THAT WHERE THE AO DURING THE SCRUTINY ASSESSMENT PROC EEDINGS HAS RAISED A QUERY WHICH WAS ANSWERED BY THE ASSESSEE AN D THE AO IS SATISFIED BUT THE SAME WAS NOT REFLECTED IN THE ASSESSMEN T ORDER BY HIM A CONCLUSION CANNOT BE DRAWN BY THE CIT THAT NO PR OPER ENQUIRY WITH RESPECT TO THE ISSUE WAS MADE BY THE AO A ND ENABLE HIM TO ASSUME JURISDICTION U/S.263 OF THE I.T. ACT : 1. CIT VS. ASHISH RAJPAL REPORTED IN (2009) 320 ITR 6 74 (DELHI HIGH COURT) 2. VIKASH POLYMERS REPORTED IN (2010) 194 TAXMANN 57 (DELHI HIGH COURT) 12. IT HAS FURTHER BEEN MENTIONED IN THE SAID WRITTEN S UBMISSION THAT THE LD. CIT IN HIS ORDER NOWHERE HAS GIVEN A FINDING THAT THE ORDER PASSED BY THE AO ON THE ISSUES DISCUSSED THEREIN WAS ERRONEOUS. IN ABSENCE OF ANY SUCH FINDING BY THE CIT AS REQUIRED U/S.263 MERELY SAYING THAT THE ASSESSMENT ORDER ON T HOSE ISSUES 9 ITA NO.1033/PN/2014 WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE IS NOT SUFFIC IENT TO ASSUME JURISDICTION BY HIM U/S.263 OF THE I.T. ACT. 13. AS REGARDS THE NON CLAIMING OF DEPRECIATION IS CONCERN ED THE ASSESSEE HAS MENTIONED IN THE WRITTEN SUBMISSION THAT TH E HONBLE BOMBAY HIGH COURT IN THE CASE OF GODAVARI SUGAR MILLS VS. C IT REPORTED IN 208 ITR 801 AND THE HONBLE ANDHRA PRADE SH HIGH COURT IN THE CASE OF CIT VS. ANDHRA COTTON MILLS REPORTE D IN 228 ITR 30 HAVE HELD THAT ASSESSEE HAS AN OPTION NOT TO C LAIM DEPRECIATION. THE ASSESSEE HAS ALSO FILED A CHART SHOWING THAT EVEN IF DEPRECIATION IS CLAIMED THE TOTAL INCOME BECOMES NIL AND THERE IS NO LOSS OF REVENUE. THEREFORE, THE ORDER OF THE AO CANNO T BE SAID TO BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. 14. THE ASSESSEE HAS ALSO RELIED ON THE DECISION OF THE P UNE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI GENDMAL BHIKULAL B ANTHA VS. ITO VIDE ITA NO.1337/PN/2011 ORDER DATED 22-03-20 13 FOR A.Y. 2006-07 TO THE PROPOSITION THAT THE WORDS TRANSPORTA TION OF FOODGRAINS INDICATE THAT TRANSPORTATION HAS TO BE DONE BY THE ASSESSEES OWN TRUCKS OR TRANSPORT SYSTEM. TRANSPOR TATION OF FOODGRAINS MAY BE THROUGH HIRED VEHICLES AS WELL. THE ASSE SSEE SHOULD NOT BE DEPRIVED OF BENEFICIAL PROVISIONS OF SECTION 80 IB(11A) OF THE ACT BECAUSE CERTAINLY HE IS ENGAGED IN THE HANDLIN G, STORAGE AND SOME PART OF TRANSPORTATION OF FOODGRAINS CANNOT BE RULED OUT. FURTHER, IT HAS ALSO BEEN HELD THAT BENEFICIAL PROVISIONS SHO ULD BE LIBERALLY INTERPRETED IN FAVOUR OF THE ASSESSEE AND SUCH B ENEFICIAL PROVISIONS SHOULD NOT BE SACRIFICED FOR TECHNICAL NARROW INTERPRETATION OF RELEVANT PROVISIONS. EVEN MINOR TRANSPOR TATION 10 ITA NO.1033/PN/2014 FACILITY SHOULD HELP ASSESSEE FOR CLAIMING BENEFIT OF PROVISIONS O F SECTION 80IB(11A) OF THE I.T. ACT. 15. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER H AND HEAVILY RELIED ON THE ORDER OF THE CIT. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ANURAG RAD HESHAM ATTAL VS. ITO AND VICE-VERSA VIDE ITA NOS.829/PN/2012 AN D ITA NO.863/PN/2012 ORDER DATED 11-03-2016 HE SUBMITTED TH AT THE TRIBUNAL IN THE SAID DECISION HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE ON THE GROUND THAT ASSESSEE WAS UNABLE TO S HOW FROM THE RECORDS THAT THE ACTIVITIES OF HANDLING, STORAGE AND TRAN SPORTATION OF FOODGRAINS ALLEGEDLY CARRIED OUT BY THE ASSESSEE ARE PAR T OF ONE COMPOSITE ACTIVITY AND ARE INTEGRATED IN ANY MANNER. ACC ORDINGLY, THE CLAIM OF DEDUCTION U/S.80IB(11A) OF THE ACT WAS DENIED TO THE ASSESSEE. SINCE THE AO IN THE INSTANT CASE HAS NOT CAR RIED OUT THE REQUISITE ENQUIRY BEFORE ALLOWING THE CLAIM OF DEDUCTION U/S.80IB(11A) OF THE ACT, THEREFORE, THE ORDER OF THE AO HA S BECOME ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE RE VENUE. THEREFORE, THE LD.CIT WAS FULLY JUSTIFIED IN INVOKING THE POW ERS CONFERRED ON HIM UNDER SECTION 263 OF THE I.T. ACT AND T HEREBY SET ASIDE THE ORDER PASSED U/S.143(3) OF THE I.T. ACT. 16. WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE WRITTEN SU BMISSION FILED BY THE ASSESSEE. WE HAVE ALSO CONSIDERED THE MATER IAL AVAILABLE ON RECORD AS WELL AS THE VARIOUS DECISIONS RELIED O N BY THE ASSESSEE IN THE WRITTEN SUBMISSION. WE FIND THE AO IN THE INSTANT CASE, IN THE ORDER PASSED U/S.143(3) OF THE I.T. ACT, HAS ACCEPTED THE CLAIM OF DEDUCTION U/S.80IB(11A) AMOUNTING TO RS.17,39,521 /-. 11 ITA NO.1033/PN/2014 FROM THE WRITTEN SUBMISSION FILED BY THE ASSESSEE AS WELL A S ON PERUSAL OF THE ASSESSMENT FOLDER PRODUCED AT THE TIME OF HEARING OF THE APPEAL, WE FIND THE AO VIDE QUESTIONNAIRE FOR THE IMPUG NED ASSESSMENT YEAR ANNEXED TO THE NOTICE U/S.143(2) HAS AS KED THE ASSESSEE INTER ALIA VIDE Q.NO.6 TO FURNISH THE DETAILS OF TH E GROSS RECEIPTS SHOWN AT RS.3,25,057/- AND VIDE Q.NO.7 TO FURNISH NAME AND ADDRESS OF THE LANDLORD TO WHOM RENT HAS BEEN PAID AT RS.21,88,520/-. THE AO VIDE Q.NO.13 HAS ASKED FOR THE DETA ILS OF DEDUCTION CLAIMED UNDER CHAPTER VIA. FURTHER, THE ASSES SEE IN ITS COMPUTATION OF INCOME HAS CLEARLY MENTIONED THE DEDUCTION U/S.80IB IN RESPECT OF AN UNDERTAKING DERIVING PROFIT FROM T HE INTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATIO N OF FOODGRAINS AT RS.17,39,521/-. UNDER THESE CIRCUMSTANCES, IT CANNOT BE SAID THAT AO HAS NOT MADE PROPER ENQUIRY AN D THERE IS NON-APPLICATION OF MIND BY HIM. MERELY BECAUSE THE LD.CIT DOES NOT AGREE WITH THE MANNER OF ENQUIRY CONDUCTED BY THE AO, OR HE DOES NOT AGREE WITH THE VIEW TAKEN BY THE AO, IT CANNO T BE SAID THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTER EST OF THE REVENUE. DURING THE COURSE OF HEARING THE LD. DEPARTMEN TAL REPRESENTATIVE HAS FILED THE DETAILS OF WAREHOUSE RENT AT RS.21,88,520/-. FROM THE ABOVE IT IS SEEN THAT THE ASSES SEE DURING THE COURSE OF HEARING HAD GIVEN DATE-WISE RECEIPT OF WARE HOUSE RENT WHICH RUNS INTO SEVERAL PAGES. 17. IT HAS BEEN HELD IN VARIOUS DECISIONS INCLUDING THE DEC ISION OF HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL C OMPANY LTD. VS. CIT REPORTED IN 243 ITR 83 THAT FOR ASSUMING JU RISDICTION U/S.263 THE TWIN CONDITIONS, I.E. (A) THE ORDER MUST BE ERRON EOUS AND (B) THE ORDER MUST BE PREJUDICIAL TO THE INTEREST OF T HE REVENUE 12 ITA NO.1033/PN/2014 MUST BE FULFILLED. IN ABSENCE OF EITHER OF THE ABOVE THE LD.C IT IS PRECLUDED FROM ASSUMING JURISDICTION U/S.263 OF THE I.T. ACT. FURTHER, JURISDICTION U/S.263 CANNOT BE INVOKED ON DEBATA BLE ISSUES. AS MENTIONED EARLIER, THE ASSESSEE IN THE INSTANT CASE HAS GIVEN FULL DETAILS AS ASKED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS TOWARDS ITS CLAIM OF DEDUCTION U/S.80IB(11A) AMOUNTING TO RS.17,39,521/-. THE AO AFTER VERIFICATION OF THE DETAILS AS CALLED FOR BY HIM HAS ALLOWED SUC H CLAIM. 18. SO FAR AS THE NON-CLAIM OF DEPRECIATION IS CONCERNED , WE FIND FROM THE CHART FURNISHED BY THE ASSESSEE IN THE WRITTEN SUBMISSION THAT NON CLAIM OF DEPRECIATION BY THE ASSESSEE DOES NOT AMOUNT TO ANY LOSS OF REVENUE TO THE DEPARTMENT AND THEREFORE IT IS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE. SINCE IN THE IN STANT CASE THE AO AFTER CONSIDERING THE VARIOUS SUBMISSIONS MADE BY THE ASSESSEE FROM TIME TO TIME HAS ACCEPTED THE CLAIM OF DEDU CTION U/S.80IB(11A) AMOUNTING TO RS.17,39,521/-, THEREFORE, THE SAM E IN OUR OPINION CANNOT BE HELD TO BE ERRONEOUS. 19. SO FAR AS THE DECISION OF THE PUNE BENCH OF THE TR IBUNAL IN THE CASE OF ANURAG RADHESHYAM ATAL (SUPRA) RELIED ON BY T HE LD. DEPARTMENTAL REPRESENTATIVE IS CONCERNED WE FIND IN THAT CASE THE AO HAS GIVEN A FINDING THAT THE ASSESSEE IS NOT ENGAGED IN THE INTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATIO N OF FOODGRAINS SINCE THE ASSESSEE WAS NEITHER HAVING LABOUR O N ITS PAYROLL NOR THE ASSESSEE WAS HAVING OWN FLEET OF VEHICLES FOR TRANSPORTATION. FURTHER, THE ASSESSEE HAS NOT FILED THE AUDIT REPORT IN THE PRESCRIBED FORM WHICH WAS NECESSARY FOR CLAIMING DED UCTION 13 ITA NO.1033/PN/2014 U/S.80IB(11A) OF THE ACT. THE ASSESSEE WAS UNABLE TO SHO W FROM THE RECORDS THAT THE ACTIVITIES OF HANDING, STORAGE AND TRANSPORTATION OF FOODGRAINS ALLEGEDLY CARRIED OUT BY IT AR E PART OF ONE COMPOSITE ACTIVITY AND ARE INTEGRATED IN ANY MANNER . HOWEVER, IN THE INSTANT CASE THE FACTS ARE COMPLETELY DIFFERENT. TH E ASSESSEE HAS FURNISHED FULL DETAILS AND THE AO AFTER BEING SATISFIED WITH SUCH DETAILS HAS ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(11A) OF THE ACT. THEREFORE, THE DECISION RELIED ON BY THE LD. DEPARTMENTAL REPRESENTATIVE IS DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN VIEW OF THE ABOVE DISCUSSION, WE S ET ASIDE THE ORDER OF THE CIT PASSED U/S.263 OF THE I.T. ACT AND ALLOW THE GROUND RAISED BY THE ASSESSEE. 20. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16-09-2016. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; DATED : 16 TH SEPTEMBER, 2016. LRH'K ' (*+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % - THE CIT, AURANGABAD 4. & ))* , * , IQ.KS / DR, ITAT, A PUNE; 5. . / GUARD FILE. / BY ORDER , & ) //TRUE COPY// 01 ) * / SR. PRIVATE SECRETARY *, IQ.KS / ITAT, PUNE