Appeal details
Counselvise Citation
[2011] 140 COUNSELVISE.COM (IT) 48088 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-05-2011
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
C
Assessment Year
2006-2007
Appeal Filed On
04-11-2010
Judgement Text
, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () , , , !' ) [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE SHR I AKBER BASHA, AM] # # # # / I.T.A NO. 2009/KOL/2010 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR: 2006-07 DEPUTY COMMISSIONER OF INCOME-TAX -VS- M/S. THE C HAMONG TEA CO. LTD. CIRCLE-4, KOLKATA. (PAN-AAACT 9153 C) ()* /APPELLANT ) (+,)*/ RESPONDENT ) FOR THE APPELLANT: SHRI B. R. PUROKAYASTHA FOR THE RESPONDENT: SHRI R. SALARPURIA ! / ORDER PER SHRI MAHAVIR SINGH/ : THIS APPEAL BY REVENUE IS ARISING OUT OF THE ORDER OF CIT(A)-IV, KOLKATA IN APPEAL NO. 130/CIT(A)-IV/08-09 DATED 22.12.2009. THE ASSESSMEN T WAS FRAMED BY ACIT, CIRCLE-4, KOLKATA, U/S. 143(3) OF THE INCOME TAX ACT, 1961 (H EREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006-07 VIDE HIS ORDER DATED 22.12. 2008. 2. AT THE TIME OF HEARING, LD. SR. DR SRI B. R. PUR OKAYASTHA PRAYED FOR ADJOURNMENT STATING THE REASON THAT SHRI ASHOK KUMAR, SR. DR WA S ASSIGNED TO APPEAR BEFORE THE HONBLE MEMBERS ON THIS DAY. HOWEVER, SHRI ASHOK KUMAR HAS BEEN TRANSFERRED OUT OF WEST BENGAL TO GUWAHATI AND HE HAS EXPRESSED HIS INABILITY TO APPE AR. DUE TO SHORTAGE OF SR. DRS DEPARTMENT IS UNABLE TO FIND SUBSTITUTE TO APPEAR BEFORE THE H ONBLE MEMBERS TO REPRESENT THIS CASE AND HE URGED BEFORE THE BENCH THAT A SUITABLE ADJOURNMENT MAY KINDLY BE GRANTED. IN VIEW OF REASONS STATED IN THE ADJOURNMENT PETITI ON, WE ARE OF THE VIEW THAT TRANSFER OF A DR IS NO REASONABLE CAUSE FOR ADJOURNMENT. HENCE , WE REJECT THE ADJOURNMENT PETITION AND DECIDE THE ISSUE. 3. AT THE OUTSET, IT IS NOTICED THAT THE APPEAL FIL ED BY THE REVENUE IS DELAYED BY 23 DAYS AND THE CAUSE STATED IN AFFIDAVIT FOR CONDONATION OF DE LAY SEEMS REASONABLE IN VIEW OF THE REASONS 2 ITA 2009/K/201 0 THE CHAMONG TEA CO. LTD. A.Y. 06-07 GIVEN THEREIN AND AS CONCEDED BY THE LD. COUNSEL FO R THE ASSESSEE. ACCORDINGLY, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 4. NOW COMING TO THE SOLE ISSUE OF THE REVENUE, WHI CH IS AGAINST THE ORDER OF CIT(A) DELETING THE ADDITION MADE ON ACCOUNT OF CESS ON GR EEN LEAF, WHICH IS A COVERED ISSUE BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF AF T INDUSTRIES LTD. VS. CIT (2004) 270 ITR 167. FOR THIS, THE GROUND RAISED BY THE REVENUE RE ADS AS UNDER: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A), KOLKATA HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.12,93,835/- ON ACCOUNT OF CESS ON GREEN LEAF WITHOUT CONSIDERING THE FACT THAT EXPENSES ON ACCOU NT OF CESS ON GREEN LEAF IS RELATED TO 100% AGRICULTURAL OPERATION AND SLP IS P ENDING BEFORE THE HONBLE SUPREME COURT AGAINST THE DECISION OF CALCUTTA HIGH COURT IN THE CASE OF AFT INDUSTRIES LTD. VS. CIT 270 ITR 167 IN THE LIGHT OF WHICH LD. CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 5. WE FIND THAT THE ISSUE IS SQUARELY COVERED BY TH E DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF AFT INDUSTRIES LTD. (SUPRA), WHEREIN HONBLE HIGH COURT HAS HELD AS UNDER: HAVING REGARD TO THE PROVISIONS CONTAINED IN RULE 8 WITH WHICH WE HAD OCCASION TO DEAL IN UNION OF INDIA V. WARREN TEA LTD. [2004) 266 ITR 226 (CAL), A.P.O. NO.792 OF 1999, DISPOSED OF BY US ON JANUARY 15, 2004, IT APPEARS T HAT IN RESPECT OF COMPUTATION OF INCOME OF TEA GROWN AND MANUFACTURED, A FICTION HAS BEEN CREATED UNDER WHICH BOTH THE AGRICULTURAL COMPONENT AND THE BUSINESS COMPONENT O F THE INCOME WOULD BE ASSESSED TOGETHER FOR THE PURPOSE OF COMPUTING THE INCOME UN DER THE ACT AND ONLY AFTER THE COMPUTATION OF THE TOTAL INCOME, THE APPORTIONMENT IS TO BE MADE DETERMINING 60 PER CENT, AS AGRICULTURAL INCOME AND 40 PER CENT. AS EX IGIBLE TO TAX UNDER THE ACT. DURING THE PROCESS OF THE COMPUTATION, ALL DEDUCTIONS ALLOWABL E AT THE TIME OF COMPUTATION ARE TO BE ALLOWED AND THAT WAS RIGHTLY ALLOWED. INASMUCH AS I F THE INCOME FOR TEA GROWN WAS ASSESSED UNDER THE AGRICULTURAL INCOME-TAX, IN THAT EVENT, THE SAME CESS PAID OF GREEN LEAF WOULD HAVE BEEN ELIGIBLE FOR DEDUCTION AT THE TIME OF COMPUTATION OF THE AGRICULTURAL INCOME. BUT WHEN BY FICTION IN RESPECT OF TEA GROWN AND MANUFACTURED, THE AGRICULTURAL COMPONENT OF THE INCOME OUT OF THE TEA GROWN IS ALS O COMPUTED UNDER THE INCOME-TAX ACT ALONG WITH THE INCOME OUT OF THE TEA MANUFACTURED F ROM THE TEA GROWN. WHEN BY FICTION THE INCOME AS COMPUTED AS AN INCOME UNDER THE ACT, ALL DEDUCTIONS AS ARE AVAILABLE BOTH FOR THE AGRICULTURAL COMPONENT AND FOR THE BUSINESS COMPONENT OF THE INCOME ARE TO BE ALLOWED AS A NATURAL COROLLARY TO THE FICTION SO CR EATED. SUCH DEDUCTIONS, WHICH ARE ALLOWED IN ORDER TO ARRIVE AT THE TOTAL INCOME EXIG IBLE TO TAX, ARE TO BE ALLOWED AND THE APPORTIONMENT OF THE TOTAL INCOME SO COMPUTED IS TO BE MADE. IF THE AGRICULTURAL PART OF THE DEDUCTIONS IS MADE APPLICATION FOR DEDUCTION FR OM THE 60 PER CENT OF THE TOTAL INCOME SO COMPUTED, IN THAT EVENT, THIS 60 PER CENT WOULD BE AGAIN MADE ASSESSABLE UNDER THE AGRICULTURAL INCOME-TAX ACT WHICH IS NOT PERMISSIBL E. IN THAT EVENT, THE PURPOSE OF CREATING FICTION WOULD STAND FRUSTRATED. IT WOULD T HEN BE A CONCEPT COMPLETELY FOREIGN TO THE FICTION SO CREATED. THEREFORE, THE ENTIRE AMOUN T PAID AS CESS ON GREEN LEAF SEEMS TO BE ELIGIBLE FOR DEDUCTION WITH REGARD TO WHICH WE DO N OT FIND ANY CONFUSION. 3 ITA 2009/K/201 0 THE CHAMONG TEA CO. LTD. A.Y. 06-07 FOR THE AFORESAID REASONS, WE DO NOT FIND ANY SUBS TANTIAL QUESTION OF LAW INVOLVED IN THIS CASE. THE PETITION IS, THEREFORE, DISMISSED. RESPECTFULLY FOLLOWING THE HONBLE JURISDICTIONAL H IGH COURT DECISION, AS THE ISSUE IS EXACTLY SAME ON FACTS, WE UPHOLD THE ORDER OF CIT(A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 7. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- , !' , (AKBER BASHA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( -' -' -' -') )) ) DATED 4 TH MAY 2011 ./ $01 2 JD.(SR.P.S.) ! 3 +4 5!4&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT DCIT, CIRCLE-4, KOLKATA. 2 +,)* / RESPONDENT M/S. THE CHAMONG TEA CO. LTD., 12, G OVT. PLACE (EAST), KOLKATA-69.. 3 . $ ( )/ THE CIT(A), KOLKATA 4. 5. $ / CIT KOLKATA 4<= +$ / DR, KOLKATA BENCHES, KOLKATA ,4 +/ TRUE COPY, ! $>/ BY ORDER, 1 /ASSTT. REGISTRAR .
