D.C.I.T., Circle-4, Kolkata, Kolkata V. M/s Bormah Jan Tea Co. (1936) Ltd., Kolkata

ITA 2724/KOL/2013

• Counselvise Citation: 272423514 RSA 2013
• Duration Of Justice: 1 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 05-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEBASISH LAHIRI
• Assessee Lawyers: RAM KISHAN NOWAL

Judgement Text

I.T.A. NO . 2 724 / KOL ./20 1 3 ASSESSMENT YEAR: 200 3 - 20 0 4 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P. M . JAGTAP , ACCOUNTANT MEMBER I.T.A. NO. 2 724 / KOL / 20 1 3 ASSESSMENT YEAR : 200 3 - 20 0 4 DEPUTY COMMISSIONER OF INCOME TAX, ....... ...... ............... ....APPELLANT CIRCLE - 4, K OLKATA, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 700 069 - VS. - M/S. BORMAH JAN TEA CO. (1936) LTD., ..... . ......... .......... .RESPONDENT 3, NETAJI SUBHAS ROAD, KOLKATA - 700 001 [PAN : AABCT 2010 K] APPEARANCES BY: SHRI DEBASISH LAHIRI, JCIT, SR. D.R., FOR THE DEPARTMENT SHRI RAM KISHAN NOWAL, A.R., FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : SEPTEMBER 15 , 2 01 5 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 18 , 201 5 O R D E R TH IS APPEAL FIL ED BY THE REVENU E IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - IV, KOLKATA D ATED 2 4 . 07 .20 1 3 FOR THE ASSESSMENT YEAR 200 3 - 0 4 AND IN THE SOLITARY GROUND RAISED THEREIN , THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN DELETING THE DISALLOWANCE OF RS.17,26,209/ - MADE BY THE ASSESSI NG OFFICER ON ACCOUNT OF CESS PAID BY THE ASSESSEE ON GREEN LEAF. 2. AT THE OUTSET, IT IS OBSERVED THAT THERE IS A DELAY OF 18 DAYS ON THE PART OF THE REVENUE IN FILING THE APPEAL BEFORE THIS TRIBUNAL. IN THIS REGARD, APPLICATION HAS BEEN FILED BY THE REV ENUE SEEKING CONDONATION OF THE SAID DELAY AND KEEPING IN VIEW THE REASONS GIVEN THEREIN WHICH, ACCORDING TO ME, CONSTITUTE A REASONABLE SUFFICIENT CAUSE, I CONDONE THE SAID DELAY. 3 . THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, WHICH IS ENGAGED IN THE BUSINESS OF SALE OF BLACK TEA MANUFACTURED FROM LEAVES GROWN FROM ITS I.T.A. NO . 2 724 / KOL ./20 1 3 ASSESSMENT YEAR: 200 3 - 20 0 4 PAGE 2 OF 4 OWN TEA GARDEN. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 28.11.2003 DECLARING TOTAL INCOME AT NIL AFTER ADJUSTING THE BROUGHT FORWARD LOSSES OF THE EARL IER YEARS. IN THE SAID RETURN, DEDUCTION OF RS. 17,26,209/ - WAS CLAIMED BY THE ASSESSEE ON ACCOUNT OF CESS PAID ON GREEN LEAF. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS SUBMITTED BY THE ASSESSEE THAT ITS CLAIM FOR THE SAID DEDUCTION IS DULY SUPPOR TED BY THE DECISION OF THE HON BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. - A.F.T. INDUSTRIES LIMITED REPORTED IN 270 ITR 167. ALTHOUGH THIS POSIT ION WAS NOT DISPUTED BY THE ASSESSING OFFICER, HE DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON AC COUNT OF CESS PAID ON GREEN LEAF F OR KEEPING THE ISSUE ALIVE IN VIEW THE SLP FILED BY THE DEPARTMENT BEFORE THE HON BLE SUPREME COURT AGAINST THE ORDER OF THE HON BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. - A.F.T. INDUSTRIES LIMITED (SUPRA). 4 . ON AP PEAL, LD. CIT(APPEALS) DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS ISSUE BY FOLLOWING THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF A.F.T. INDUSTRIES LIMITED (SUPRA). AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENU E HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL ON THE FOLLOWING GROUND: - CIT(A) ERRED IN DELETING THE DISALLOWING OF CESS ON GREEN LEAF, IGNORING THE FACT THAT CESS ON GREEN LEAF RELATED TO INCOME ATTRIBUTABLE TO AGRICULTURE ACTIVITIES DOES NO T FALL IN THE AMBIT OF I.T. ACT AND ON SAME ISSUE APPEAL IS PENDING BEFORE HON BLE SUPREME COURT IN THE CASE OF AFT INDUSTRIES . 5 . I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THA T THE SOLITARY ISSUE INVOLVED IN THIS APPEAL OF THE REVENUE RELATING TO THE ASSESSEE S CLAIM FOR DEDUCTION ON ACCOUNT OF CESS PAID ON GREEN LEAF IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE HON BLE CALCUTTA H IGH COURT IN THE CASE OF A.F.T. INDUSTRIES LIMITED (SUPRA), WHEREIN IT WAS HELD AS UNDER: - I.T.A. NO . 2 724 / KOL ./20 1 3 ASSESSMENT YEAR: 200 3 - 20 0 4 PAGE 3 OF 4 IN RESPECT OF COMPUTATION OF INCOME OF TEA GROWN AND MANUFACTURED, A FICTION HAS BEEN CREATED UNDER WHICH BOTH THE AGRICULTURAL COMPONENT AND THE BUSINESS COMPONENT OF THE INCOME WOULD BE ASSESSED TOGETHER FOR THE PURPOSE OF COMPUTING THE INCOME UNDER THE ACT AND ONLY AFTER THE COMPUTATION OF THE TOTAL INCOME, THE APPORTIONMENT IS TO BE MADE DETERMINING 60 PER CENT, AS AGRICULTURAL INCOME. WHEN BY FICTION THE INCOME IS COMPUTED AS AN INCOME UNDER THE ACT, ALL DEDUCTIONS AS ARE AVAILABLE BOTH FOR THE AGRICULTURAL COMPONENT AND FOR THE BUSINESS COMPONENT OF THE INCOME ARE TO BE ALLOWED AS A NATURAL COROLLARY. THEREFORE, THE ENTIRE AMOUNT PAID AS CESS UNDER THE AGRICULTU RAL INCOME TAX ACT IS ELIGIBLE FOR DEDUCTION . 6 . AT THE TIME OF HEARING, LD. D.R. HAS NOT DISPUTED THE POSITION THAT THE ISSUE INVOLVED IN THIS APPEAL OF THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HON BLE CALCUTTA HI GH COURT IN THE CASE OF A.F.T. INDUSTRIES LIMITED (SUPRA). HE HAS CONTENDED THAT THIS ISSUE, HOWEVER, IS RAISED IN THE PRESENT APPEAL FILED BEFORE THE TRIBUNAL JUST TO KEEP THE SAME ALIVE KEEPING IN VIEW THE SLP FILED BY THE DEPARTMENT BEFORE THE HON BLE S UPREME COURT AGAINST THE DECISION OF THE HON BLE CALCUTTA HIGH COURT AND EVEN THE GROUND RAISED BY THE DEPARTMENT IN THE PRESENT APPEAL RAISES THIS LIMITED CONTENTION. SINCE THERE IS NOTHING BROUGHT ON RECORD BEFORE ME TO SHOW THAT THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF A.F.T. INDUSTRIES LIMITED (SUPRA) HAS BEEN REVERSED BY THE HON BLE SUPREME COURT, THE POSITION AS IT STANDS NOW IS THAT THE ISSUE INVOLVED IN THIS APPEAL OF THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE ASSES SEE BY THE SAID DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT AND RESPECTFULLY FOLLOWING THE SAME , I UPHOLD THE ORDER OF THE LD. CIT(APPEALS) ALLOWING THE DEDUCTION CLAIMED BY THE ASSESSEE ON ACCOUNT OF CESS PAID ON GREEN LEAF. 7 . IN THE RESULT, THE A PPEAL OF THE REVENU E IS TREATED A S DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 18 , 2015. SD/ - (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA , THE 18 TH D AY OF SEPTEMBER , 201 5 I.T.A. NO . 2 724 / KOL ./20 1 3 ASSESSMENT YEAR: 200 3 - 20 0 4 PAGE 4 OF 4 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CI RCLE - 4, KOLKATA, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 700 069 (2) M/S. BORMAH JAN TEA CO. (1936) LTD., 3, NETAJI SUBHAS ROAD, KOLKATA - 700 001 (3) COMMISSIONER OF INCOME - TAX (APPEALS) - IV, KOLKATA (4) COMMISSIONER OF INCOME TAX , KOLKATA ( 5 ) T HE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR , INCOME TAX APPELLATE TRIBUNAL , KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .