Joythi Dairy Pvt.Ltd., Hyderabad V. DCIT, Hyderabad

ITA 1293/HYD/2003

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3225 (ITAT-HYDERABAD)
• Duration Of Justice: 7 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-07-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 16-12-2003
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUDHAKAR
• Assessee Lawyers: M V JOSHI
• Keywords: Capital asset; Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBE R ITA NOS.339/HYD/2001,1293/HYD/03, :ASST. YEARS: 1 998-99, 1999- 00 & 1294/HYD/2003 & 2000-01 JYOTHI DAIRY PVT. LTD., JEEDIMETLA, HYDERABAD. (PAN: AAACJ 5066 A) VS DCIT, CIR-7(4), HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.V. JOSHI RES PONDENT BY : SHRI SUDHAKAR O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER: THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST SEPARATE ORDERS OF CIT (A), HYDERABAD AND THEY PERT AIN TO THE ASSESSMENT YEARS 1998-99 1999-2000 AND 2000-01. SI NCE COMMON ISSUES ARE INVOLVED IN ALL THESE THREE APPEALS, THE SE ARE TAKEN UP TOGETHER AND DISPOSED OFF BY THIS COMBINED ORDER FO R THE SAKE OF CONVENIENCE. 2. AT THE OUTSET WE FIND THAT THE COMMON ISSUE RA ISED IN ALL THESE APPEALS IS WHETHER THE PROCESS OF PASTEURIZAT ION OF MILK AMOUNTS TO PROCESS OF MANUFACTURE/PRODUCTION FOR THE PURPOS E OF CLAIMING DEDUCTION UNDER SECTION 80 IA OF THE ACT WHICH WAS DECIDED BY THE PUNE SPECIAL BENCH OF THE TRIBUNAL IN ITA NOS. 887/PN/1 991, 888/PN/1991 ITA NOS. 339,1293 & 1294 OF 2003 JYOTHI DAIR Y PVT. LTD. HYD. ================ ====== 2 AND 560/PN/1997 FOR ASSESSMENT YEARS 1986-87, 1987- 88 AND 1994-95 IN THE CASE OF B.G. CHITALE, BHILAWADI DATED 5 TH JUNE, 2008 AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. WE HAVE GON E THROUGH THE SAID ORDER SPECIAL BENCH OF THE TRIBUNAL AND FIND THAT T HE COMMON ISSUE RAISED IN THESE APPEALS IS QUITE SIMILAR AND IDENTI CAL TO THAT OF SPECIAL BENCH OF THE TRIBUNAL (SUPRA). SINCE FACTS AND THE CIRCUMSTANCES OF BOTH THESE CASES ARE QUITE SIMILAR, RESPECTFULLY FOLLOWI NG THE ABOVE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL, WE UPHOLD THE FI NDINGS OF THE CIT (A) FOR ALL THE YEARS UNDER CONSIDERATION AND REJECT TH E COMMON GROUND RAISED BY THE ASSESSEE. 3. THE OTHER EFFECTIVE GROUND RAISED BY THE ASSESS EE IN ITA NO. 339/HYD/2001 ONLY IS WITH REGARD TO DELETION OF THE SUM OF RS.53,908/- WHICH HAS BEEN ADDED TOWARDS THE LAND DEVELOPMENT E XPENDITURE PAID TO HUDA. BRIEF FACTS OF THIS ISSUE ARE THAT THE A SSESSEE IS IN THE BUSINESS OF PROCESSING AND SALE OF MILK AND MILK PR ODUCTS. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD PAID THE AMOUNT OF RS.53,908/- TO HUDA ON ACCOUNT OF LAND DEVELOPMENT EXPENDITURE. THE ASSESSING OFFICER HELD THAT THE EXPENDITURE WAS IN RELATION TO FIXED CAPITAL AND NOT CIRCULATING OR WORKING CAPITAL. HE TREATED THE EXPENDITURE AS CAPITAL IN NATURE AND DISALLOWED THE SAME. AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE WENT I N APPEAL BEFORE THE CIT (A). ON APPEAL, THE CIT (A) HELD THAT THE EXPE NDITURE WAS CLEARLY INCURRED IN CONNECTION WITH A CAPITAL ASSET AND THE REFORE REJECTED THE GROUND RAISED BY THE ASSESSEE ON THIS ISSUE BY HOLD ING THAT THE ASSESSING OFFICER HAD CORRECTLY TREATED THE SAME AS CAPITAL IN NATURE BY FOLLOWING A RECENT DECISION OF DELHI HIGH COURT IN THE CASE OF SHARPEDGE ITA NOS. 339,1293 & 1294 OF 2003 JYOTHI DAIR Y PVT. LTD. HYD. ================ ====== 3 LIMITED (114 TAXMAN 525). FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSING THE RELEVANT MATERIAL ON THIS ISSUE AND AF TER GOING THROUGH THE ORDERS OF THE AUTHORITIES, WE FIND THAT THE ASSESSE E HAD INCURRED THE EXPENDITURE OF RS.53,908/- TOWARDS LAND DEVELOPMEN T IN CONNECTION WITH CAPITAL ASSET. HENCE, THE SAME CANNOT BE TREA TED AS REVENUE EXPENDITURE AND WE ARE OF THE VIEW THAT THE CIT (A) IS PERFECTLY JUSTIFIED IN TREATING THE SAME AS CAPITAL IN NATURE. HENCE, WE DO NOT SEE ANY INFIRMITY IN THE ORDERS OF THE AUTHORITIES BELOW AN D ACCORDINGLY WE UPHOLD THE FINDINGS OF THE CIT (A) ON THIS ISSUE. I N VIEW OF THE ABOVE, WE REJECT THE GROUND RAISED BY THE ASSESSEE. 5. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4-7-2011. SD/- SD/- (G.C. GUPTA) (AKBER BASHA) VICE PRESIDENT. ACCOUNTANT MEMBER. DT/- 4-7-2011. COPY FORWARDED TO: 1. M/S. JYOTHI DAIRY DAIRY PVT. LTD., SURARAM INDU STRIAL AREA, SURARAM, HYDERABAD- 500 055. 2. 3. 4 DCIT, CIRCLE - 7(4), HYDERABAD. CIT (A), HYDERABAD. CIT, AP, HYDERABAD. ITA NOS. 339,1293 & 1294 OF 2003 JYOTHI DAIR Y PVT. LTD. HYD. ================ ====== 4 5. JMR* THE DR, ITAT, HYDERABAD. ITA NOS. 339,1293 & 1294 OF 2003 JYOTHI DAIR Y PVT. LTD. HYD. ================ ====== 5