Smt. SUDHA DEVI OSTWAL, Ratlam V. The JCIT, Ratlam

ITA 212/IND/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99101 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 14-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: S S DESHPANDE
• Keywords: Depreciation

Judgement Text

SMT. SUDHA DEVI OSWAL ITA NO. 212/IND/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER ITA NO.212/IND/2014 A.Y. 2010-11 SMT. SUDHA DEVI OSWAL RATLAM PAN AAAPO 8583A ::: APPELLANT VS JT. COMMR. OF INCOME TAX RATLAM ::: RESPONDENT APPELLANT BY SHRI S.S. DESHPANDE RESPONDENT BY SHRI R.A. VERMA DATE OF HEARING 24.9.2015 DATE OF PRONOUNCEMENT 1 6 . 1 1 .2015 O R D E R PER SHRI B.C. MEENA, AM THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LEARNED CIT(A), UJJAIN, DATED 31.12.2 013. SMT. SUDHA DEVI OSWAL ITA NO. 212/IND/2014 2 2. THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM WAREHOUSING BUSINESS IN THE NAME AND STYLE OF ARIHANT AGRICULTURE INFRASTRUCTURE. THE RETURN OF INCOME WAS FILED DECLARING INCOME AT RS.1331,910/- AFTER CLAIMING DEDUCTION U/S 80IB(11A) OF THE ACT AT RS.38,59,664/- . THE ASSESSEE SUBMITTED A CERTIFICATE IN FORM NO.10CCB WHI CH DID NOT CONTAIN PLACE AND THE DATE OF SIGNING WHICH WAS CLARIFIED BY THE CA. THE ASSESSING OFFICER DISALLOWE D THE CLAIM OF DEDUCTION UNDER SECTION 80IB(11A) OF THE IN COME TAX ACT, 1961; DEPRECIATION ON BUILDING AND CASH DISCOUNTS. THESE ADDITIONS WERE CONFIRMED BY THE LEA RNED CIT(A). 3. IN GROUND NOS. 1 TO 4 THE ISSUE INVOLVED IS REGAR DING NOT ALLOWING DEDUCTION CLAIMED UNDER SECTION 80IB(11A ) OF THE INCOME TAX ACT, 1961 FOR THE REASON THAT THE ASSES SEE HAS NOT FULFILLED THE CONDITIONS AS PRESCRIBED IN THE ACT. SMT. SUDHA DEVI OSWAL ITA NO. 212/IND/2014 3 THE LEARNED CIT(A) HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER. NOW THE ASSESSEE IS IN APPEAL BEFOR E US. 4. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS DENIED THE BENEFIT OF DEDUCTION OF SECTION 80IB(11A) FOR THE REASON THAT T HE ASSESSEE HAS NOT DEVELOPED TRANSPORTATION FACILITIES. TH E LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE INTENTION OF THE INTRODUCTION OF THIS PROVISION WAS TO ENHANCE THE FOOD SECURITY AND STORAGE FACILITIES. ALTHO UGH THE WORD USED IN SECTION 80IB(11A) IS INTEGRATED BU SINESS OF HANDLING STORAGE AND TRANSPORT OF FOODGRAINS BUT THE EXPLANATORY NOTE ISSUED BY CBDT VIDE CIRCULAR NO. 14/2001 CLEARLY MENTIONS THAT SECTION HAS BEEN INTRODU CED FOR ENHANCEMENT OF FOOD SECURITY AND AGRICULTURE DEVELOPMENT. THE MAIN PURPOSE IS THE STORAGE FACILITIE S. HANDLING IS CONNECTED WITH THE STORAGE FACILITIES AND W OULD FORM THE PART AND PARCEL OF STORAGE FACILITIES. THE SMT. SUDHA DEVI OSWAL ITA NO. 212/IND/2014 4 TRANSPORTATION IS ALSO UNDERTAKEN IN THIS ACTIVITY WHIC H CAN BE TAKEN BY BULLOCK CARTS AND THELAS. THE ASSESSEE NEED NOT OWN ITS OWN TRANSPORT FACILITIES BUT CAN BE TAKEN O N HIRE WHICH IS NORMALLY DONE IN THIS TYPE OF BUSINESS . THE ASSESSEE HAS PROVIDED SUCH FACILITIES ON HIRE BY BULLO CK CARTS AND THELAS. THEREFORE, THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IB(11A) OF THE ACT. THE LEARNED COU NSEL FOR THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION O F ITAT IN THE CASE OF YESHWANT SINGH ARORA VS. ITO; ITA NO. 339/IND/2013 WHEREIN SUCH CLAIM HAS BEEN CLAIM ALLOWED. HE ALSO PLACED RELIANCE ON THE DECISION IN THE CASE OF T. DEVENDRA REDDY VS. ITO IN ITA NO. 57/HYD/2011 DATED OF THE HYDERABAD BENCH OF THE TRIBUNAL. 5. THE LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THI S PROVISION WAS INTRODUCED TO ENHANCE THE STORAGE CAPACIT Y AND TO ENHANCE THE FOOD SECURITY AND DEVELOPMENT OF SMT. SUDHA DEVI OSWAL ITA NO. 212/IND/2014 5 AGRICULTURE BUT DEDUCTION UNDER THIS SECTION CAN BE G IVEN ONLY TO THE PERSONS WHO HAVE DEVELOPED INTEGRATED BUSINESS OF WAREHOUSING FACILITIES. SIMPLY DEVELOPING THE WAREHOUSING SHALL NOT MAKE THE ASSESSEE ENTITLED TO TH E CLAIM AS THE WORD USED IS INTEGRATED BUSINESS OF WAREHOUSING FACILITIES. HE ALSO RELIED UPON THE ORD ERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH THE SIDES. THE DEDUCTION U/S 80IB(11A) IS AVAILABLE TO UNDERTAKINGS WHO ARE DERIVIN G PROFIT FROM THE INTEGRATED BUSINESS OF HANDLING, STOR AGE AND TRANSPORTATION OF FOODGRAINS. THUS, THE FACILITIES OF TRANSPORTATION, HANDLING AND TRANSPORTATION MUST EXIST AS AN INTEGRATED BUSINESS AND THE UNDERTAKING MUST DERIVE PROFIT FROM SUCH BUSINESS. TRANSPORTATION BY HIRING L ORRY OR THELA WILL NOT GENERATE PROFIT. THE BENEFIT MUST BE F ROM INTEGRATED BUSINESS INCLUDING TRANSPORTATION. THE ASSESSEES CLAIM THAT HIRING RIKSHA WILL SUFFICE THE SMT. SUDHA DEVI OSWAL ITA NO. 212/IND/2014 6 CONDITIONS OF INTEGRATED BUSINESS OF TRANSPORTATION WI TH HANDLING AND STORAGE SHALL NOT BE SUFFICIENT. RATHER IT WILL GO AGAINST THE VERY SPIRIT OF THE ACT. IN OUR CONSIDE RED VIEW, THIS DEDUCTION IS AVAILABLE ONLY ON THE PROFIT DERIVE D FROM THE INTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOODGRAINS. THEREFORE, WE FIND NO ME RIT IN THE PLEADING OF THE ASSESSEE AND SUSTAIN THE ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY, THIS GROUND OF THE AS SESSEE IS DISMISSED. 7. GROUND NOS. 5 AND 6 RELATE TO NOT ALLOWING DEPRECIATION ON THE BUILDING AND WAREHOUSE. THE ASSESS EE DID NOT CLAIM DEPRECIATION ON THE BUILDING. HOWEVER, THIS CLAIM WAS LODGED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THE ASSE SSING OFFICER STATES THAT THE ASSESSEE HAS FAILED TO PROVE THE EXISTENCE OF THE BUSINESS DURING THE RELEVANT PERIOD . THE SMT. SUDHA DEVI OSWAL ITA NO. 212/IND/2014 7 LEARNED CIT(A) CONFIRMED THIS ACTION OF THE ASSESSING OFFICER. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE U S. 8. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED DETAILS OF RECEIPTS AND STORAGE OF VARIOUS I TEMS. HE SUBMITTED THAT THE ASSESSING OFFICER HAS COMPLETEL Y LOST SITE OF THE FACT THAT THE ASSESSEE IS PROVIDING STORI NG FACILITIES TO FCI AND KARGIL INDIA PRIVATE LIMITED. THES E PERSONS HAVE ALSO DEDUCTED TAX FROM THE RENT. THE AUD ITED BALANCE SHEET ALSO SHOWS THAT THE WAREHOUSING BUILDING ADDITION HAS BEEN MADE AT RS.1,78,62,323/- WHICH CLEARL Y PROVES THAT THE BUILDING WAS IN EXISTENCE AND IT ALSO C ANNOT BE DENIED THAT THE WAREHOUSING ACTIVITIES WERE CARRIED ON. IN VIEW OF THIS FACT, THE ASSESSEE IS ENTITLED TO DEP RECIATION. 9. WE HAVE HEARD BOTH THE SIDES. THE ASSESSEE CLAIMS THAT THE AUDITED BALANCE SHEET OF THE ASSESSEE SHOWS TH E ADDITION OF WAREHOUSING BUILDING TO ITS ASSETS AT RS.1,78,62,323/- AND ALSO SHOWS RENTAL INCOME FROM FCI SMT. SUDHA DEVI OSWAL ITA NO. 212/IND/2014 8 AND CARGIL INDIA PRIVATE LIMITED AND THE TAX HAS BEEN DEDUCTED FROM THE RENT, THEREFORE, IN OUR VIEW, THE ASSESSEE IS ENTITLED TO DEPRECIATION ON WAREHOUSING. WE DIRECT ACCORDINGLY. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED. PRONOUNCED IN OPEN COURT ON 16 TH NOVEMBER, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 16 TH NOVEMBER, 2015 DN/-