M/s Namdhari Seeds Pvt. Ltd., Bangalore V. ACIT, Bangalore

ITA 1232/BANG/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5381 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-04-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 29-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JASON P BOAZ CITI
• Keywords: Business income
• Section: 143(3); 115JB; 10; 154

Judgement Text

PAGE 1 OF 4 ITA N O.1232/BANG/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A' BEFORE DR. O K NARAYANAN, VICE PRESIDENT AND SHRI GEORGE GEORGE K, J.M. ITA NO.1232/BANG/09 (ASST. YEAR 2001-02) M/S NAMDHARI SEEDS PVT. LTD., URAGAHALLI VILLAGE, BIDAI POST, BANGALORE-9. - APPELLANT VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-12(21), BANGALORE. - RESPONDENT APPELLANT BY : SMT. SHEETAL, ADVOCATE RESPONDENT BY : SHRI JASON P BOAZ, CIT-I O R D E R PER GEORGE GEORGE : THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE CIT(A)'S ORDER DATED 20.2.2009 IN RELATION TO ASST. YEAR 2001-02. THE IMPUGNED ORDER OF THE CIT(A) EMANATES FROM THE ORDER GIVING EFFECT TO THE ORDER OF ITAT AND ORDER U/S 154 DATED 18.9.2007. 2. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS:- THE ASSESSEE IS A PRIVATE LIMITED COMPANY. IT IS ENGAGED IN THE BUSINESS OF GROWING AND PROCESSING O F HYBRID SEEDS. THE CASE OF THE ASSESSEE FOR THE CONCERNED YEAR WAS SELECTED FOR SCRUTINY AND ORDER U/S 143(3) WAS PASSED ON 29.3.20 04. IN THE SAID PAGE 2 OF 4 ITA N O.1232/BANG/2009 2 ORDER, THE ENTIRE AGRICULTURAL INCOME CLAIMED BY TH E ASSESSEE AS EXEMPT U/S 10 OF THE I T ACT WAS BROUGHT TO TAX AS BUSINESS INCOME. 3. ON APPEAL, THE CIT(A), UPHELD THE ORDER OF THE ASSESSING OFFICER. 4. ON FURTHER APPEAL, THE TRIBUNAL (ITA NO.3102 / BANG/ 2004 DATED 14.7.2006) HELD THAT 90% OF INCOME CLAIM ED BY THE ASSESSEE AS EXEMPT U/S 10(1) IS AGRICULTURAL INCOME AND THE BALANCE 10% IS NON AGRICULTURAL INCOME. 5. THE ASSESSING OFFICER GAVE EFFECT TO THE ABOVE ORDER OF THE ITAT VIDE HIS ORDER DATED 18.9.2007 AND IN T HE SAME ORDER, HE ALSO PASSED AN ORDER U/S 154 WHEREBY, HE DETERMI NED THE INCOME OF THE ASSESSEE U/S 115JB OF THE ACT. 6. AGGRIEVED BY THE ORDER U/S 154, THE ASSESSEE FI LED AN APPEAL BEFORE THE CIT(A). 7. BEFORE THE FIRST APPELLATE AUTHORITY, IT WAS SU BMITTED THAT THE ASSESSING AUTHORITY OUGHT TO HAVE APPRECIA TED THAT THERE IS NO MISTAKE APPARENT FROM RECORD AND HIS ACTION OF I NVOKING THE PROVISIONS OF SECTION 154 TO LEVY TAX ON ASSESSEE U NDER THE PROVISIONS OF SECTION 115JB IS WITHOUT LEGAL SANCTI ON. IT WAS FURTHER SUBMITTED, THE ASSESSING AUTHORITY SHOULD H AVE APPRECIATED THAT WHEN COMPUTING THE BOOK PROFITS UNDER THE PROV ISIONS OF SECTION 115JB, HE OUGHT TO HAVE REDUCED THE AGRICUL TURAL INCOME PAGE 3 OF 4 ITA N O.1232/BANG/2009 3 FROM THE NET PROFITS, AS SHOWN IN THE P&L ACCOUNT, IN VIEW OF EXPLANATION 2 TO SECTION 115JB OF THE ACT. 8. AS REGARDS THE PRELIMINARY ISSUE THAT THE PROCE EDINGS U/S 154 CANNOT BE INVOKED FOR THE PURPOSE OF COMPUT ATION OF MAT LIABILITY, THE CIT(A) HELD THAT THE PROVISIONS OF S ECTION 115JB BEING MANDATORY, THERE CANNOT BE A DEBATE ON ITS APPLICAB ILITY ON THE ASSESSEE COMPANY. AS REGARDS THE ISSUE ON MERITS, T HE CIT(A) HELD THAT ' IN DETERMINING THE BOOK PROFIT OF THE APPELLANT FOR THE PURPOSE OF COMPUTING INCOME U/S 115JB, THE AO IS DIRECTED T O REDUCE THE APPELLANT'S AGRICULTURAL INCOME (DETERMINED AS PER ORDER OF CIT(A)/HON'BLE ITAT) FROM THE NET PROFIT OF THE AP PELLANT AS SHOWN IN THE PROFIT AND LOSS ACCOUNT FOR THE RELEVANT PRE VIOUS YEAR PREPARED U/S 115JB(2)'. 9. AT THE VERY OUTSET, THE LEARNED DR SUBMITTED TH AT THE GROUNDS RAISED BY THE ASSESSEE IS NOT CONNECTED WIT H THE ISSUE ARISING FROM THE IMPUGNED ORDER OF THE CIT(A) DATED 20.2.2009. THE ISSUE THAT WAS CONSIDERED BY THE CIT(A) IN HIS ORDER DATED 20.2.2009 WAS THE AO JUSTIFIED IN INVOKING THE PRO VISIONS OF SECTION 115JB OF THE ACT AND RAISING A DEMAND OF RS .76,54,191/- IN A RECTIFICATION PROCEEDINGS U/S 154 OF THE ACT. IT WAS SUBMITTED BY THE LEARNED DR THAT THE ASSESSEE IN THE GROUNDS HAS CHALLENGED THE CIT(A)'S CONFIRMATION OF AO'S ACTION IN TREATING 10 % OF AGRICULTURAL INCOME DECLARED BY THE ASSESSEE AS BUS INESS INCOME. PAGE 4 OF 4 ITA N O.1232/BANG/2009 4 10. ON THE OTHER HAND, THE LEARNED AR WAS NOT ABLE TO CONTROVERT THE CONTENTION RAISED BY THE LEARNED DR. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIALS ON RECORD. AS RIGHTLY POINTED OUT BY THE LEARNED DR, THE GROUNDS RAISED IN THIS APPEAL DOES NOT ARISE OUT OF THE IMPUGNED ORDER OF THE CIT(A) DATED 20.2.2009; HENCE, THE GRO UNDS AGITATED BEFORE US ARE REJECTED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS DISMISSED. THE ORDER IS PRONOUNCED ON .26TH..APRIL, 2010 SD/- SD/- (DR. O K NARAYANAN) (GEORGE GEORGE K) VICE PRESIDENT JUDICIAL MEMBER BANGALORE, DT.26/4/2010 COPY TO : 1. THE ASSESSEE 2.THE REVENUE 3. THE CIT(A) CONCE RNED. 4. THE CIT CONCERNED. 5. THE DR 6. GUARD FILE. 7. GF, ITAT, NEW DELHI. MSP/16.4. BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.