Bhimashankar Sahakari Sakhar Karkhana Limited, Pune V. Assistant Commissioner of Income-tax, Circle - 10, Pune

ITA 206/PUN/2022

AI Insights

The case involves Bhimashankar Sahakari Sakhar Karkhana Ltd., which appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2017-18. The primary issues in the appeal were the denial of deductions under section 80P(2)(d) and disallowances related to compound wall and furniture repair maintenance expenses. The Tribunal, after considering the submissions and the material on record, agreed with the lower authorities' decisions, citing precedents and lack of sufficient evidence from the assessee to support their claims.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132820 (ITAT-PUNE)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-01-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 10-04-2022
• Other Referred Cases: Karnal Cooperative Sugar Mills Ltd., Rena Sahakari Sakhar Karkhana Ltd., Mysore Cements Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 32; 37

Judgement Text

आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.206/PUN/2022 धििाारण वर्ा / Assessment Year : 2017-18 Bhimashankar Sahakari Sakhar Karkhana Ltd., A/P. Pargaon, Tal.-Ambegaon, Distt.-Pune-412406 PAN : AAAAB0949G .......अपीलार्थी / Appellant बिाम / V/s. Assistant Commissioner of Income Tax, Circle – 10, Pune ......प्रत्यर्थी / Respondent Assessee by : N O N E Revenue by : Shri Ramnath P. Murkunde सुनवाई की तारीख / Date of Hearing : 10-01-2023 घोषणा की तारीख / Date of Pronouncement : 11-01-2023 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the assessee against the order dated 23-03-2022 passed by the National Faceless Appeal Centre (“NFAC”), Delhi for assessment year 2017-18. 2. The assessee filed Email letter dated 07-01-2023 seeking adjournment to gather/collect the some further information’s and details of 2 ITA No.206/PUN/2022, A.Y. 2017-18 the society of the case for proper representation. The ld. DR submitted that the issues raised in grounds of appeal are covered by the orders of this Tribunal and opposed the adjournment letter. On perusal of the grounds raised in Form No. 36, we find force in the submissions of ld. DR that the issues raised in the present appeal are covered by the orders of this Tribunal. Therefore, the adjournment letter filed by the assessee is rejected and we proceed to hear the appeal with the assistance of ld. DR and pass order on the examination of material available on record. 3. Ground No. 1 raised by the assessee challenging the action of CIT(A), NFAC, Delhi in restricting the deduction u/s. 80P(2)(d) of the Act. 4. We note that the assessee claimed benefit of deduction u/s. 80P(2)(a)(iii) of the Act. The AO was of the opinion that the activities carried on by the assessee are neither incidental nor ancillary to the marketing of agricultural produce of its members. Further, he observed that the assessee is into processing of sugarcane and such activity would qualify for exemption if it is carried out manufacturing without the aid of power. The AO placed reliance on the decision of Hon’ble Punjab and Haryana High Court in the case of Karnal Cooperative Sugar Mills Ltd. which held that manufactured and sold sugar which does not belong to the members, sugar had not been described as an agricultural produce in the Act and it cannot be said that the assessee was marketing agricultural produce grown by the members. The AO placed reliance on the said decision and denied deduction u/s. 80P(2)(d) of the Act to the assessee. The CIT(A) at para 4.3.2 of the impugned order, we note that by placing reliance on the orders of this Tribunal in the case of Rena Sahakari Sakhar 3 ITA No.206/PUN/2022, A.Y. 2017-18 Karkhana Ltd. in ITA No. 1249/PUN/2018 vide order dated 07-01-2022 held that the interest received by Co-operative Society from Co-operative Bank is eligible for deduction u/s. 80P(2)(d) of the Act. We find no evidence whatsoever produced by the assessee before us that the assessee is entitled to get deduction on the interest received from Co-operative Bank is eligible for deduction u/s. 80P(2)(d) of the Act. Therefore, having no evidence before us, we find no infirmity in the order of CIT(A) and it is justified. Thus, ground No. 1 raised by the assessee is dismissed. 5. Ground No. 2 raised by the assessee challenging the action of CIT(A), NFAC, Delhi in confirming the disallowance made on account of compound wall expenses. 6. We note that the AO issued show cause notice dated 19-12-2019 seeking explanation in respect of expenses relating to compound wall. The assessee did not file any reply till the date of finalization of order which is evident from para 5.3 of the assessment order. Therefore, the AO added the said amount to the total income of the assessee in the absence of any evidence. The CIT(A) discussed the said issue from pages 24 to 27 of the impugned order. We note that the assessee did not submit any reply to the satisfaction of both the authorities below that a new compound wall erected at any place of the assessee’s business premises. The CIT(A) confirmed the order of AO in the absence of any evidence. Therefore, having no evidence before us, we find no infirmity in the order of CIT(A) and it is justified. Thus, ground No. 2 raised by the assessee is dismissed. 4 ITA No.206/PUN/2022, A.Y. 2017-18 7. Ground No. 3 raised by the assessee challenging the action of CIT(A), NFAC, Delhi in confirming the addition made on account of furniture repair maintenance expenses. 8. The AO on perusal of profit and loss account found the assessee debited an amount of Rs.41,42,625/- on account of furniture repair maintenance expenses. The AO asked the assessee to provide breakup of such expenses. The assessee submitted its explanation which is reproduced by the AO in para 6.2 of the assessment order. The AO considering the submissions of the assessee held that various furniture items purchased by the assessee like chairs, door frames, conference table and false ceilings etc. are in capital assets as they provide enduring benefit. The AO disallowed u/s. 37 of the Act but however allowed depreciation u/s. 32 of the Act at the rate of 15% being Rs.6,21,394/-. The AO added balance amount of Rs.35,21,231/- (Rs.41,42,625/- - Rs.6,21,394/-). The CIT(A) discussed the said issue under Ground No. 4 from pages 27 to 29 of the impugned order, wherein, the assessee placed reliance in the case of Mysore Cements Ltd. reported in (1990) 183 ITR 367 contending that the test of enduring nature applied to the purpose for which a particular expenditure is incurred is not a conclusive test. The CIT(A) considering the facts and circumstances of the case clearly observed that no material evidence or explanation offered by the assessee against the finding given by the AO. We find no evidence in support of the claim of assessee were filed and in the absence of which we have no hesitation to confirm the order passed by the CIT(A). Therefore the order of CIT(A) in confirming the addition made by the AO on account of furniture repair 5 ITA No.206/PUN/2022, A.Y. 2017-18 maintenance expenses is justified. Thus, ground No. 3 raised by the assessee is dismissed. 9. In the result, the appeal of assessee is dismissed. Order pronounced in the open court on 11 th January, 2023. Sd/- Sd/- (Inturi Rama Rao) (S.S. Viswanethra Ravi) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिनाांक / Dated : 11 th January, 2023. रदव आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A), NFAC, Delhi. 4. The CIT concerned. 5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गार्ड फ़ाइल / Guard File. //सत्यादपत प्रदत// True Copy// आिेशानुसार / BY ORDER, वररष्ठ दनजी सदचव / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune