Shri Gendmal Bhikulal Banthia, Jalna V. Income-tax Officer, Parbhani

ITA 1337/PUN/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1987 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 31-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: SANJEEVKUMAR KABRA
• Keywords: Depreciation; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI G.S.PANNU, ACCOUNTANT MEMBER. ITA.NO.1337/PN/2011 (ASSTT. YEAR : 2006-07) SHRI GENDMAL BHIKULAL BANTHIA, C/O BANSILAL KABRA, ADVOCATE, 20, 1 ST FLOOR, AMBIKA MARKET, JALNA 431203. .. APPELLANT PAN: AALPB0797N VS. ITO, WARD-1(4), PARBHANI. .. RESPONDENT ASSESSEE BY : SHRI SANJEEV KUMAR KABRA DEPARTMENT BY : MS.ANN KAPTHUAMA DATE OF HEARING : 21.03.2013 DATE OF PRONOUNCEMENT : 22.03.2013 ORDER PER SHAILENDRA KUMAR YADAV, JM : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) ON THE FOLLOWING GROUNDS: 1. THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN M AKING ADDITION AT RS.2,47,639/- BY DISALLOWING DEDUCTION U/S.80IB( 11A) ON APPEAL THE LEARNED CIT(APPEALS) IS ERRED IN CONF IRMING THE ADDITION ON THE GROUND THAT THE APPELLANT IS NOT IN VOLVED IN THE BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOOD GRAINS AND HENCE THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80IB(11A). THE ADDITION MADE BY THE ASSESSING OFFICER MAY KIND LY BE DELETED. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF RUNNING A PETROL PUMP AN D WAREHOUSING. THE ASSESSEE HAS FILED RETURN OF INCOME ON 10.11.20 06 DECLARING TOTAL INCOME OF RS.3,08,660/-. THE ASSESSING OFFICER HAS ASSESSED THE INCOME OF THE ASSESSEE AT RS.6,29,888/- BY MAKING A DDITIONS OF RS.3,21,228/-, AS UNDER: 2 1 DISALLOWANCE OF DEDUCTION CLAIMED IN RE SPECT OF WAREHOUSING BUSINESS U/S.80IB(11A) RS.2,47,639/ - 2 DISALLOWANCE OF TRANSPORTATION EXPENSES RS. 25,000/ - 3 DISALLOWANCE OUT OF DEPRECIATION ON CAR FOR ALLEGED PERSONAL USE RS. 25,266/ - 4 DISALLOWANCE OUT OF TELEPHONE EXPENSES FOR ALLEGED PERSONAL USE RS. 6,259/ - 5 DISALLOWANCE OUT OF VEHICLE RUNNING & MAINTENANCE RS. 17,064/ - TOTAL RS.3,21,228/ - 3. THE MAIN ISSUE BEFORE US IS DISALLOWANCE U/S.80I B(11A) AT RS.2,47,629/- WHICH IS SUBJECT MATTER BEFORE US. D URING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE DOES NOT OWN ANY TRUCK FOR PROVIDING TRANSPORTATION FACILITY AND HENCE CANNOT PROVIDE THE SAME TO THE CUSTOMERS, I.E., FAR MERS WHO HAVE AVAILED THE FACILITY OF WAREHOUSING FROM THE ASSESS EE. THE ASSESSING OFFICER HELD THAT THE DEDUCTION U/S.80IB(11A) IS AV AILABLE TO THE ASSESSEES WHO ARE CARRYING ON INTEGRATED BUSINESS O F HANDLING, STORAGE AND TRANSPORTATION OF FOOD GRAINS. THEREFORE, HE I S NOT ENGAGED IN THE SAID INTEGRATED BUSINESS AND HENCE NOT ELIGIBLE FOR DEDUCTION U/S.80IB(11A). IN ORDER TO VERIFY WHETHER THE REQU IRED CONDITION HAS BEEN FULFILLED BY THE ASSESSEE, THE ASSESSING OFFIC ER HAS DEPUTED WARD INSPECTOR FOR SPOT VERIFICATION OF THE FACILITIES P ROVIDED BY THE ASSESSEE TO THE FARMERS. THE INSPECTOR VISITED THE SPOT ON 19.12.2008 AND SUBMITTED THE REPORT TO THE ASSESSING OFFICER WHICH IS REPRODUCED BY THE ASSESSING OFFICER IN PARA 5 OF THE ASSESSMENT O RDER, WHICH READS AS UNDER: AT THE TIME WATCHMAN OF THE WAREHOUSE WAS PRESENT. DURING THE COURSE OF INQUIRIES IT WAS GATHERED THAT THE RATE F OR KEEPING THE FOOD GRAINS IN THE WAREHOUSE WAS RS.5 PER BAG. IT I S ALSO GATHERED THAT WAREHOUSE IS NOT PROVIDED ANY VEHICLE FACILITI ES TO THE CUSTOMERS ONLY HAMALI CHARGES @ RS.1.50 AND WERE CH ARGES AT RS.2 PER BAG TO ARE RECOVERED FROM THE CUSTOMER. T HE MANAGER SHRI RAM PANDEY WAS ALSO CONTACTED ON MOBILE NO.942 0887385. HE ALSO CONFIRMED THE SAME ABOVE FACTS. HE ALSO ST ATED THAT THE VEHICLE FACILITIES ARE NOT PROVIDED BY THE OWNER BU T THE SAME HAS TO BE ARRANGED BY THE CUSTOMERS THEMSELVES. 3 4. THE ASSESSING OFFICER, THEREFORE, DISALLOWED THE CLAIM OF THE ASSESSEE U/S.80IB(11A) OF THE ACT AND ADDED THE SAM E AMOUNT TO THE INCOME OF THE ASSESSEE. MATTER WAS CARRIED BEFORE THE CIT(A), WHO HAS CONFIRMED THE ORDER OF THE ASSESSING OFFICER. SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF THE ASSESSEE. 5. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION ON THE GRO UND THAT THE APPELLANT IS NOT INVOLVED IN THE BUSINESS OF HANDLI NG, STORAGE AND TRANSPORTATION OF FOOD GRAINS AND HENCE THE ASSESSE E IS NOT ENTITLED TO DEDUCTION U/S.80IB(11A). THE ASSESSEE WAS NOT GIVEN PROPER OPPORTUNITY OF HEARING WITH REGARD TO DEDUCTION U/S .80IB(11A). ACCORDINGLY THE ORDER OF THE CIT(A) BE SET ASIDE AN D CLAIM OF THE ASSESSEE BE ALLOWED BECAUSE HE IS INVOLVED IN THE I NTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOOD GRA INS. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 6. FOR THE SAKE OF CONVENIENCE, THE PROVISIONS OF S ECTION 80IB(11A) ARE REPRODUCED AS UNDER: THE AMOUNT OF DEDUCTION IN A CASE OF [AN UNDERTAKI NG DERIVING PROFIT FROM THE BUSINESS OF PROCESSING, PRESERVATIO N AND PACKAGING OF FRUITS OR VEGETABLES OR [MEAT AND MEAT PRODUCTS OR POULTRY OR MARINE OR DAIRY PRODUCTS OR] FROM] THE I NTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOOD GRAINS, SHALL BE HUNDRED PER CENT OF THE PROFITS AND GAINS DERIVED FROM SUCH UNDERTAKING FOR FIVE ASSESSMENT YEARS BEGINNIN G WITH THE INITIAL ASSESSMENT YEAR AND THEREAFTER, TWENTY-FIVE PER CENT (OR THIRTY PER CENT WHERE THE ASSESSEE IS A COMPANY) OF THE PROFITS AND GAINS DERIVED FROM THE OPERATION OF SUCH BUSINE SS IN A MANNER THAT THE TOTAL PERIOD OF DEDUCTION DOES NOT EXCEED TEN CONSECUTIVE ASSESSMENT YEARS AND SUBJECT TO FULFILM ENT OF THE CONDITION THAT IT BEGINS TO OPERATE SUCH BUSINESS O N OR AFTER THE 1 ST DAY OF APRIL, 2009.] FROM THE ABOVE IT IS CLEAR THAT IN ORDER TO CLAIM D EDUCTION U/S.80IB(11A), THE ASSESSEE HAS TO EARN INCOME FROM INTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOOD GRAINS. THE MAIN REASON FOR REJECTING THE CLAIM OF THE ASSESSEE IS THAT THE ASSESSEE IS NOT PROVIDING FACILITY OF TRANSPORTATION OF FOOD GRAINS. THE ASSESSING 4 OFFICER AS WELL AS THE CIT(A) HAVE RELIED MAINLY ON THE REPORT OF THE INSPECTOR WHO VISITED THE SPOT ON 19.12.2008 AS REP RODUCED IN PARA 3 OF THIS ORDER. THERE IS NOTHING ON RECORD TO SUGGE ST THAT THE ABOVE SAID REPORT OF THE INSPECTOR RELIED BY THE ASSESSING OFF ICER WAS CONFRONTED TO THE ASSESSEE AT ANY POINT OF TIME. THE WORDINGS TR ANSPORTATION OF FOOD GRAINS DOES NOT INDICATE THAT TRANSPORTATION HAS TO BE DONE BY THE ASSESSEES OWN TRUCKS OR TRANSPORT SYSTEM. THE TRA NSPORTATION OF FOOD GRAINS MAY BE THROUGH HIRED VEHICLES AS WELL. THE ASSESSEE SHOULD NOT BE DEPRIVED OF BENEFICIAL PROVISIONS OF SECTION 80I B(11A) OF THE ACT BECAUSE CERTAINLY HE IS ENGAGED IN THE HANDLING, ST ORAGE AND SOME PART OF TRANSPORTATION OF FOOD GRAINS CANNOT BE RULED OU T. MOREOVER, SUCH CONCLUSION HAS BEEN ARRIVED AT BY THE ASSESSING OFF ICER AT THE STRENGTH OF INSPECTORS REPORT NOT CONFRONTED TO THE ASSESSE E WHICH IS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. IT IS SETTLED LE GAL POSITION THAT BENEFICIAL PROVISIONS SHOULD BE LIBERALLY INTERPRET ED IN FAVOUR OF THE ASSESSEE. TAKING OVER ALL SITUATION UNDER CONSIDER ATION AND TO ENCOURAGE THE STORAGE OF FOOD GRAINS AT DOORSTEPS O F FARMERS. THE STORAGE OF FOOD GRAINS IN WAREHOUSING AT DOOR STEPS WILL CERTAINLY IMPROVE THE ECONOMIC CONDITIONS OF FARMERS BY ENSUR ING THEM PROPER COST AT PROPER TIME AND THEY WILL ALSO BE SAVED PER PETUAL EXPLOITATION OF MIDDLE MEN. SUCH BENEFICIAL PROVISIONS SHOULD NOT BE SACRIFICED FOR TECHNICAL NARROW INTERPRETATION OF RELEVANT PROVISI ONS. EVEN MINOR TRANSPORTATION FACILITY SHOULD HELP ASSESSEE FOR CL AIMING BENEFIT OF PROVISIONS OF SECTION 80IB(11A) OF THE ACT. IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF THE ASSESSING OFFICER AS WEL L AS THE CIT(A) AND RESTORE THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE SAME AS PER ABOVE LEGAL DISCUSSION. THE ASSESS ING OFFICER IS DIRECTED ACCORDINGLY. 7. AS A RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF MARCH, 2013. SD/- SD/- ( G.S.PANNU ) ( SHAILENDRA KUMAR YAD AV ) ACCOUNTANT MEMBER JUDICIAL MEMBER 5 GSPS PUNE, DATED THE 22 ND MARCH, 2013 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ITO, WARD-1(4), PARBHANI. 3. THE CIT(A), AURANGABAD. 4. THE CIT, AURANGABAD. 5. THE DR A BENCH, PUNE. 6. GUARD FILE. BY ORDER PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.