M/s. Karnataka Forest Development Corporation Limited, Bengaluru V. Deputy Commissioner of Income Tax, Circle-4(1)(1), Bengaluru

ITA 2700/BANG/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9690 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 12-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K N DHANDA
• Assessee Lawyers: B S BALACHANDRAN
• Section: 143(3); 142(1); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES B BENCH: BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA. NO.2700/BANG/2017 (ASSESSMENT YEAR: 2012-13) M/S. KARNATAKA FOREST DEVELOPMENT CORPORATION LIMITED, VANAVIKAS, 18 TH CROSS, SAMPIGE ROAD, MALLESWARAM, BANGALORE-560 003 PAN: AAACK9424B VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1), BANGALORE. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI B. S. BALACHANDRAN, ADVOCATE. REVENUE BY: SHRI K.N. DHANDAPANI, JCIT (D.R) DATE OF HEARING : 13.06 .2019 DATE OF PRONOUNCEMENT : 26 .06 .2019 O R D E R PER PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-2, BANGALORE UNDER SECTION 143(3) AND 250 OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 2 ITA NO.2700/BANG/2017 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RAISING EUCALYPTUS TREES AND RUBBER PLANTATION AND PROCESSING AND SELLING. THE ASSESSEE HAS FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 ON 28.09.2012 DECLARING A TOTAL INCOME OF RS.5,90,30,504. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND ISSUED NOTICE UNDER SECTION 142(1) OF THE ACT AND 3 ITA NO.2700/BANG/2017 THE ASSESSEE HAS APPEARED BEFORE THE ASSESSING OFFICER FROM TIME TO TIME. THE ASSESSING OFFICER IN SCHEDULE 14 OF FINANCIAL STATEMENTS FOUND THAT THE ASSESSEE HAS DISCLOSED INCOME OF RS.1,40,20,448 IN RESPECT OF EXTRACTION OF PULPWOOD AND BAMBOO ESTABLISHMENT AND OTHER CHARGES AND CLAIMED AS EXEMPT. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS CLAIMED AS AGRICULTURE INCOME BUT ON PERUSAL OF SECTION 2(1A) OF THE ACT, THE INCOME EARNED BY THE ASSESSEE COMPANY BY SALE OF SUCH PRODUCTS AND ALSO TRANSPORTATION IS NOT AGRICULTURE INCOME AND TREATED AS TAXABLE INCOME. THE ASSESSING OFFICER HAS TREATED THE INCOME AS INCOME FROM OTHER SOURCES AND ASSESSED THE TOTAL INCOME AT RS.7,30,54,952 AND PASSED THE ORDER UNDER SECTION 143(3) ON 17.3.2015. 4. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE LEARNED CIT(APPEALS) WHEREAS THE LEARNED CIT(APPEALS) CONSIDERED THE GROUNDS OF APPEAL AND FINDINGS OF THE ASSESSING OFFICER AND SUBMISSIONS DEALT AT PARA 3.5 OF THE ORDER AND RELIED ON THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2010-11 AND PARTLY ALLOWED THE APPEAL. AGGRIEVED BY THE ORDER OF LEARNED CIT(APPEALS), THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT CIT(APPEALS) HAS ERRED IN CONFIRMING THE ADDITION AND ALSO THE LEARNED CIT(APPEALS) FOLLOWED THE DECISION IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2010-11 BUT THE EXPENDITURE IN RESPECT OF EARNING OF AGRICULTURE INCOME WAS 4 ITA NO.2700/BANG/2017 NOT ALLOWED. THE LEARNED AUTHORISED REPRESENTATIVE SUPPORTED HIS STAND WITH THE COPY OF THE ORDER PASSED FOR THE ASSESSMENT YEAR 2010-11 WHERE RELATABLE EXPENSES WERE ALLOWED AS DEDUCTION FROM SUCH INCOME AND PRAYED FOR ALLOWING THE ASSESSEE'S APPEAL. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF LEARNED CIT(APPEALS). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE LEARNED AUTHORISED REPRESENTATIVES CONTENTION IN RESPECT OF CLAIM/EXPENDITURE MADE BY THE ASSESSEE IN THE AGRICULTURE ACTIVITY, WAS NOT CONSIDERED BY THE LEARNED CIT(APPEALS) WHERE EXPLANATIONS ARE OFFERED BY THE ASSESSEE AND FURTHER EMPHASIZED THAT THE LEARNED CIT (APPEALS) HAS RELIED ON THE DECISION IN ASSEESSE'S OWN CASE FOR THE AY 2010-11 AT PARA 3.5 OF THE ORDER AND CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER BUT OVERLOOKED THE FACT OF GRANTING DEDUCTION IN RESPECT OF RELATABLE EXPENDITURE CLAIMED BEING IN THE NATURE OF AGRICULTURE OPERATIONS EXPENDITURE. THE LEARNED A.R DEMONSTRATED AND RELIED ON THE ORDER OF LEARNED CIT(APPEALS) FOR THE ASSESSMENT YEAR 2010-11 IN ITA NO.59/DC- 11(5)/13-14, WE PERUSED THE SAID ORDER AND IN PARTICULAR AT PARA 3.2 AND 3.3 AND WE CONSIDERED APPROPRIATE TO REFER THE PARAS WHICH READ AS UNDER : 5 ITA NO.2700/BANG/2017 6 ITA NO.2700/BANG/2017 WE FOUND THE ORDER OF THE LEARNED CIT(APPEALS) FOR THE ASSESSMENT YEAR 2010-11 HAS BEEN APPLIED TO THE PRESENT CASE, AND CONFIRMED THE ACTION OF THE ASSESSING OFFICER BUT AS FAR AS THE CLAIM OF EXPENDITURE RELATABLE TO AGRICULTURE ACTIVITIES ARE CONCERNED THE LEARNED CIT(APPEALS) ORDER IS SILENT. WE ARE OF THE CONSIDERED OPINION THAT THESE FACTS WERE NOT DEALT BY THE ASSESSING OFFICER IN THE PRESENT PROCEEDINGS. ACCORDINGLY WE RESTORE THE ENTIRE DISPUTED ISSUE TO THE ASSESSING OFFICER WITH RESPECT TO ALLOWING OF THE RELATABLE EXPENDITURE AND THE LEARNED ASSESSING OFFICER SHALL VERIFY AND EXAMINE THE GENUINENESS OF THE CLAIM RELATABLE TO AGRICULTURE OPERATIONS AS DEALT IN PARA 3.3 OF THE LEARNED CIT(APPEALS) ORDER FOR THE ASSESSMENT YEAR 2010-11 AND DIRECT THE ASSESSING OFFICER TO GRANT THE DEDUCTION AS DISCUSSED AND THE ASSESSEE SHALL BE PROVIDED ADEQUATE OPPORTUNITY OF HEARING AND CO-OPERATE IN SUBMITTING THE INFORMATION AND ALLOW THE GROUNDS OF APPEAL OF ASSESSEE FOR STATISTICAL PURPOSES. 7 ITA NO.2700/BANG/2017 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JUNE, 2019. SD/- SD/- (A.K. GARODIA) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26.06.2019. *REDDY GP COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE