Stewart Holl Limited, Kolkata V. D.C.I.T., Circle-4(2), Kolkata, Kolkata

ITA 2331/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1485 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 09-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Depreciation; Deemed to accrue or arise in india
• Section: 143(3); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI ABY. T. VARKEY, JM & SHRI M. BALAGANESH, AM ] I.T.A NO. 2331/KOL/20 16 ASSESSMENT YEAR : 2012-1 3 STEWART HOLL (INDIA) LIMITED -VS- DCIT, CIRCLE-4(2), KOLKATA [PAN: AAECS 3091 C] (APPELLANT) (RESPONDEN T) FOR THE APPELLANT : SHRI D.N.RAJENDRAM , AR FOR THE RESPONDENT : SHRI SALLONG YADEN, ADDL . CIT DATE OF HEARING : 13.02.2018 DATE OF PRONOUNCEMENT : 19.02.2018 ORDER PER M.BALAGANESH, AM 1. . THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-2, KOLKATA [IN SHORT THE LD CIT (A)] IN APPEAL NO.525/CIT(A)- 2/15-16 DATED 09.09.2016 AGAINST THE ORDER PASSED BY THE DCIT, CIRCLE-4(2), KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INC OME TAX ACT, 1961 (IN SHORT THE ACT) DATED 16.03.2015 FOR THE ASSESSMENT YEAR 201 2-13. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD CITA WAS JUSTIFIED IN UPHOLDING THE APPLICABILITY OF SECTION 33AB(7) O F THE ACT AGAINST THE ASSESSEE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EES MAIN BUSINESS ACTIVITY IS CULTIVATION OF TEA, MANUFACTURING OF TEA FROM LEAVES PROCURED F ROM OWN GARDEN AS WELL AS FROM BOUGHT LEAVES AND ALSO TRADING OF TEA. THE RETURN OF INCOME FOR THE ASST YEAR 2012-13 WAS ELECTRONICALLY FILED BY THE ASSESSEE COMPANY ON 27.9.2012 DECLARING INCOME OF RS 2 ITA NO.2331/KOL/2016 STEWART HOLL (INDIA) LTD. A.YR.2012-13 2 5,96,64,870/-. THE LD AO OBSERVED FROM THE TAX A UDIT REPORT OF THE ASSESSEE WHEREIN THE TAX AUDITOR HAD REPORTED THAT THERE WAS UNUTILIZED AMOUNT OUT OF WITHDRAWALS FROM NABARD DEPOSIT ACCOUNT TO THE TUNE OF RS 15,71,331/- WHICH WAS NOT UTILIZED BEFORE 31.3.2012 FOR ITS INTENDED PURP OSE. ACCORDINGLY, THE LD AO ADDED THE SAME AS DEEMED INCOME OF THE ASSESSEE U/S 33AB( 7) OF THE ACT. THE ASSESSEE SUBMITTED THAT IT HAD WITHDRAWN AN AMOUNT OF RS 2,7 8,73,174/- FROM NABARD DURING THE PREVIOUS YEAR ENDED 31.3.2012 RELEVANT TO ASST YEAR 2012-13 AS UNDER:- 22.6.2011 1,20,24,400 4.8.2011 68,82,300 22.11.2011 59,47,074 7.2.2012 30,19,400 ---------------- 2,78,73,174 THE ASSESSEE SUBMITTED THAT THE SAID AMOUNT WAS MAD E USE OF IT IN THE SAME FINANCIAL YEAR ON THE BASIS OF PLACING THE ORDERS WITHIN THE FINANCIAL YEAR AND AN AGGREGATE SUM OF RS 2,63,01,843/- WAS ALSO PAID BEFORE 31.3.2012. T HE ORDERS FOR PROCUREMENT OF VARIOUS MACHINERIES SUCH AS CONVEYOR, BOILER, DRYER MOUTH ELECTRONIC BATCH WEIGHER, TEA COLOR SORTER AND BLOWER WERE PLACED BEFORE THE END OF THE PREVIOUS YEAR AND PROFORMA INVOICE OBTAINED FROM THE CONCERNED SUPPLIERS. THE ASSESSEE ALSO STATED THAT ADVANCE AMOUNTS WERE ALSO PAID AS PER THE TERMS OF THE ORDE RS AND SINCE THERE IS ALWAYS A TIME GAP BETWEEN THE PLACING OF ORDERS AND ACTUAL DELIVE RY OF THE MACHINERIES AND ITS INSTALLATION, IT HAD SPREAD OVER THE NEXT YEAR. TH E ASSESSEE FURTHER SUBMITTED THAT THE DEFICIT FIGURE OF RS 15,71,331/- ( 27873174-2630184 3) HAD BEEN DULY SPENT BY THE ASSESSEE ON OR BEFORE THE DUE DATE OF FILING THE RE TURN OF INCOME U/S 139(1) OF THE ACT. IT FURTHER SUBMITTED THAT THE UTILIZATION HAS BEEN MADE IN ACCORDANCE WITH THE TEA DEVELOPMENT SCHEME 2007. ACCORDINGLY PLEADED THAT THE PROVISIONS OF SECTION 33AB(7) OF THE ACT USES THE EXPRESSION BEING UTILI SED AND SINCE THE UTILIZATION PROCESS HAD STARTED WELL BEFORE 31.3.2012 BY THE ASSESSEE B Y WAY OF PLACING ORDERS TO THE SUPPLIERS AND MAKING SUBSTANTIAL PAYMENTS TOWARDS A DVANCES, THE SAID PROVISIONS 3 ITA NO.2331/KOL/2016 STEWART HOLL (INDIA) LTD. A.YR.2012-13 3 MANDATING THE UTILIZATION OF THE WITHDRAWAL AMOUNTS NEED TO BE INTERPRETED LIBERALLY AND NOT STRICTLY. IT IS ALSO THE CASE OF THE ASSESSEE THAT IN CASE IF THE PROVISIONS OF SECTION 33AB(7) OF THE ACT ARE VIEWED STRICTLY, THEN THE DE DUCTION ORIGINALLY GRANTED AT THE TIME OF MAKING DEPOSIT IN NABARD IN EARLIER YEARS WOULD GET WITHDRAWN PARTIALLY EVENTHOUGH THE ASSESSEE HAD UTILIZED THE WITHDRAWN AMOUNT FROM NABARD DEPOSIT IN ACCORDANCE WITH THE TEA DEVELOPMENT SCHEME 2007. HENCE IT ARGUED THAT IT CANNOT BE THE INTENTION OF THE LEGISLATURE TO DENY THE BENEFI T OF DEDUCTION AND ACCORDINGLY THE ACTION OF THE LD AO IN TREATING THE UNUTILIZED PORT ION AS DEEMED INCOME OF THE ASSESSEE U/S 33AB(7) OF THE ACT SHOULD NOT BE SUSTAINED. THE LD CITA HOWEVER DID NOT HEED TO THESE CONTENTIONS OF THE ASSESSEE AND UPHELD THE AC TION OF THE LD AO. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GR OUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) ERRED IN LAW IN UPHOLDING THE DISALLOWANCE OF RS. 15,71,3 31/- MADE BY THE ASSESSING OFFICER UNDER SECTION 33AB(7) OF THE INCO ME TAX ACT, 1961 (THE ACT) ON THE ALLEGED GROUND OF ITS FAILED TO FILE AN Y EVIDENCE DURING THE APPELLATE PROCEEDINGS IN SPITE OF THE REFERENCE OF THE DETAILS THEREOF IN PAGE 8 OF HIS ORDER. 1.1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN PARTICULAR THE AMOUNT OF DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS THE AMOUNT SHOWN BY THE AUDITORS IN THEIR AUDIT REPORT U/S 33AB(2), THE LD. CIT(A) FAILED TO CONSIDER THE MEAN ING OF THE WORDS NOT UTILIZED WITHIN THAT PREVIOUS YEAR AND THEREB Y ERRED IN CONFIRMING RS. 15,71,331/- DISALLOWED BY THE ASSESS ING OFFICER AS THE AUDITORS TOOK THE VIEW THAT THE EXPRESSION UTILIZE D MEANS PAID. 1.2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E SECTION 33AB BEING A BENEFICIAL SECTION TO PROMOTE THE GROWTH AN D DEVELOPMENT OF TEA INDUSTRY AND IN VIEW OF THE PAYMENT OF RS. 9,86 ,370/- IN THE SUBSEQUENT YEARS OUT OF SAID AMOUNT, THE LD. CIT(A) OUGHT TO HAVE HELD THAT SECTION 33AB IS A BENEFICIAL SECTION, THE DISALLOWANCE U/S 33AB(7) SHOULD BE RESTRICTED TO RS. 6,318/- AS THE DISALLOWANCE OF RS. 15,71,331/- WAS MADE BY AN ERRONEOUS INTERPRETATION OF SECTION 33AB BY THE AUDITORS. 4 ITA NO.2331/KOL/2016 STEWART HOLL (INDIA) LTD. A.YR.2012-13 4 2. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D, CANCEL, SUPPLEMENT OR OTHERWISE MODIFY THE GROUNDS STATED ABOVE, BEFORE O R AT THE HEARING OF THE APPEAL AS IT MAY DEEM FIT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND TH AT THE ASSESSEE HAD BEEN GIVEN DEDUCTION U/S 33AB OF THE ACT IN THE EARLIER YEAR A T THE TIME OF MAKING DEPOSIT IN NABARD. THE ASSESSEE IS MANDATED TO WITHDRAW THE AMOUNTS LYING IN NABARD DEPOSIT AND UTILIZE THE SAME FOR FURTHER MANUFACTUR ING AND GROWING OF TEA IN ACCORDANCE WITH THE MANNER PROVIDED IN TEA DEVELOPMENT SCHEME, 2007. SUCH UTILIZATION IS MANDATED TO BE DONE WITHIN THE END OF THE PREVIOUS YEAR IN WHICH WITHDRAWAL WAS MADE FROM NABARD DEPOSIT IN TERMS OF SECTION 33AB(7) OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE PROVISIONS OF SECTION 33AB(7) OF T HE ACT ARE REPRODUCED :- TEA DEVELOPMENT ACCOUNT 22 [ ,COFFEE DEVELOPMENT ACCOUNT AND RUBBER DEVE-LOPMENT ACCOUNT ] . 23 33AB. (7) WHERE ANY AMOUNT, STANDING TO THE CREDIT OF THE ASSESSEE IN THE SPECIAL ACCOUNT 37 [OR IN THE 38 [***] DEPOSIT ACCOUNT], WHICH IS RELEASED DURING AN Y PREVIOUS YEAR BY THE NATIONAL BANK 37 [OR WHICH IS WITHDRAWN BY THE ASSESSEE FROM THE 38 [***] DEPOSIT ACCOUNT] FOR BEING UTILISED BY THE ASSESSEE FOR THE PURPOSES OF SUCH BUSINESS IN ACCORDANCE WITH THE SCHEME 37 [OR THE DEPOSIT SCHEME] IS NOT SO UTILISED, EITHER WHOLLY OR IN PART, WITHIN THAT PREVIOUS YEAR, THE WHOLE OF SUCH AMOUNT OR, AS THE CASE MAY BE, PART THEREOF WHICH IS NOT SO UTILISED SHALL BE DEEM ED TO BE PROFITS AND GAINS OF BUSINESS AND ACCORDINGLY CHARGEABLE TO INCOME-TAX AS THE INC OME OF THAT PREVIOUS YEAR : PROVIDED THAT THIS SUB-SECTION SHALL NOT APPLY IN A CASE WH ERE SUCH AMOUNT IS RELEASED DURING ANY PREVIOUS YEAR AT THE CLOSURE OF THE ACCO UNT IN CIRCUMSTANCES SPECIFIED IN CLAUSES (B), (C) AND (E) OF SUB-SECTION (3). 4.1. THE ASSESSEE IN THE INSTANT CASE HAD WITHDRAWN RS 2,78,73,174/- FROM NABARD DEPOSIT DURING THE PREVIOUS YEAR ENDED 31.3.2012. IT HAD UTILIZED A SUM OF RS 2,63,01,843/- BEFORE 31.3.2012 IN ACCORDANCE WITH T EA DEVELOPMENT SCHEME, 2007. IT IS NOT IN DISPUTE THAT IT HAD PLACED ORDERS FOR PRO CUREMENT OF VARIOUS MACHINERIES AND ASSETS SUCH AS CONVEYOR, BOILER, DRYER MOUTH ELECTR ONIC BATCH, WEIGHER, TEA COLOR SORTER AND BLOWER ETC BEFORE 31.3.2012 AND HAD OBTAINED P ROFORMA INVOICES FROM VARIOUS 5 ITA NO.2331/KOL/2016 STEWART HOLL (INDIA) LTD. A.YR.2012-13 5 SUPPLIERS IN TUNE WITH THE ORDERS PLACED. IT IS NO T IN DISPUTE THAT THE ASSESSEE HAD PAID SOME ADVANCES ALSO TO VARIOUS SUPPLIERS BEFORE 31.3 .2012 TOWARDS THE PURCHASE OF AFORESAID ASSETS, WHICH IS ALREADY INCLUDED IN THE UTILIZATION FIGURE OF RS 2,63,01,843/- ABOVE. IT IS NOT IN DISPUTE THAT THE UNUTILIZED PO RTION OF RS 15,71,331/- HAS BEEN UTILIZED BY THE ASSESSEE BEFORE THE DUE DATE OF FILING THE R ETURN OF INCOME U/S 139(1) OF THE ACT. THOUGH THERE IS NO RELEVANCE FOR THE DUE DATE OF FI LING THE RETURN OF INCOME U/S 139(1) OF THE ACT AS FAR AS THE UTILIZATION OF WITHDRAWN A MOUNTS ARE CONCERNED, THE SAME IS MENTIONED HERE ONLY TO DRIVE HOME THE FACT THAT THE UNUTILIZED PORTION HAS BEEN DULY UTILIZED BY THE ASSESSEE WITHIN A REASONABLE PERIOD AFTER THE END OF THE PREVIOUS YEAR. IT IS NOT IN DISPUTE THAT THE ENTIRE UTILIZATION HAS B EEN MADE IN ACCORDANCE WITH THE TEA DEVELOPMENT SCHEME, 2007. HENCE THERE IS NO DIVERS ION OF FUNDS FOR NON-BUSINESS PURPOSES OR FOR PURPOSES OTHER THAN THOSE MENTIONED IN THE TEA DEVELOPMENT SCHEME, 2007. THE REVENUE HAD TAXED THE UNUITLISED PORTIO N OF RS 15,71,331/- AS DEEMED INCOME OF THE ASSESSEE BY STRICTLY INTERPRETING THE PROVISIONS OF SECTION 33AB(7) OF THE ACT. THIS WOULD LEAD TO A SITUATION WHERE, THE ASS ESSEE HAVING BEEN GIVEN DEDUCTION IN EARLIER YEAR AT THE TIME OF MAKING DEPOSIT IN NABAR D, AND HAD WITHDRAWN THE AMOUNTS THEREON IN SUBSEQUENT YEARS FROM NABARD DEPOSIT AND UTILIZED THE SAME IN THE MANNER PROVIDED IN TEA DEVELOPMENT SCHEME, 2007 WIT H SOME DELAY (I.E UTILIZATION HAD HAPPENED PARTLY AFTER THE END OF THE PREVIOUS Y EAR IN WHICH WITHDRAWAL WAS MADE) , BUT STILL WOULD BE FASTENED WITH TAX LIABILITY BY W AY OF DEEMING FICTION PROVIDED IN SECTION 33AB(7) OF THE ACT, THEN , IT TANTAMOUNTS E FFECTIVELY TO WITHDRAWAL OF THE DEDUCTION GRANTED IN EARLIER YEARS TO THE ASSESSEE , INSPITE OF PROPER UTILIZATION OF THE FUNDS BY THE ASSESSEE. WE FIND THAT THE PROVISIO NS OF SECTION 33AB OF THE ACT WAS INTRODUCED WITH A VIEW TO ENCOURAGING PERSONS ENGAG ED IN THE BUSINESS OF GROWING AND MANUFACTURING TEA IN INDIA TO MOBILIZE RESOURCES IN TERNALLY FOR SPECIFIED PURPOSES. 4.2. WE ALSO FIND THAT SIMILAR PROVISIONS WERE MADE IN THE STATUTE U/S 32AB OF THE ACT WHICH WAS NOT APPLICABLE FROM ASST YEAR 1991-92 ONW ARDS. SUB-SECTION (6) OF SECTION 6 ITA NO.2331/KOL/2016 STEWART HOLL (INDIA) LTD. A.YR.2012-13 6 32AB OF THE ACT CONTAINED A SIMILAR PROVISION TO SE CTION 33AB(7) OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE ERSTWHILE PROVISIONS OF SE CTION 32AB(6) OF THE ACT ARE REPRODUCED BELOW:- INVESTMENT DEPOSIT ACCOUNT SECTION 32AB. . (6) WHERE ANY AMOUNT, STANDING TO THE CREDIT OF THE ASSESSEE IN THE DEPOSIT ACCOUNT, RELEASED DURING ANY PREVIOUS YEAR BY THE D EVELOPMENT BANK FOR BEING UTILIZED BY THE ASSESSEE FOR THE PURPOSES SPECIFIED IN THE SCHEME OR AT THE CLOSURE OF THE ACCOUNT [[IN CIRCUMSTANCES OTHER THAN THE CI RCUMSTANCES SPECIFIED IN CLAUSES (B), (C ) AND (E) OF SUB-SECTION (5A)]], IS NOT UTILIZED IN ACCORDANCE WITH [AND WITHIN THE TIME SPECIFIED IN,] THE SCHEME, EIT HER WHOLLY OR IN PART, [***] THE WHOLE OF SUCH AMOUNT OR, AS THE CASE MAY BE, PART T HEREOF WHICH IS NOT SO UTILIZED SHALL BE DEEMED TO BE THE PROFITS AND GAIN S OF BUSINESS OR PROFESSION OF THAT PREVIOUS YEAR AND SHALL ACCORDINGLY BE CHARGEA BLE TO INCOME-TAX AS THE INCOME OF THAT PREVIOUS YEAR. 4.2.1. THE SCOPE AND EFFECT OF THE AMENDMENTS MADE IN SECTION 32AB OF THE ACT BY THE FINANCE ACT, 1987 (11 OF 1987) , HAVE BEEN ELABORAT ED IN THE FOLLOWING PORTION OF THE DEPARTMENTAL CIRCULAR NO. 495 DATED 22.9.1987 AS UN DER:- FINANCE ACT, 1987 MODIFICATION OF PROVISIONS RELATING TO INVESTMENT D EPOSIT ACCOUNT 20.1. .. 20.2. . 20.3. 20.4. 20.5. 20.6. FINANCE ACT, 1987 20.7 SECTION 32AB(6) LAYS DOWN THE ANY AMOUNT WITHDRAWN BY AN ASSESSEE FROM HIS ACCOUNT WITH THE DEVELOPMENT BANK BUT NOT UTILISED IN ACCORDANCE WITH THE SCHEME DURING THE PREVIOUS YEAR WILL BE TREATED AS INCOME OF THE YEAR DURING WHICH THE WITHDRAWAL WAS MADE. THERE MAY BE A SITUATION WHERE AN ASSESSEE WITHDRAWS THE AMOUNT AND UTILISES THE SAME IN ACCORDANCE WITH THE SCHEME FOR SPECIFIED PURPOSES WITHIN THE PERIOD PERMITTED BY THE SCHEME BUT A PAR T OF SUCH PERIOD MAY FALL IN THE NEXT ACCOUNTING YEAR. IN SUCH CASES, THE EFFECT OF THE E XISTING PROVISIONS IS THAT THOUGH AN ASSESSEE HAS UTILISED THE AMOUNT IN ACCORDANCE WITH THE SCHEME, THE AMOUNT WILL BE 7 ITA NO.2331/KOL/2016 STEWART HOLL (INDIA) LTD. A.YR.2012-13 7 ADDED TO THE ASSESSEES INCOME IN THE YEAR IN WHICH THE WITHDRAWAL IS MADE. TO REMOVE THIS ANOMALY, THE AMENDING ACT, 1987 HAS CLARIFIED [SECTION 32AB(6)] THAT IN A CASE WHERE THE AMOUNT WITHDRAWN HAS BEEN UTILISED FOR TH E SPECIFIED PURPOSE WITHIN THE PERIOD SPECIFIED IN THE SCHEME, SUCH AMOUNT WOULD N OT FORM PART OF THE INCOME OF THE ASSESSEE IN THE PREVIOUS YEAR IN WHICH THE AMOUNT H AS BEEN WITHDRAWN. (UNDERLINING PROVIDED BY US) FINANCE ACT, 1987 20.8 THE UTILISATION OF THE AMOUNT WITHDRAWN IS PERMITT ED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 32AB AND THE SCHEME FRAMED TH EREUNDER FOR THE PURPOSE OF PURCHASING A NEW SHIP OR NEW AIRCRAFT OR NEW M ACHINERY OR PLANT. THESE EXPRESSIONS HAVE BEEN DEFINED IN THE EXPLANATION TO SECTION 32(1)(VI) OF THE INCOME-TAX ACT WHICH HAS BEEN DELETED BY THE TAXATION LAWS (AM ENDMENT AND MISCELLANEOUS PROVISIONS) ACT, 1986, WITH EFFECT FROM 1-4-1988. A S A CONSEQUENCE, THE AMENDING ACT HAS AMENDED SECTION 32AB BY INCLUDING THE DEFINITIO N OF THE EXPRESSIONS NEW SHIP, NEW AIRCRAFT AND NEW MACHINERY OR PLANT IN THE SECTION ITSELF. FINANCE ACT, 1987 20.9 THESE AMENDMENTS WILL COME INTO FORCE WITH EFFECT FROM 1ST APRIL, 1987, AND WILL, ACCORDINGLY, APPLY TO THE ASSESSMENT YEAR 1987-88 A ND SUBSEQUENT YEARS. PARA 20.7 OF THE AFORESAID CIRCULAR CLEARLY ADDRESS ES THE ISSUE UNDER DISPUTE BEFORE US. WE FIND THAT THE PROVISIONS OF SECTION 32AB (6) AND SECTION 33AB(7) ARE SIMILARLY WORDED IN BOTH LETTER AS WELL AS IN SPIRIT. IT IS NOT IN DISPUTE THAT THE ASSESSEE IN THIS CASE BEFORE US HAD UTILIZED THE WITHDRAWALS FROM DE POSIT ACCOUNT WITHIN THE SPECIFIED TIME PRESCRIBED UNDER THE SCHEME. THOUGH THE ABOV EMENTIONED CIRCULAR WAS ISSUED FOR SECTION 32AB(6) OF THE ACT, THE ANALOGY GIVEN THERE ON COULD BE USED FOR SECTION 33AB(7) OF THE ACT ALSO IN VIEW OF SIMILAR WORDS US ED IN THE STATUTE. THE PURPOSE BEHIND BOTH THE SECTIONS REMAIN THE SAME. WE ALSO FIND THAT THE LEGISLATURE HAD PROVIDED FOR ADEQUATE PRECAUTIONS IN THE SECTION 33 AB OF THE ACT ITSELF THAT IN CASE IF THE AMOUNTS LYING IN DEPOSIT ACCOUNT REMAINS UNUTIL IZED BY THE ASSESSEE FOR SPECIFIED PURPOSES AS PROVIDED IN THE TEA DEVELOPMENT SCHEME, 2007, THEN THE OUTSTANDING AMOUNTS WOULD BE BROUGHT TO TAX AS DEEMED INCOME OF THE ASSESSEE ON CLOSURE OF THE BUSINESS. NO ASSESSEE WOULD KEEP ITS FUNDS BLOCKED IN A SPECIFIED DEPOSIT ACCOUNT YIELDING LESSER INTEREST RATES AS COMPARED TO MARKE T RATES, WITHOUT USING THE SAME FOR SPECIFIED PURPOSES. THE AMOUNTS LYING IN DEPOSIT W OULD REMAIN UNUTILIZED ONLY IN THE EVENT OF ASSESSEE DECIDING TO WIND UP ITS OPERATION S. SIMILARLY IF THE NEW ASSETS 8 ITA NO.2331/KOL/2016 STEWART HOLL (INDIA) LTD. A.YR.2012-13 8 ACQUIRED OUT OF UTILIZATION OF WITHDRAWALS FROM DEP OSIT WERE SOLD WITHIN 8 YEARS OF ITS ACQUISITION, THEN THE DEDUCTION EARLIER GRANTED WOU LD BE WITHDRAWN. HENCE WE FIND THAT ADEQUATE PRECAUTIONS HAS BEEN PROVIDED IN THE STATU TE TO TAKE CARE OF VARIOUS SITUATIONS. HENCE BY GIVING THE PURPOSIVE INTERPRETATION OF THE SECTION 33AB(7) OF THE ACT AND BY LINKING THE SAME TO THE FACTS OF THE CASE BEFORE US , SINCE THE ASSESSEE HAD ACTUALLY UTILIZED THE WITHDRAWN AMOUNTS FOR INTENDED PURPOSE S WITH A SLIGHT DELAY WHICH GOT SPREAD OVER NEXT ACCOUNTING YEAR, THE ENTIRE SPIRIT OF THE REQUIREMENTS OF THE SECTION 33AB(7) OF THE ACT HAS BEEN FULFILLED BY THE ASSESS EE. 4.3. IT IS TRITE LAW THAT AN INCENTIVE PROVISION SH OULD BE CONSTRUED LIBERALLY. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO LTD VS CIT REPORTED IN 196 ITR 189 (SC) WHEREIN IT WAS HELD THAT :- A PROVISION IN A TAXING STATUTE GRANTING INCENTI VES FOR PROMOTING GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY; AND SINC E A PROVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY,THE RESTRICTION ON IT TOO HAS TO BE CONSTRUED SO AS TO ADVANCE THE OBJECTIVE OF THE PRO VISION AND NOT TO FRUSTRATE IT. 4.3.1. SIMILARLY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS GWALIOR RAYON SILK MANUFACTURING CO. LTD REPORTED IN 196 ITR 149 (SC) WHEREIN IT WAS HELD :- IT IS EQUALLY SETTLED LAW THAT IF THE LANGUAGE IS P LAIN AND UNAMBIGUOUS ONE CAN ONLY LOOK FAIRLY AT THE LANGUAGE USED AND INTERPRET IT T O GIVE EFFECT TO THE LEGISLATIVE INTENTION. NEVERTHELESS TAX LAWS HAVE TO BE INTERPR ETED REASONABLY AND IN CONSONANCE WITH JUSTICE ADOPTING PURPOSIVE APPROACH. THE CONTE XTUAL MEANING HAS TO BE ASCERTAINED AND GIVEN EFFECT TO. A PROVISION FOR DE DUCTION, EXEMPTION OR RELIEF SHOULD BE CONSTRUED REASONABLY AND IN FAVOUR OF THE ASSESSEE. THE OBJECT BEING THAT IN COMPUTATION OF THE NET INCOME, THE STATUTE PROVIDES DEDUCTIONS, EXEMPTIONS OR DEPRECIATION OF THE VALUE OF THE CAPITAL ASSETS FRO M TAXABLE INCOME. THEREFORE, BUILDING WHICH HAVE NOT BEEN SPECIFICALLY DEFINED TO INCLUDE ROAD IN THE ACT MUST BE TAKEN IN THE LEGAL SENSE. 9 ITA NO.2331/KOL/2016 STEWART HOLL (INDIA) LTD. A.YR.2012-13 9 4.3.2. THE HONBLE SUPREME COURT IN THE CASE OF CIT V. J.H. GOTLA REPORTED IN 156 ITR 323 (SC) HAD HELD :- 'IF THE PURPOSE OF A PARTICULAR PROVISION IS EASILY DISCERNIBLE FROM THE WHOLE OF THE SCHEME OF THE ACT WHICH IN THIS CASE, IS TO COUNTERACT THE EFFECT OF TRANSFER OF ASSETS SO FAR AS COMPUTATION OF INCOME OF THE ASSESSEE IS CONCERNED, THEN BEARING THAT PURPOSE IN MIND, WE SHOULD FIND OUT THE INTENTION FROM THE LANGUAGE USED BY THE LEGISLATURE AND IF STRICT LITERAL CONSTRUCTION LEADS TO AN ABSURD RESULT, I.E ., RESULT NOT INTENDED TO BE SUBSERVED BY THE OBJECT OF THE LEGISLATION FOUND IN THE MANNER I NDICATED BEFORE, THEN ANOTHER CONSTRUCTION IS POSSIBLE APART FROM STRICT LITERAL CONSTRUCTION THEN THAT CONSTRUCTION SHOULD BE PREFERRED TO THE STRICT LITERAL CONSTRUCTION.' 4.3.3. WE HOLD THAT A PROVISION FOR DEDUCTION, EXE MPTION OR RELIEF SHOULD BE CONSTRUED REASONABLY AND IN FAVOUR OF THE ASSESSEE. WE ALSO HOLD THAT THOUGH EQUITY AND TAXATION ARE OFTEN STRANGERS , ATTEMPTS SHOULD BE MADE THAT THESE DO NOT REMAIN ALWAYS SO AND IF A CONSTRUCTION RESULTS IN EQUITY RATHER THAN IN INJ USTICE, THEN SUCH CONSTRUCTION SHOULD BE PREFERRED TO THE LITERAL CONSTRUCTION. IT IS ONLY E LEMENTARY THAT A STATUTORY PROVISION IS TO BE INTERPRETED UT RES MAGIS VALEAT QUAM PEREAT, I.E TO MAKE IT WORKABLE RATHER THAN REDUNDANT. APPLYING THIS LEGAL MAXIM, IT WOULD BE J UST AND FAIR TO HOLD THAT THE ASSESSEE, HAVING UTILIZED THE AMOUNTS WITHDRAWN FR OM NABARD DEPOSIT FOR ITS INTENDED PURPOSES WITHIN THE TIME SPECIFIED UNDER T HE RESPECTIVE SCHEME, SHOULD NOT BE FASTENED WITH TAX LIABILITY ON DEEMED INCOME BASIS, MERELY BECAUSE IT HAD NOT UTILIZED THE ENTIRE AMOUNTS WITHDRAWN BEFORE 31.3.2012 (I.E WITHIN THAT PREVIOUS YEAR). WE FURTHER HOLD THAT IN CASE IF THE ASSESSEE IS TAXED ON DEEMED INCOME BASIS IN THIS YEAR FOR NON-UTILISATION OF WITHDRAWALS WITHIN THAT PREVIOUS YEAR, THEN THE ASSESSEE WOULD NEVER GET ANY DEDUCTION IN SUBSEQUENT YEARS ALSO FOR THIS UTILIZATION. THIS WOULD IN EFFECT RESULT IN WITHDRAWAL OF DEDUCTION IN PART EARLIER G RANTED TO THE ASSESSEE AT THE TIME OF MAKING DEPOSIT WITH NABARD. 10 ITA NO.2331/KOL/2016 STEWART HOLL (INDIA) LTD. A.YR.2012-13 10 4.4. THE PROVISIONS OF SECTION 33AB (7) OF THE ACT USES THE EXPRESSION BEING UTILISED. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD PLACED O RDERS FOR ACQUISITION OF VARIOUS MACHINERIES THAT ARE REQUIRED FOR SETTING UP OF NEW UNITS TO BE ENGAGED IN GROWING AND MANUFACTURING OF TEA I.E ACQUISITION FOR MACHINERIE S FOR SPECIFIED PURPOSES. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD PAID SUBSTANTIAL PORT ION OF THE PROFORMA INVOICE VALUE AS ADVANCE BEFORE 31.3.2012 AND HAD INCLUDED THE SAME IN THE UTILIZATION STATEMENT BEFORE 31.3.2012 WHICH CLEARLY INDICATES ITS INTENTION OF UTILIZING THE WITHDRAWALS FROM NABARD DEPOSIT ACCOUNTS. HENCE THE SPIRIT OF THE SECTION HAD BEEN SATISFIED BY THE ASSESSEE. 4.5. IN VIEW OF THE AFORESAID FINDINGS IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IN VIEW OF THE RELIANCE PLACED ON THE CBDT CIRCULAR NO. 495 DATED 22.9.87 EXPLAINING THE SCOPE AND EFFECT OF SECTION 32AB(6) OF THE ACT WHIC H IS PARI MATERIA WITH SECTION 33AB(7) OF THE ACT AND IN VIEW OF THE JUDICIAL PREC EDENTS RELIED UPON HEREINABOVE FOR INTERPRETATION OF STATUTES, WE HOLD THAT THE ACTION OF THE REVENUE IN BRINGING TO TAX THE DEEMED INCOME IN TERMS OF SECTION 33AB(7) OF THE AC T DESERVES TO BE DELETED. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 19.02.2018 SD/- SD/- [A.T. VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19.02.2018 SB, SR. PS 11 ITA NO.2331/KOL/2016 STEWART HOLL (INDIA) LTD. A.YR.2012-13 11 COPY OF THE ORDER FORWARDED TO: 1. STEWARD HOLL (INDIA) LTD. CAMELLIA HOUSE, 14, GU RUSADAY ROAD, KOLKATA-700019. 2. DCIT, CIRCLE-4(2), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA- 700069. 3. C.I.T(A)- , KOLKATA 4. C.I.T.- K OLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S