DCIT, CIR-4, KOLKATA, Kolkata V. M/s Amalgamated Plantations Pvt Ltd, Kolkata

ITA 1358/KOL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1315 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-04-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 13-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Revenue expenditure
• Section: 142(1)

Judgement Text

ITA NOS.1358,1359/K/14 & CO NOS. 95,96/K/14 M/S. AMALGAMATED PLANTATIONS P.LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, KO LKATA BEFORE : SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBE R I.T.A NOS. 1358 & 1359/KOL/2014 A.YS : 2008-09 & 2009-10 D.C.I.T., CIR-4, KOLKATA, AAYKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069. APPELLANT -VS- M/S. AMALGAMATED PLANTATIONS PVT. LTD. 1, BISHOP LEFROY ROAD, KOLKATA-700020, PAN: AAGCA 6995B. RESPONDENT C.O NOS. 95 & 96/KOL/2014 [ARISING OUT OF ITA NOS. 1358 & 1359/KOL/2014 A.YS: 2008-09 & 2009-10] M/S. AMALGAMATED PLANTATIONS PVT. LTD. APPELLANT/CROSS OBJECTOR -VS- D.C.I.T., CIR-4(2), KOLKATA. DEPARTMENT/ RESPONDENT APPEARANCES BY: SHRI SALLONG YADEN, ADDL.CIT, LD. SR.DR S/SHRI KAUSHIK MUKHERJEE & SHASHANK KASAT, LD.ARS DATE OF HEARING : 23-08- 2017 DATE OF PRONOUNCEMENT : 2 5-10-2017 ITA NOS.1358,1359/K/14 & CO NOS. 95,96/K/14 M/S. AMALGAMATED PLANTATIONS P.LTD 2 SHRI. S.S.VISWANETHRA RAVI, JM: THESE TWO APPEALS BY THE REVENUE AND CORRESPONDING CROSS OBJECTION ARE DIRECTED AGAINST THE SEPARATE O RDERS BOTH DATED 12/03/2014 PASSED BY THE COMMISSIONER OF INCO ME TAX(APPEALS)-IV, KOLKATA FOR THE ASSESSMENT YEARS 2 008-09 AND 2009-10. 2. WE SHALL TAKE UP THE APPEAL IN ITA NO. 1358/K/20 14 FOR A.Y 2008-09 BY THE REVENUE. 3. THE APPELLANT REVENUE HAS RAISED FOLLOWING GROUN DS:- I). THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE MADE ON ACCOUNT OF CESS O N GREEN LEAF IGNORING THE FACT THAT A SLP HAS BEEN FILED BY THE DEPT, CHALLENGING THE ORD ER OF THE HONBLE KOLKATA HIGH COURT THAT INSPIRED THE DECISIONS QUOTED UPON BY THE LD. CIT(A) WHILE DELIBERATING THE ISSUE IN APPELLANTS FAVOUR. II). THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND ALSO IN LAW IN IGNORING THE FACT THAT THE SAID CONSULTANCY FEES WERE PAID TO SE EK EXPERTISE IN STARTING A ALTERNATE CROP IN THE TEA GARDEN WHICH THE APPELLANT INTENDS TO CRRY ON FOR A NUMBER OF YEARS. HENCE, THE FEES THUS PAID GIVES A BENEFIT OF ENDURI NG NATURE OVER A NUMBER OF YEARS AND THUS CANNOT BE TERMED AS A CAPITAL EXPENSE. III) THAT THE APPELLANT CRAVES FOR LEAVE TO ADD, D ELETE OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 4. GROUND NO.1 RELATES TO DELETION OF DISALLOWANCE MADE ON ACCOUNT OF GREEN LEAF. 5. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY AND INVOLVED IN THE BUSINESS OF MANUFACTURING OF TEA AN D FILED RETURN OF ITA NOS.1358,1359/K/14 & CO NOS. 95,96/K/14 M/S. AMALGAMATED PLANTATIONS P.LTD 3 INCOME ON 30-09-08 SHOWING NIL INCOME. NOTICES U /S. 143(2) AND 142(1) WERE ISSUED AND, IN RESPONSE TO THE SAID NOTICES, T HE ASSESSEE APPEARED. 6. THE CONTENTION OF THE ASSESSEE IS THAT IT HAS TE A GARDENS IN ASSAM AND THE PRODUCTION OF THE GREEN LEAF IS PURELY AN A GRICULTURAL ACTIVITY AND AS SUCH, THE CESS LEVIED ON THE PRODUCTION OF THE G REEN LEAF DOES NOT COME UNDER THE PURVIEW OF COMPOSITE INCOME AND CLAI MED DEDUCTION BEFORE APPLYING RULE 8 OF INCOME TAX RULES 1962. AC CORDING TO AO THE REVENUE CHALLENGED THE ORDER OF THE HON'BLE CALCUTT A HIGH COURT IN THE CASE OF AFT INDUSTRIES BEFORE THE HON'BLE SUPREME C OURT AND THE HONBLE SUPREME COURT ADMITTED SAID SLP AND IN VIEW OF PEND ENCY OF THE MATTER, THE AO TREATED THE CESS IS NON DEDUCTIBLE EXPENDITU RE FROM THE COMPOSITE INCOME OF THE ASSESSE AND ADDED AN AMOUNT OF RS. 3, 67,07,442/- TO THE TOTAL INCOME OF ASSESSEE. 7. BEFORE THE CIT-A THE ASSESSEE RELIED ON THE ORDERS OF THE CALCUTTA HIGH COURT IN THE CASE OF AFT INDUSTRIES LTD REPORT ED IN ( 2004) 270 ITR 167(CAL) AND THE GAUHATI HIGH COURT IN THE CASE OF JOREHAUT GROUP LIMITED VS. ACIT REPORTED IN 289 ITR 422 (GUA). AF TER CONSIDERING SUBMISSIONS OF THE ASSESSEE AND CASE LAWS RELIED ON BY THE ASSESSEE, THE CIT-A HELD AS UNDER:- 4.2 I HAVE EXAMINED THE ASSESSMENT ORDER AS WELL AS THE CONTENTION OF THE APPELLANT. IT IS FACT THAT THE MAT TER HAS NOW BEEN COMPREHENSIVELY ADJUDICATED BY THE HONBLE JURISDICTI ONAL HIGH COURT OF KOLKATA IN THE CASE OF CIT VS.- AFT INDUSTRIES L TD (2004) 270 ITR 167 AND THE ISSUE STANDS DECIDED IN FAVOUR OF THE A PPELLANT. ALTHOUGH AGAINST THIS JUDGEMENT, A SLP HAS BEEN ADMITTED IN THE SUPREME COURT, NEVERTHELESS, THE SUPREME COURT HAS NOT STAYED THE ORDER OF THE HIGH COURT OF KOLKATA. PENDIING ADJUDICATION OF TH E SUPREME COURT, THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF AFT ITA NOS.1358,1359/K/14 & CO NOS. 95,96/K/14 M/S. AMALGAMATED PLANTATIONS P.LTD 4 INDUSTRIES LTD, WILL HOLD. ADDITION OF RS. 3,67,07,44 2/- MADE ON THIS ACCOUNT IS DELETED. 8. WE FIND THAT, AS MATTER STOOD THUS, THE HONOURAB LE SUPREME COURT DISMISSED THE SLP FILED BY THE APPELLANT REVENUE AN D AGREED WITH THE INTERPRETATION OF SCOPE OF RULE 8 OF INCOME TAX RUL ES 1962 RENDERED BY THE HONOURABLE HIGH COURT OF CALCUTTA. THE LEARNED AR PLACED COPY OF SUCH ORDER BEFORE US AND SUBMITTED THAT THE PRESENT APPEAL MAY BE DISPOSED OF IN PURSUANCE OF THE DECISION OF HONOURA BLE SUPREME COURT AND LEARNED DR SUBMITS THAT THE APPELLANT REVENUE DID N OT SUCCEED IN SLP AND THE DECISION OF HONOURABLE HIGH COURT OF CALCUTTA H AS BECOME FINAL AND BINDING ON THE APPELLANT REVENUE IN VIEW OF THE CON FIRMATION OF THE SUCH DECISION BY THE HONOURABLE SUPREME COURT. THE RELEV ANT PORTION OF WHICH IS REPRODUCED HEREIN BELOW: THE RESPONDENT-ASSESSEE HAD PAID CESS ON GREEN LEA F TO THE GOVERNMENT OF ASSAM WHICH WAS LEVIED UNDER ASSAM TAXATION ( ON SP ECIFIED LAND) ACT, 1990. IN ITS INCOME TAX RETURN, IT HAD CLAIMED THE SAME AS DEDUC TION WHICH HAS BEEN ALLOWED BY THE HIGH COURT. THE RELEVANT DISCUSSION IN THIS BEHALF IS AS UNDER:- 'HOWEVER, THE LEARNED TRIBUNAL HAD HELD THAT THE DE DUCTION IS ELIGIBLE AFTER COMPUTING THE INCOME UNDER RULE 8 AND THE APPORTION MENT IS TO BE MADE ONLY AFTER THE INCOME IS SO COMPUTED. SUCH APPORTIONMENT CANNOT BE MADE BEFORE THE DEDUCTION. RULE 8 OF THE INCOME TAX: RULES, 1962 REQUIRES THAT THE COMPUTATION IS TO BE MADE AS IF BY FICTION THE ENTIRE INCOME OUT OF THE TEA GROWN AND MANUFACTURED AS INCOME ASSESSABLE UNDER THE INCOME TAX ACT, 1961. IN VIEW OF RULE 8, THE INCOME SO COMPUTED IS TO BE APPORTIONED 60: 40 OF WHICH 40 IS ASSESSABLE TO TAX UNDER THE ACT. IT DOES NOT PROVIDE THAT AFTER APPORTIONMENT OF THE 60 % OF THE INCOME SO COMPUTED SHALL AGAIN BE REQUIRED TO BE COMPUTED UNDER THE AGRICULTURAL INCOME TAX AC T. ON THE OTHER HAND, THIS 60% IS EXPOSED AND BECOMES EXIGIBLE TO TAX UNDER THE AGRIC ULTURAL INCOME TAX ACT. WITHOUT BEING REQUIRED TO BE ASSESSED UNDER THE SAID ACT BY REASON OF THE FICTION SO CREATED. THEREFORE, THE CESS PAID HAS RIGHTLY BEEN EXCLUDED WHILE COMPUTING THE INCOME UNDER RULE 8 OF THE TEA GROWN AND MANUFACTURED.' IN ARRIVING AT THE AFORESAID CONCLUSION, THE HIGH C OURT HAS REFERRED TO THE VARIOUS JUDGMENTS OF THIS COURT. WE ARE OF THE OPINION THAT THE HIGH COURT HAS RIGHT LY INTERPRETED THE SCOPE OF RULE 8 OF THE INCOME TAX RULES 1962. WE, THUS, FIND NO MERIT IN THIS APPEAL WHICH IS, ACCORDINGLY, DISMISSED. ITA NOS.1358,1359/K/14 & CO NOS. 95,96/K/14 M/S. AMALGAMATED PLANTATIONS P.LTD 5 9. IN ACCORDANCE WITH THE PRINCIPLE AS LAID BY THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF AFT INDUSTRIES WHICH HAS BEEN FURTHER STRENGTHENED BY DISMISSAL OF SLP BY THE HONBLE SU PREME COURT, WE HOLD THAT THE INCOME SO COMPUTED IS TO BE APPORTIONED 60 : 40 OF WHICH 40 IS ASSESSABLE TO TAX UNDER THE ACT. THUS, GROUND NO-1 RAISED BY REVENUE IS, ACCORDINGLY DISMISSED. 10. GROUND NO. 2 IS RELATING TO DELETION OF ADDITIO N MADE AS DISALLOWANCE OF RS. 47,18,760/- TOWARDS CONSULTANCY FEES PAID TO M/S. GLOBALLY MANAGED SERVICES (GMS). 11. THE AO ASKED THE DETAILS IN RESPECT OF THE CONS ULTANCY FEE. THE ASSESSEE VIDE ITS LETTER DT: 15-12-2010 & 21-12-20 10 STATED THAT THE ASSAM GOVERNMENT HAD GRANTED APPROVAL OF UTILIZATI ON OF 5% OF GRANT AREA OF EACH TEA ESTATE FOR LAND UTILIZATION FOR TH E USE OF ANY AGRICULTURAL ACTIVITY OTHER THAN TEA. IN THIS REGARD, THE ASSESS EE AVAILED THE SERVICES OF M/S. GLOBALLY MANAGED SERVICES [M/S.GMS] FOR ASSIST ING IN RAISING SUCH ALTERNATIVE CROPS BY PROVIDING EXPERTISE, KNOWHOW A ND PROCESS OF IDENTIFICATION OF SUITABLE AGRICULTURAL CROP FOR TR IALS, ASSESS POTENTIAL FOR SCALABILITY AND ALSO IDENTIFYING MARKETING CHANNEL OPTIONS. THE AO FOUND THE SUBMISSIONS OF THE ASSESSEE NOT ACCEPTABLE AND PROPOSED DISALLOWANCE. HOWEVER, THE ASSESSEE CONTENDED THAT THE SAID DISALLOWANCE SHOULD BE MADE ON COMPOSITE BUSINESS INCOME BY AP PLICATION OF RULE 8 IT RULES INSPITE OF WHICH THE AO DISALLOWED AN AMOU NT OF RS.47,18,760/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSES SEE. ITA NOS.1358,1359/K/14 & CO NOS. 95,96/K/14 M/S. AMALGAMATED PLANTATIONS P.LTD 6 12. AGGRIEVED, THE ASSESSEE CHALLENGED THE SAME BEF ORE THE CIT-A. BEFORE HIM THE ASSESSEE CONTENDED THAT THE SAID CON SULTANCY WAS TAKEN BY THE ASSESSEE ON A GOING CONCERN BASIS WHICH INVO LVED CONTINUOUS STUDY AND EXPERIMENTATION WITH VARIED TYPES OF ALTERNATE CROPS. THE SAID EXPENSES WERE INCURRED DURING THE NORMAL COURSE OF THE CARRYING ON THE ALTERNATE CROP RAISING BUSINESS ACTIVITY AND SHOULD BE TREATED AS REVENUE EXPENDITURE. THE ASSESSEE ALSO CONTENDED THAT THE C ONSULTANCY FEES INVOLVED COST TOWARDS VALIDATION AND EXPERIMENTATIO N PROCESS. THE ASSESSEE SUBMITTED THAT IT DID NOT RECEIVE ANY ENDU RING BENEFIT OUT OF SUCH CONSULTANCY AS MANY OF THE ALTERNATIVE CROPS, WHICH WERE IDENTIFIED AS FEASIBLE BY THE CONSULTANT HAS SUBSEQUENTLY BEEN FOUND TO BE NOT VIABLE AND TERMINATED AND THE ASSESSEE INCURRED CONTINUED LOSSES ON ACCOUNT OF RAISING OF SUCH ALTERNATIVE CROPS IN THE SUBSEQUENT YEARS. 13. CONSIDERING THE SUBMISSIONS THE CIT-A HELD THAT ALTERNATE COP FARMING HAS BEEN DONE BY THE ASSESSEE AS PART OF AND IN THE COURSE OF TEA PLANTATION BUSINESS WITHIN EXISTING AREA OF PLA NTATION LAND AND WITH THE EXISTING LABOUR DEPLOYED FOR TEA PLANTATION BUS INESS WITH COMMON MANAGEMENT AND FUND. HE DELETED THE IMPUGNED ADDITI ON/DISALLOWANCE BY STATING AS UNDER:- 10.3 I HAVE CONSIDERED THE ASSESSMENT ORDER AS WEL L AS THE SUBMISSION OF THE APPELLANT. IT IS SEEN THAT THE A.O. DISALLOWED THIS EXPENDITUR E BY HOLDING THAT THE SAME IS CAPITAL IN NATURE ON THE CONTENTION THAT BENEFIT OF THE SERVIC ES PROVIDED BY GMS WILL BE ENDURED BY THE APPELLANT OVER MANY YEARS. THE APPELLANT HAS SUBMITTED THAT OUT OF THE TOTAL A MOUNT OF RS. 47,18,760/-, RS. 6,74,160/- HAS BEEN INCURRED ON ACCOUNT OF ADVICE F OR FUTURE BUSINESS DEVELOPMENT AND THE CONSULTANCY BEING SUBJECT TO ACCEPTABILITY/NON ACCEPTABILITY BY THE MANAGEMENT, NO ENDURING BENEFIT HAS BEEN RECEIVED OUT OF SUCH CONS ULTANCY EXPENSES. AS REGARD THE BALANCE AMOUNT OF RS. 40,44,600/-, TH E APPELLANT HAS SUBMITTED THAT THE RUNNING BUSINESS WHICH WAS ACQUIRED BY THE APPELLAN T FROM TATA TEA LIMITED INCLUDED ITA NOS.1358,1359/K/14 & CO NOS. 95,96/K/14 M/S. AMALGAMATED PLANTATIONS P.LTD 7 ACTIVITIES OF GROWING AND MANUFACTURING OF TEA AND RAISING OF ALTERNATE CROPS WHICH IS INHERENT IN TEA INDUSTRY AND RUNS SIDE BY SIDE WITH THE MAIN BUSINESS. IN ORDER TO FURTHER DEVELOP AND CARRY ON WITH THE ALTERNATE CROP BUSINE SS ACTIVITIES ACQUIRED FROM TATA TEA LIMITED, THE APPELLANT ENGAGED GMS. THE FEES PAID T O GMS ARE IN RESPECT OF VARIOUS VALIDATION AND EXPERIMENTAL PROCESS DONE IN RESPECT OF ALTERNATE CROPS. IT WAS ALSO SUBMITTED THAT THE APPELLANT HAS INCURRED LOSSES ON VARIOUS ALTERNATE CROPS AND HAS DISCONTINUED DEVELOPMENT OF THE SAME, THUS NO ENDUR ING BENEFIT ACCRUED TO THE APPELLANT FROM THE SERVICES PROVIDED BY GMS. THE APPELLANT VIDE ADDITIONAL SUBMISSION HAS PLACED RELIANCE ON VARIOUS JUDICIAL PRONOUNCEMENTS AND HAS SUBMITTED THAT THE ALTERNATE CROP BUSINESS FORMED PART OF ITS EXISTING LINE OF BUSINESS AND WAS INTRINSICALLY LIN KED TO THE TEA BUSINESS O THE APPELLANT HAVING COMMON MANAGEMENT AND FUND. THE SAID CONSULT ANCY WAS THUS NOT IN RESPECT OF ANY NEW LINE OF BUSINESS AND HENCE CANNOT BE CONSID ERED AS CAPITAL IN NATURE. THE APPELLANT HAS FURTHER SUBMITTED THAT EVEN IF IT IS CONSIDERED AS NEW LINE OF BUSINESS SINCE THE BUSINESS WAS CARRIED ON WITH COMMON MANAGEMENT AND FUND, THE EXPENDITURE IN ACCOUNT OF CONSULTANCY CANNOT BE DISALLOWED AS CAPI TAL EXPENDITURE. 10.4 IT HAS THUS BEEN SUBMITTED RELYING ON VARIOUS JUDICIAL PRONOUNCEMENTS THAT THE SAID EXPENDITURE WAS MADE IN THE NORMAL COURSE OF CARRYI NG ON THE ALTERNATE CROP BUSINESS AND HENCE SHOULD BE ALLOWED AS A DEDUCTION UNDER SE CTION 37(1). IT IS A COMMON AFFAIR FOR BUSINESS ENTERPRISES TO T AKE ADVICES FROM SUBJECT EXPERTS ON VARIOUS ISSUES REQUIRED IN EFFICIENT RUNNING OF BUS INESS. SUCH CONSULTANCY EXPENSES ARE NORMALLY ALLOWED AS REVENUE EXPENDITURE UNLESS IT C AN BE PROVED THAT THE EXPENSES WERE NOT INCURRED FOR BUSINESS PURPOSES OR RESULTED IN S ETTING UP NEW LINE OF BUSINESS PROVIDING ENDURING BENEFIT. IT IS OBSERVED THAT THE A.D. HAS NOT DISPUTED THE INCURRENCE OF EXPENSES FOR BUSINESS PURPOSE. AS REGARD THE QUESTION AS TO WHETHER THE SAID CONSU LTANCY HAS PROVIDED ANY ENDURING BENEFIT TO THE APPELLANT, IT IS OBSERVED THAT THE A PPELLANT HAD OBTAINED CONSULTANCY OF RS. 40,44,600/- TO EXPAND THE ALTERNATE CROP BUSINESS A CQUIRED ON A GOING CONCERN BASIS FROM TATA TEA LIMITED. IT IS COMMON IN TEA PLANTATI ON BUSINESS TO IDENTIFY AND RAISE SUITABLE ALTERNATE CROPS FROM TIME TO TIME TO ACCOM MODATE THE OFF SEASONS IN THE CYCLIC BUSINESS OF TEA GROWING. THE ASSAM GOVERNMENT HAD G RANTED APPROVAL OF UTILIZATION OF 5% OF THE GRANT AREA OF EACH TEA ESTATE FOR LAND UT ILIZATION FOR USE OF ANY AGRICULTURAL ACTIVITY OTHER THAN TEA. THUS IT IS OBSERVED THAT T HE ALTERNATE CROP FARMING HAS BEEN DONE BY THE APPELLANT AS PART OF AND IN THE COURSE OF TE A PLANTATION BUSINESS WITHIN EXISTING AREA OF PLANTATION LAND AND WITH THE EXISTING LABOU RS DEPLOYED FOR TEA PLANTATION BUSINESS WITH COMMON MANAGEMENT AND FUND. THE SAID BUSINESS IS INTRINSICALLY LINKED TO APPELLANT'S PLANTATION BUSINESS AND HENCE DOES NOT STRICTLY CONSTITUTE A NEW LINE OF BUSINESS. FURTHER, THE ENDURING TEST HAS ALSO OTHER WISE NOT BEEN SATISFIED IN THE INSTANT CASE SINCE VARIOUS ALTERNATE CROPS WHICH WERE ACTUA LLY IMPLEMENTED BASED ON ADVICE, WERE NOT FOUND TO BE COMMERCIALLY FEASIBLE AND WERE SCRAPPED WITHIN SHORT SPAN OF TIME. SIMILARLY, THE APPELLANT HAS INCURRED RS. 6,74,160/ - ON ACCOUNT OF ADVICE IDENTIFYING AVENUES FOR FUTURE BUSINESS DEVELOPMENT AS PART OF MANAGING REGULAR DAY TO DAY BUSINESS WHICH DOES NOT SEEM TO PROVIDE ANY ENDURIN G BENEFIT. THE APPELLANT'S RELIANCE ON VARIOUS JUDICIAL PRONOUNCEMENTS IN SUPPORT OF AL LOWABILITY OF CONSULTANCY EXPENSES AS REVENUE EXPENDITURE MERITS CONSIDERATION. HENCE, AD DITION ON THIS ACCOUNT OF RS. 47,18,760/- IS DELETED. 14. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L ON RECORD. WE FIND THAT THE LD.AR REITERATED THE SUBMISSIONS AS M ADE BEFORE THE AO AS WELL AS THE CIT-A. THE CIT-A FOUND THAT THE EXPEND ITURE INCURRED BY THE ITA NOS.1358,1359/K/14 & CO NOS. 95,96/K/14 M/S. AMALGAMATED PLANTATIONS P.LTD 8 ASSESSEE DURING NORMAL COURSE OF BUSINESS OF TEA PL ANTATION AND THE ALTERNATIVE CROP FARMING RESULTED INTO THE LOSSES A ND THE ASSESSEE TERMINATED RAISING OF SUCH ALTERNATE CROP IN SUBSEQ UENT YEARS AND AS SUCH THE EXPENDITURE INCURRED DID NOT GIVE A LONG LASTIN G BENEFIT TO THE ASSESSEE. WE FIND THERE IS CONTINUITY OF BUSINESS W ITH COMMON MANAGEMENT AND FUND. WE FURTHER FIND THAT THE EXPE NSES IN PAYING THE CONSULTANCY FEES IS NOT FOR THE NEW LINE OF BUSINES S AND IT WAS INCURRED FOR RAISING ALTERNATE CROP UNDER THE PERMISSION OF ASSA M GOVERNMENT TO UTILIZE THE SAME LAND WHICH IS UNDER TEA PLANTATION . THEREFORE, IN OUR OPINION, THE ASSESSEE IS ENTITLED TO CLAIM SUCH EXP ENDITURE AS REVENUE EXPENDITURE. IN VIEW OF ABOVE, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE CIT-A IN DELETING THE SAME AND UPHOLD THE SA ME. GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 15. THE APPEAL IN ITA NO. 1358/KOL/2014 FOR A.Y 200 8-09 OF THE REVENUE IS DISMISSED. 16. NOW, WE SHALL TAKE UP THE APPEAL IN ITA NO. 13 59/KOL/2014 A.Y 2009-10 BY THE REVENUE. 17. THE APPELLANT REVENUE HAS RAISED FOLLOWING GROU NDS:- I). THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE MADE ON ACCOUNT OF CESS O N GREEN LEAF IGNORING THE FACT THAT A SLP HAS BEEN FILED BY THE DEPT, CHALLENGING THE ORD ER OF THE HONBLE KOLKATA HIGH COURT THAT INSPIRED THE DECISIONS QUOTED UPON BY THE LD. CIT(A) WHILE DELIBERATING THE ISSUE IN APPELLANTS FAVOUR. II). THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND ALSO IN LAW IN IGNORING THE FACT THAT THE SAID CONSULTANCY FEES WERE PAID TO SE EK EXPERTISE IN STARTING A ALTERNATE CROP IN THE TEA GARDEN WHICH THE APPELLANT INTENDS TO CRRY ON FOR A NUMBER OF YEARS. HENCE, THE FEES THUS PAID GIVES A BENEFIT OF ENDURI NG NATURE OVER A NUMBER OF YEARS AND THUS CANNOT BE TERMED AS A CAPITAL EXPENSE. ITA NOS.1358,1359/K/14 & CO NOS. 95,96/K/14 M/S. AMALGAMATED PLANTATIONS P.LTD 9 III) THAT THE APPELLANT CRAVES FOR LEAVE TO ADD, D ELETE OR MODIFY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 18. GROUND NO.1 RELATES TO DELETION OF DISALLOWANCE MADE ON ACCOUNT OF GREEN LEAF. 19. THIS GROUND NO-1 IS SIMILAR TO THAT OF GROUND N O.1 RAISED IN ITA NO. 1358/KOL/2014 FOR THE A.Y 2008-09 OF THE RE VENUE, WHICH WE HAVE ALREADY DISCUSSED AND DISPOSED OF THE SAME IN PARAS HEREIN ABOVE VIDE PARAS 4 TO 9 OF THIS ORDER . FOLLOWING THE SAME, THIS GROUND NO-1 OF THE REVENUE IS LIABLE TO BE DISMISSED AND ACCORDINGLY, IT IS DISMIISED. 20. GROUND NO. 2 IS RELATING TO DELETION OF ADDITI ON MADE AS DISALLOWANCE OF RS. 27,13,834/- TOWARDS CONSULTANCY FEES PAID TO M/S. GLOBALLY MANAGED SERVICES (GMS). 21. THIS GROUND NO-2 IS SIMILAR TO THAT OF GROUND N O.2 RAISED IN ITA NO. 1358/KOL/2014 FOR THE A.Y 2008-09 OF THE RE VENUE, WHICH WE HAVE ALREADY DISCUSSED AND DISPOSED OF THE SAME PARAS HEREIN ABOVE VIDE PARAS 11 TO 14 OF THIS ORD ER. FOLLOWING THE SAME, THIS GROUND NO-2 OF THE REVENUE IS LIABLE TO BE DISMISSED AND ACCORDINGLY, IT IS DISMISED. 22. THE APPEAL IN ITA NO. 1359/KOL/2014 FOR THE A.Y 2009-10 OF THE REVENUE IS DISMISSED. ITA NOS.1358,1359/K/14 & CO NOS. 95,96/K/14 M/S. AMALGAMATED PLANTATIONS P.LTD 10 23. NOW COMING TO CO NOS. 95 & 96/KOL/2014 ARISING OUT OF ITA NOS 1358 & 1359/KOL/2014 FOR THE A.YS 2008-09 & 2009-10 BY THE ASSESSE. 24. IT IS NOTICED THAT THE CROSS OBJECTIONS WERE FI LED WITH A DELAY OF 10 DAYS, BUT, HOWEVER, WE FIND NO PETITION FILED SEEKI NG TO CONDONE THE SAID DELAY. TAKING INTO CONSIDERATION SUBMISSIONS AND TH E CONTENTION OF THE ASSESSE RAISED IN RESPECT OF CONSULTANCY FEE PAID T O GMS FOR RAISING ALTERNATE CROP BEFORE THE AO AND CIT-A THAT THE DIS ALLOWANCE SHOULD BE MADE APPLICABLE BEFORE APPLYING OF RULE 8 OF THE IT RULES. WE FIND, INSPITE OF MAKING SPECIFIC GROUND BEFORE THE CIT-A AND NO F INDING WAS RENDERED ON THE SAID ISSUE, BUT, HOWEVER, HAS GIVEN RELIEF T O THE ASSESSEE ON MAIN DISALLOWANCE INVOLVING THE DEDUCTION TOWARDS CONSUL TANCY FEE, FOR WHICH, WE HAVE ALREADY DISCUSSED AND DISPOSED OF THE SAME CONCURRING WITH THE VIEW OF THE CIT-A. IN VIEW OF THE SAME, BOTH THE CR OSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. 25. IN THE RESULT, BOTH THE APPEALS OF REVENUE IN I TA NOS. 1358 & 1359/KOL/2014 FOR THE A.YS 2008-09 & 2009-10 AND TH AT OF COS IN NOS. 95 & 96/KOL/2014 FOR THE A.YS 2008-09 & 2099-10 OF ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25- 10-2017. SD/- SD/- J. SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 25-10-2017 ITA NOS.1358,1359/K/14 & CO NOS. 95,96/K/14 M/S. AMALGAMATED PLANTATIONS P.LTD 11 COPIES TO : **PP/SPS (1) APPELLANT/DEPARTMENT: THE DCIT, CIR-4, KOL., P- 7 CHOWRINGHEE SQUARE, KOLKATA-69. (2) RESPONDENT/ASSESSEE: M/S. AMALGAMATED PLANTATIO NS PVT. LTD., 1, BISHOP LEFROY ROAD, KOLKATA-20. (3)COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SR.PS/H.O.O ITAT, KOLKATA