Joint Commissioner of Income-tax, V. Pranav Agro Industries Ltd., Pune

ITA 2428/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3702 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-01-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 14-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV GHEI
• Keywords: Depreciation
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO , AM . / ITA NO. 2428 /P U N/201 6 / ASSESSMENT YEAR : 20 1 2 - 1 3 THE JT. COMMISSIONER OF INCOME TAX, RANGE 4, PUNE . / APPELLANT VS. PRANAV AGRO INDUSTRIES LTD., 5 TH FLOOR, NAV MAHARASHTRA HOUSE, 43, SHANIWAR PETH, PUNE 4110 30 . / RESPONDENT PAN: AABCP8009Q / APPELLANT BY : SHRI SANJEEV GHEI / RESPONDENT BY : NONE / DATE OF HEARING : 2 1 . 0 1 .201 9 / DATE OF PRONOUNCEMENT: 21 . 0 2 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY REVENUE IS AGAINST ORDER OF CIT (A) - 3 , PUNE , DATED 0 1 . 07 .20 1 6 RELATING TO ASSESSMENT YEAR 20 1 2 - 1 3 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 2428 /P U N/20 1 6 PRANAV AGRO INDUSTRIES LTD. 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED I N ALLOWING THE DEDUCTION U/S 80JJA OF THE ACT WITHOUT APPRECIATING THAT BAGGASE / HUNK IS NOT A WASTE BUT IS A BY - PRODU CT OF AGRI - PRODUCE PROCESSING INDUSTRY WHICH WAS PURCHASED AND NOT COLLECTED & PROCESSED OR TREATED BY THE ASSESSEE, WHICH IS A PRE - REQUISITE FOR CLAIMING DEDUCTION U/S 80JJA O F THE ACT. 2 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE C I T(A) HAS ERRED IN ALLOWING THE ASSESSCE'S CLAIM OF DEPRECIATION ON WINDMILLS WHEN THE ASSESSED WAS NOT A REGISTERED OWNER OF THE WINDMILLS AND IT WAS PURCHASING ELECTRICITY FROM NAV MAHARASHTRA CHAKAN OIL MILLS LTD (NMCOML) THUS HAVING NO TITLE/DOMINION AND RIGHT TO USE THE ASSET. 3 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN FAILING TO APPRECIATE THE SO CALLED PURCHASE OF WINDMILLS BY THE ASSESSEE FROM ITS SISTER CONCERN NMCOML, A LOSS MAKING COMPANY WAS SHOWN TRANSACTION CARRIED OUT IN ORDER TO MERELY AVAIL THE BENEFIT OF DEPRECIATION. 4 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION DUE TO DISALLOWANCE ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND (PF), EMPLOYEES STATE INSURANCE CORPORATION (ESIC) AND MAHARASHTRA LABOUR WELFARE FUND AND IGNORING THE FACT THA T EMPLOYEE'S CONTRIBUTION TO SUCH WELFARE FUNDS IS GOVERNED BY THE PROVISIONS O F SECTION 36( 1 )(VA) OF THE IT ACT AS CLARIFIED BY BOARD'S CIRCULAR NO. 22 O F 2015 DATED 17.12.2015 AND HENCE THE SAME HAS BEEN RIGHTLY DISALLOWED B Y THE AO. 5 . THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A), TO THE EXTENT OF THE ABOVE ISSUE, BE HELD TO BE BAD IN LAW AND QUASHED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. DESPITE SERVICE NONE APPEARE D ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION WAS MOVED FOR ADJOURNMENT. HOWEVER, WE PROCEED TO DISPOSE OF THE APPEAL FILED BY REVENUE AFTER HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE, WHO FAIRLY POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT STANDS COVERED BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE IN EARLIER YEARS. 4. NOW, WE PROCEED TO TAKE UP THE ISSUES GROUND - WISE. THE FIRST ISSUE RAISED BY THE REVENUE IS AGAINST ORDER OF CIT(A) IN ALLOWING DEDUCTION UNDER SECTION 80J JA OF THE ACT ON BAGGASE / HUNK. ITA NO. 2428 /P U N/20 1 6 PRANAV AGRO INDUSTRIES LTD. 3 5. BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF PRODUCING ANIMAL FEED, FEED SUPPLEMENT, EDIBLE OILS, FUEL PELLETS AND WIND POWER GENERATION. THE ASSESSEE FOR THE YEAR UNDER CONSIDER ATION AS IN THE EARLIER YEARS HAD CLAIMED DEDUCTION UNDER SECTION 80JJA OF THE ACT ON PROFITS AND GAINS FROM THE BUSINESS OF BIO DEGRADABLE WASTE. FURTHER, THE ASSESSEE HAD PURCHASED WINDMILL FROM M/S. NAV MAHARASHTRA CHAKAN OIL MILLS LIMITED (NMCOML). I N THE FINANCIAL YEAR 2007 - 08 THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IA(4) OF THE ACT. THE ASSESSING OFFICER REJECTED BOTH THE CLAIMS MADE BY THE ASSESSEE AND ALSO MADE DISALLOWANCE IN RESPECT OF PAYMENTS MADE BY ASSESSEE TOWARDS EMPLOYEES CONTRIB UTION TO PROVIDENT FUND AND ESIC AFTER DUE DATE SPECIFIED UNDER THE RESPECTIVE ACTS AND CERTAIN OTHER EXPENSES. 6. THE CIT(A) ALLOWED THE CLAIMS OF ASSESSEE IN TURN, RELYING ON SIMILAR ISSUE BEING DECIDED BY THE CIT(A) IN ASSESSMENT YEAR 2011 - 12. THE Y EAR UNDER APPEAL IS ASSESSMENT YEAR 2012 - 13. 7. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 8. WE FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEARS 2008 - 09 AND 2009 - 10 HAS DECIDED SIMILAR ISSUE. THE FIRST ISSUE DECIDED BY THE T RIBUNAL VIDE PARA 11 IS WITH REGARD TO THE CLAIM OF DEDUCTION UNDER SECTION 80JJA OF THE ACT, WHICH WAS ALLOWED BY THE CIT(A). THE TRIBUNAL IN TURN, RELYING ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. SMT. PADMA S. BORA REPORTED IN 29 TAXMANN.COM 230 (BOM) HAD HELD THE ASSESSEE TO BE ELIGIBLE TO CLAIM THE DEDUCTION UNDER SECTION 80JJA OF THE ACT. ITA NO. 2428 /P U N/20 1 6 PRANAV AGRO INDUSTRIES LTD. 4 IN THIS REGARD, WE REFER TO THE FINDINGS OF TRIBUNAL IN PARAS 11 TO 13 OF THE ORDER IN ITA NO.714/PN/2012, WHICH IS LEAD CASE FOR ASSESSME NT YEAR 2008 - 09, DATED 09.05.2016 . APPLYING THE SAID RATIO, WE UPHOLD THE ORDER OF CIT(A) IN THIS REGARD AND DISMISS THE GROUND OF APPEAL NO.1 RAISED BY REVENUE. 9. NOW, COMING TO THE SECOND ISSUE WHICH IS RAISED VIDE GROUNDS OF APPEAL NO.2 AND 3 I.E. CL AIM OF DEPRECIATION ON WINDMILL. 10. THE TRIBUNAL HAD ALSO ADJUDICATED THE AFORESAID ISSUE OF DEPRECIATION ON WINDMILL VIDE PARA 14 OF THE ORDER (SUPRA) AND HAS HELD THE ASSESSEE TO BE ENTITLED TO CLAIM THE AFORESAID DEPRECIATION. FOLLOWING THE SAME PA RITY OF REASONING, WE UPHOLD THE ORDER OF CIT(A) IN THIS REGARD AND DISMISS THE GROUNDS OF APPEAL NO.2 AND 3 RAISED BY THE REVENUE. 11. THE LAST ISSUE WHICH IS RAISED VIDE GROUND OF APPEAL NO.4 I.E. AGAINST THE ORDER OF CIT(A) IN DELETING DISALLOWANCE MAD E ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND , ESIC AND MAHARASHTRA LABOUR WELFARE FUND. 12. THE TRIBUNAL HAD ALSO DECIDED SIMILAR ISSUE VIDE PARA 15 OF THE ORDER (SUPRA) AND HAD RELIED ON THE RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN CIT VS. GHATGE PATIL TRANSPORT LTD. , REPORTED IN 368 ITR 749 (BOM) TO HOLD THAT IN CASE THE PAYMENTS WERE MADE BEFORE DUE DATE OF FILING THE RETURN OF INCOME, THEN NO DISALLOWANCE IS TO BE MADE UNDER SECTION 43B OF THE ACT. FOLLOWING THE SAME PARITY OF R EASONING, SINCE THE ASSESSEE HAS MADE PAYMENTS BEFORE DUE DATE OF FILING THE RETURN OF INCOME, THERE IS NO MERIT IN MAKING ANY DISALLOWANCE ITA NO. 2428 /P U N/20 1 6 PRANAV AGRO INDUSTRIES LTD. 5 UNDER SECTION 43B OF THE ACT. THE GROUND OF APPEAL NO.4 RAISED BY REVENUE IS THUS, DISMISSED. 1 3 . IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 21 ST DAY OF FEBRUARY , 201 9 . SD/ - SD/ - ( D.KARUNAKARA RAO ) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 21 ST FEBRUARY , 201 9 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / T HE RESPONDENT; 3. ( ) / THE CIT(A) - 3 , PUNE ; 4. THE PR. CI T - 2 , PUNE ; 5. 6. , , / DR A , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE