The DCIT, Circle-4, Ahmedabad V. Mahadev Pulses Pvt. Ltd., Ahmedabad

ITA 2400/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0696 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 04-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRASOON KALRA
• Assessee Lawyers: B K BAHETI; KHUSHBU H MER CAS
• Section: 143(3); 80IB

Judgement Text

, BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER /ITA NO.2400/AHD/2013 /ASSESSMENT YEAR :2010-11 THE DCIT, CIRCLE - 4, AHMEDABAD NAVJIVAN TRUST BLDG. OFF. ASHRAM ROAD, AHMEDABAD V/S . MAHADEV PULSES PVT. LTD., 45/2, KABUTAR KHANA, KALUPUR AHMEDABAD.380001 PAN NO. AADCM6647B /APPELLANT /RESPONDENT /BY ASSESSEE SHRI B.K. BAHETI & MS. KHUSHBU H. MER, CAS / BY REVENUE SHRI PRASOON KALRA , SR. D.R. /DATE OF HEARING 10 . 08 .201 6 /DATE OF PRONOUNCEMENT 24 . 0 8 .20 1 6 / O R D E R PER : SHRI MAHAVIR PRASAD, J M 1. THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), AHMEDABAD INTERALIA ON FOLLOWING GROUND S:- 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING DISALLOWANCE OF RS.41,05,138/- MADE BY THE ASSESSIN G OFFICER ON ACCOUNT OF DENIAL OF DEDUCTION CLAIMED 80IB(11A) FOR NOT SATISFYING THE CONDITIONS LAID DO WN, PAGE 2 WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING FINDINGS GIVEN BY THE A.O. IN THE ASSESSMENT ORDER ON THE DISALLOWANCE ON ACCOUNT OF 801B(11A) OF THE I.T. ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF GRINDING AND TRADING OF MOONG AND MOONG DAL. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IB(11A) OF THE ACT, AMOUNTING TO RS.41,15,138/-. IN THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS NOTICED THAT THE ASSE SSEE HAS CLAIMED THAT IT HAS BEEN CARRYING ON AN INTEGRATED BUSINESS OF H ANDLING, STORAGE AND TRANSPORTATION OF FOOD GRAINS, AND THEREFORE, HE WA S ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(11A) OF THE ACT. ACCOR DINGLY, CLAIMED DEDUCTION OF RS.41,05,138/- BEING 30% OF THE INCOME CLAIMED TO BE ELIGIBLE FOR DEDUCTION U/S 80IB(11 A) OF THE ACT OF GROSS TOTAL INCOME OF RS.1,36,83,793/-. THEREAFTER, NOTICE WAS SERVED TO THE APPELLANT BY THE ASSESSING OFFICER AND STATED THAT A PERUSAL OF P&L ACCOUNT INDICATES THAT THE COMPANY HAS MERELY INCURRED CERTAIN EXPENSES IN FREIGHT FACTORY EXPENSES ETC. BUT HAS NOT EARNED ANY INCOME FROM TH E BUSINESS OF STORAGE AND TRANSPORTATION IF ANY. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY DEDUCTION CLAIMED U/S 80IB OF THE A CT SHOULD NOT BE DISALLOWED AS THE COMPANY IS NOT ENGAGED IN ANY INT EGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOODGRAINS. IN REPLY OF THE SAID NOTICE, ASSESSEE SUBMITTED THAT THE ASSESSEE HAS ST ARTED NEW BUSINESS OF FOODGRAINS (MOONG DAL PULSES), IT HAS GODOWNS AN D A PROCESSING UNIT FOR MAKING DAL FROM MOONG. IT IS NOT MANUFACTURING ANY ITEM COVERED UNDER ELEVENTH SCHEDULE OF THE ACT. IT IS JUST HANDL ING AND PROCESSING THE MOONG AND IN THE HANDLING IT BREAK THE MOONG DAL THERE IS NO OTHER MANUFACTURING ACTIVITY NOR IT CONVERT THE MAIN ITEM INTO ANY OTHER PAGE 3 TRANSFORMATION. THE ASSESSING OFFICER HAS HELD THAT THE ASSESSEE COULD NOT ADDUCE ANY EVIDENCE THAT IT IS ENGAGED IN THE O THER TWO LIMBS OF BUSINESS OF TRANSPORTATION AND STORAGE WITHIN THE M EANING OF INTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOODGRAINS AS PER THE PROVISIONS OF SECTION 80IB(11A) OF THE ACT. THE ASSESSING OFFICER THEREFORE DISALLOWED OF DEDUCTION U/S 80IB(11A) OF THE ACT AND ASSESSED ITS TOTAL INCOME OF RS.1,39,95,936/-. 3. AGAINST THE SAID ASSESSMENT ORDER, ASSESSEE PREF ERRED AN APPEAL BEFORE THE CIT(A). LD. CIT(A) HAS HELD THAT THERE W AS NO DOUBT THAT THE ASSESSEE WAS INVOLVED IN HANDLING OF THE FOOD GRAIN AS IT PURCHASES RAW MOONG DAL FROM FARMERS AND TRADERS ACROSS THE COUNTRY. THE DAL PURCHASED ULTIMATELY SOLD, AFTER PROCESSING TO VARI OUS PARTIES ACROSS THE COUNTRY AS WELL IN THE LOCAL MARKET ALSO, THEREFORE , THE STIPULATION REGARDING HANDLING ALSO SATISFIED BY THE ASSESSEE. HE ALSO NOTED THAT ASSESSEE DOES NOT HAVE ITS OWN FLEET OF TRANSPORTAT ION FACILITIES AND IT USES THIRD PARTY TRANSPORTATION FACILITIES FOR PURC HASE AND SALE OF GOODS. HE FURTHER NOTED THAT THE ASSESSEE SATISFIES THE CO NDITIONS OF INTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOODGRAINS AND ACCORDINGLY ENTITLED FOR DEDUCTION U/S 80IB(11A) OF THE ACT. HE OBSERVED THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN HOLD ING THAT THE TRANSPORTATION WAS NOT OWNED BY THE ASSESSEE AND TH EREFORE, IT DOES NOT SATISFY ALL THE CONDITIONS. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE, NOT BEING AN INTEGRATED UNDERTAKING, IS NOT ENTITLED FO R THE RELIEF UNDER S. 80IB(11A)OF THE ACT. HE SUBMITTED THAT TRANSPORT AN D HANDLING ACTIVITIES CLAIMED BY THE ASSESSEE ARE MERELY INCIDENTAL AND N OT INTEGRATED TO ITS PAGE 4 MAIN ACTIVITY. LD. AUTHORIZED REPRESENTATIVE REITER ATED HIS SUBMISSIONS MADE BEFORE LOWER AUTHORITIES. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND ORD ERS OF THE AUTHORITIES BELOW. WE FIND THAT THE ASSESSEE HAS FI LED DETAILED PAPER BOOK CONTAINING AY 2005-06 ORDER U/S 143(3) OF THE ACT IN WHICH CLAIM WAS ALLOWED U/S 80IB(11A) OF THE ACT. WE FURTHER FI ND THAT AGAINST LD. CIT(A)S ORDER OF AYS 2005-06, 2006-07, 2007-08, 20 08-09 AND 2009-10 IN WHICH CIT(A) ALLOWED THE CLAIM U/S 80IB(11A) OF THE ACT, THE DEPARTMENT HAS NOT PREFERRED ANY APPEAL MEANING THE REBY THAT IT HAS ACCEPTED THE DECISION OF LD. CIT(A) IN ASSESSEE FAV OUR. IN VIEW OF AFORESAID FACTS, WE ARE OF THE OPINION THAT ASSESSE E IS ENTITLED FOR THE CLAIM ALLOWED U/S 80IB(11A) OF THE ACT AND FIND NO REASON TO INTERFERE IN THE ORDER OF LD. CIT(A). 6. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISMIS SED. THIS ORDER PRONOUNCED IN OPEN COURT ON 24.08.2016 SD/- SD/- ( ANIL CHATURVEDI) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDIC IAL MEMBER ( ) ( ) 24.8.2016 AKS PAGE 5 ! . .2016 ' # $ %& ' ! ' #$% & ()*+ ,+)- 1) ' 2) ()*+ 3) %, - 4) - -( )- 5) ./0 ( , , , , #$% 6) 01 23 & // +) () // 4 , # 56 , , , #$% & STRENGTHEN PREPARATION & DELIVERY OF ORDERS IN THE IT AT 1) DATE OF TAKING DICTATION 10.08.2016 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE DICT ON COMPUTER 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 16.08.2016 4) DATE OF CORRECTION 19.08.2016 5) DATE OF FURTHER CORRECTION 6) DATE OF INITIAL SIGN BY MEMBERS 7) ORDER UPLOADED ON 8) ORIGINAL DICTATION PAD HAS BEEN ENCLOSED IN THIS FILE 9) FINAL ORDER AND 2 ND COPY SEND TO BE NCH CLERK ON