Agri Gold foods and Farm products Limited, Vijayawada V. Asst.Commissioner of Income Tax, Circle-2(1), Vijayawada

ITA 2000/Hyd/2017

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3274 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 6 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-03-2024
• Assessment Year: 2007-2008
• Appeal Filed On: 03-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Difference of opinion; Change of opinion
• Section: 148; 143(3); 142(1); 143(1); 143(2)

Judgement Text

आयकर अपीलीयअधिकरण, विशाखापटणम पीठ, विशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्ि ू रु आर एल रेड्डी, न्याययक सदस्य एिं श्री एस बालाक ृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./ I.T.A. No.2000/Hyd/2017 (निर्धारण वर्ा / Assessment Year :2007-08) Agri Gold Foods and Farm Products Limited, D.No.40-6-3, NSS Rao Street, Old Revenue Colony, Labbipet, Vijayawada. PAN: AABCA 8733 E Vs. The Asst. Commissioner of Income Tax, Circle-2(1), Vijayawada. (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधर्थी की ओर से/ Assessee by : None प्रत्यधर्थी की ओर से / Revenue by : Dr. Satyasai Rath, CIT-DR स ु िवधई की तधरीख / Date of Hearing : 20/03/2024 घोर्णध की तधरीख/Date of Pronouncement : 26/03/2024 O R D E R PER S. BALAKRISHNAN, Accountant Member : This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeals), Vijayawada in ITA No. 60/CIT(A)/VJA/2015-16, dated 16/03/2017 arising out of the 2 order passed U/s. 143(3) r.w.s 147 of the Income Tax Act, 1961 [the Act] for the AY 2007-08. 2. At the outset, it is noticed from the appeal record that there is a delay of 60 days in filing the appeal before the Tribunal. Explaining the reasons for belated filing of the appeal, the assessee filed an affidavit along with petition seeking for condonation of delay and the contents of the affidavit are as under: “1 ...... 2. Assessee is the Director of Agri Gold Foods and Farm Products Limited. The assessee is in judicial custody at Eluru District Jail, Eluru, West Godawari District in the Agri Gold Group Cases since April 2017 onwards and he has been moving to various courts and the accessibility for taking signatures caused the delay in filing the case. As soon as the appellant reached to Eluru District Jail, all the necessary steps for filing the appeal and the appeal could be filed on 4/12/2017. 3. As explained above, the delay of 60 days in filing the appeal was due to reasons beyond the control of the petitioner and is neither intentional nor deliberate. Therefore, it is respectfully prayed that the delay of 60 says in filing the appeal may kindly be condoned and appropriate orders may kindly be condoned and appropriate orders may kindly be passed in the interest of substantial justice. Inconvenience caused in the matter is regretted.” 3. On perusal of the contents of the affidavit filed by the assessee, we find that the assessee was prevented by a reasonable and sufficient cause in filing the appeal beyond the prescribed limit with a delay of 60 days. Therefore, we hereby condone the delay of 60 days in filing the appeal before the Tribunal and 3 proceed to adjudicate the appeal on merits in the following paragraphs. 4. Briefly stated the facts of the case are that the assessee- company, engaged in manufacturing of cattle feed and seed in agricultural division, filed its return of income for the AY 2007-08 on 26/04/2008 admitting a loss of Rs. 1,59,44,684/- and the same was processed U/s. 143(1) of the act. Subsequently, the case was selected for scrutiny and the assessment was completed U/s. 143(3) of the Act on 20/04/2009 by restricting the loss of Rs. 1,07,24,316/- after disallowing Rs. 13,90,870/- and Rs. 33,03,663/- from expenditure claimed under selling and distribution expenses and consumption of raw & packing material respectively along with disallowance of Rs. 5,25,835/- U/s. 40(a)(ia) of the Act. Subsequently, a notice U/s. 148 of the Act dated 27/03/2014 was issued after taking necessary approval from the concerned authorities and the same was duly served on the assessee. In response, the assessee vide its reply dated 11/02/2015 has submitted to treat the original return filed earlier as return filed in response to notice U/s. 148 of the Act. Subsequently, the case was converted into scrutiny and notices U/s. 143(2) and 142(1) were issued and duly served on the 4 assessee. In response thereto, the Authorized Representative of the assessee appeared from time to time and made submissions. On verification of the books of account and the other information filed before him, the Ld. AO observed that as per the P & L Account filed by the assessee, the actual income shown was Rs. 11,94,72,332/- however, in the computation of total income, the assessee has made certain adjustments to P & L Account and finally admitted a loss of Rs. 1,59,44,684/-. While doing so, the assessee worked the capital gains at Rs. 13,26,00,000/- and claimed exemption U/s. 2(14) of the Act. The Ld. AO further observed that the assessee is in the practice of purchase of lands and subsequently selling the same for making profit out of it and not for utilizing the purchased lands for agricultural purposes. Therefore, the income generated on such sale of land is to be treated as business income of the assessee as such activity is in the nature of trade and does not come under the sale of agricultural land. The Ld. AO also observed that the assessee has not produced any documentary evidence to prove that the assessee has carried out agricultural activities in the said land. Before the Ld. AO it was the contention of the assessee that the land sold was always treated as capital asset and therefore the sale proceeds of such land should not be considered as business receipts. Ld. AO did not consider the submissions of 5 the assessee. The Ld. AO considered the transactions of the assessee as business transactions and made an addition of Rs. 13,26,00,000/- and thereby determined the total income at Rs. 12,18,75,684/-. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A). On appeal, the Ld. CIT(A) dismissed the assessee’s appeal and confirmed the addition made by the Ld. AO. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal: “1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case. 2. The Ld. CIT(A) has not appreciated the fact the AO has passed the assessment order without passing the speaking order for the objections raised by the appellant company. 3. The Ld. CIT(A) has not considered the fact that in the original assessment the appellant has disclosed all the materials ie., sale of agricultural land and the computation thereof. The additions made during the original assessment will be added to the computation of income and it is evident that the AO has gone through the transactions under question. Hence the Ld. CIT(A) is erred in coming to the conclusion that there is no change of opinion. 4. The Ld. CIT(A) has not observed the fact that the appellant company has not converted the land into stock-in-trade and adopted the sale of land as business receipt. 5. The Ld. CIT(A) has not observed the fact that the deferred revenue expenditure is well within the balance sheet and this expenditure was spent before the year under consideration. 6. Any other ground that may be urged at the time of appeal hearing.” 6 5. Before us, at the time of hearing there was no representation on behalf of the assessee to represent the case. However, we proceed to adjudicate the appeal on merits based on the material available before us. 6. The Ld. DR at the outset, strongly relied on the orders of the Ld. Revenue Authorities and submitted that as observed by the Ld. AO a business transaction cannot be isolated and said to be a capital transaction just because it was recorded as such in the assessee’s books of account. The Ld. DR further submitted that the Ld. CIT(A) has discussed the issue at length and then only dismissed the appeal of the assessee and therefore pleaded that the decision of the Ld. Revenue Authorities be upheld. 7. We have heard the Ld. DR and perused the material available on record as well as carefully gone through the orders of the Ld. Revenue Authorities. On perusal of the Ld. CIT(A)’s order, we find that the Ld. CIT(A) has elaborately discussed the issue and dismissed the appeal of the assessee. Further, at the time of hearing of the appeal before us, there was no representation on behalf of the assessee to substantiate the grounds raised by the assessee in the appeal. Under these circumstances, we are of the considered view that the assessee does not have any valid 7 argument to represent the case since the issues have already been elaborately discussed in the order of the Ld. CIT(A) by quoting various judicial precedents. Therefore, we find no infirmity in the order of the Ld. CIT(A) and hence no interference is required. It is ordered accordingly. 8. In the result, appeal of the assessee is dismissed. Pronounced in the open Court on 26 th March, 2024. Sd/- Sd/- (द ु व्ि ू रु आर.एल रेड्डी) (एस बालाक ृ ष्णन) (DUVVURU RL REDDY) (S.BALAKRISHNAN) न्याययकसदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER Dated : 26.03.2024 OKK - SPS आदेश की प्रतिलिपि अग्रेपिि/Copy of the order forwarded to:- 1. निर्धाररती/ The Assessee – Agri Gold Goods and Farm Products Limited C/o. M.V. Prasad, Chartered Accountant, D.No. 60-7-13, 4 th Line, Siddhartha Nagar, Vijayawada, Andhra Pradesh 2. रधजस्व/The Revenue – The Asst. Commissioner of Income Tax, Circle- 2(1), Vijayawada, Andhra Pradesh. 3. The Principal Commissioner of Income Tax, 4. आयकर आय ु क्त (अपील)/ The Commissioner of Income Tax 5. ववभधगीय प्रनतनिधर्, आयकर अपीलीय अधर्करण, ववशधखधपटणम/ DR, ITAT, Visakhapatnam 6. गधर्ा फ़धईल / Guard file आदेशधि ु सधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam