State Farming Corporation of Kerala Limited, Kollam V. Assistant Commissioner of Income Tax, Kollam

ITA 262/COCH/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4514 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 05-07-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 11-05-2009
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: R KRISHNA IYER
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APP ELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N. BARATHVAJA SANKAR, VP(BZ)) AND N. VIJAYAKUMARAN, JM I.T.A. NO. 262/COCH/2009 ASSESSMENT YEAR:2005-06 STATE FARMING CORPORATION OF KERALA LTD., PUNALUR. [PAN:AAACT8150F] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOLLAM. (ASSESSEE -APPELLANT) (REVENUE - RESPONDENT) ASSESSEE BY SHRI R.KRISHNA IYER, CA REVENUE BY SHRI S.R.SENAPATI, SR. DR O R D E R PER N.VIJAYAKUMARAN, JM THIS APPEAL BY THE ASSESSEE IS FOR THE ASSESSMENT YEAR 2005-06. IT IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-IV, KOCHI DATED 25.2.2009. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE HAS NOT PRESSED GROUND NO. 4 WHICH IS REGARDING THE ALLEGED INCOME FROM PILGRIM CENTRE AND GROUND NO. 5 WHICH RELATES TO LIABILITY OF AGRICULTURAL IN COME AND THE ISSUE OF ACCRUAL AND ALLOWABLE EXPENSES FOR THE RELEVANT ASSESSMENT YEAR WAS ALSO NOT PRESSED. ONE MORE GROUND NO. 7, THE GROUND WHICH IS RELATING TO THE C OMPUTATION OF PROFIT ON SALE OF ASSET AND LOSS ON REVALUATION WAS ALSO NOT PRESSED. ALL THESE THREE GROUNDS WERE NOT PRESSED BY THE LD. COUNSEL FOR THE ASSESSEE AND TO THAT EXTENT HE HAS MADE AN ENDORSEMENT. HENCE, GROUND NOS. 4, 5 & 7 ARE DISMISSED AS NOT PRESSED. 3. GROUND NOS. 1 & 8 ARE GENERAL IN NATURE. 4. GROUND NOS. 2 AND 3 REPRESENT ONE ISSUE OF THE A LLOWANCE OF THE CLAIM OF DEPRECIATION. ITA.NO.262 /COCH/2009 2 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD, INCLUDING THE PRECEDENTS. AS RIGHTLY CONTE NDED BY THE LD. JR. DR, THE LD. CIT(A) FOUND THAT FOR THE ASSESSMENT YEAR 2002-03, HE DIRE CTED THE AO TO VERIFY THE REQUISITE DOCUMENTS SO AS TO ENSURE THE AUTHENTICITY OF THE F IGURES OF THE EARLIER YEARS AND ARRIVE AT THE CORRECT W.D.V. FOR THE YEAR UNDER CONSIDERATION AND THEREBY TO DETERMINE THE ELIGIBLE DEPRECIATION FOR THIS YEAR AS PER THE PROVISIONS OF THE I.T. ACT. FURTHER, HE DIRECTED THE ASSESSEE TO FURNISH BEFORE THE AO ALL THE DOCUMENTS REQUIRED IN THIS BEHALF. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON THE PERUSA L OF THE FINDINGS OF THE LD. CIT(A), INCLUDING THE ARREARS OF DEPRECIATION, WE FIND THAT BY REJECTING THE ALTERNATE CONTENTION MADE BY THE ASSESSEE, THE LD. CIT(A) FOUND THAT THE DEPRECIATION HAS TO BE ARRIVED AT ON THE BASIS OF ACTUAL COST OF THE ASSETS OR ACTUAL CO ST REDUCED BY THE W.D.V. AS THE CASE MAY BE. UNDER THE ABOVE CIRCUMSTANCES, WE DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A) AND HENCE, GROUND NOS. 2 & 3 DESERVE TO BE D ISMISSED AND ARE ACCORDINGLY, DISMISSED. 6. THE NEXT CONTENTIOUS ISSUE IS THE ADDITION OF ` 25 LAKHS AND ` 4 LAKHS BEING INTEREST ON LOAN TO HORTICORP AND PENAL INTEREST ON LOAN. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE EARLIER YEARS ORDER, THE TRIBUNAL IN THE ASSESSEES OWN CASE HELD IN I.T.A. NO. 505/COCH /2007 FOR THE ASSESSMENT YEAR 2004- 05 VIDE ORDER DATED 13.8.2009, THE TRIBUNAL DECIDED THE ISSUE AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. 8. HOWEVER, THE LD. COUNSEL FOR THE ASSESSEE RAISED THE CONTENTION ON THE SAME ISSUE. THE LD. CIT(A) FOR THE ASSESSMENT YEAR 2001-02 IN THE CASE OF ONE ASSESSEE, HINDUSTAN NEWSPRINT LTD. DELETED THE ADDITION VIDE ITS ORDER DATED 25..3.2004 AND THE TRIBUNAL VIDE ITS ORDER DATED 20 TH AUGUST 2004 IN I.T.A. NO. 192/COCH/2003 FOR THE AS SESSMENT YEAR 1998-99 ALLOWED THE APPEAL OF THE ASSESSEE. (COPY O F WHICH IS PLACED IN THE ASSESSEES PAPER BOOK PG. NO. 30-36) THE LD. JR. DR, ON THE OTHER HAND, WOULD SUBMIT THAT THE ASSESSEES CONTENTION THAT THE INTEREST NOT ACCRUED IS NOT CORRECT AS THE ASSESSEE IS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING. HEN CE, IN THE ABSENCE OF ANY WAIVER ITA.NO.262 /COCH/2009 3 DECISION NOT TO CLAIM INTEREST, THE INTEREST IS TO BE THE INCOME OF THE ASSESSEE AS THE ASSESSEE IS FOLLOWING THE MERCANTILE SYSTEM OF ACCO UNTING. HENCE, THE TRIBUNAL ALSO IN EARLIER YEAR DECIDED HE ISSUE AGAINST THE ASSESSEE. HENCE, TO BE CONSISTENT WITH THE FINDINGS OF THE TRIBUNAL, WE CONFIRM THE ORDER OF T HE LD. CIT(A) FOLLOWING THE EARLIER YEARS DECISION OF THE TRIBUNAL.. 9. IN THE RESULT, THE ASSESSEE S APPEAL IS DISMISS ED. SD/- SD/- (N.BARATHVAJA SANKAR) ( N.VIJAYAKUMARAN) VICE-PRESIDENT JUDICIAL MEMBER PLACE: ERNAKULAM DATED: 6TH JULY, 2011 GJ COPY TO: 1. STATE FARMING CORPORATION OF KERALA LTD., PUNALU R. 2. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-1, KOLLAM.. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R./I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. ITA.NO.262 /COCH/2009 4 (N.BARATHVAJA SANKAR) ( N.VIJAYAKUMARAN) VICE-PRESIDENT JUDICIAL MEMBER PLACE: ERNAKULAM DATED: JULY, 2011 GJ COPY TO: 1. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, . 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, TRIVA NDRUM. 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R./I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. ITA.NO.262 /COCH/2009 5