Income Tax Officer-Ward-4(2), Kolkata, Kolkata V. M/s Hanuman Texnit Industries Ltd., Kolkata

ITA 2760/KOL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9553 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 01-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-12-2013
• Court: TRIBUNAL
• Department Lawyers: A SALLONG YADEN ADL
• Assessee Lawyers: S K DANGI
• Keywords: Reasonable cause; Revised return; Reassessment proceedings
• Section: 80IB; 139(5); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H KOLKATA BEFORE SHRI WASEEM AHMED, AM & SHRI S.S.VISWANETHR A RAVI, JM ./ ITA NO.2760/KOL/2013 ( / ASSESSMENT YEAR: 2009-10) ITO, WARD-4(2), P-7, CHOWRINGHEE SQUARE, AAYAKAR BHAVAN, 8 TH FLOOR, KOLKATA-700001 VS. M/S HANUMAN TEXNIT INDUSTRIES LTD., NICCO HOUSE, 2, HARE STREET, KOLKATA-1 ./ ./PAN/GIR NO. : AAACH 6426 J ( /APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI A. SALLONG YADEN, ADL.CIT /ASSESSEE BY : SHRI S.K.DANGI, FCA / DATE OF HEARING : 19/12/2016 /DATE OF PRONOUNCEMENT 13/01/2017 / O R D E R PER SHRI WASEEM AHMED, AM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 23.08.2013, PASSED BY THE LD. COMMISSIONER OF INCOM E TAX (APPEALS)-IV, KOLKATA IN APPEAL NO.231/CIT(A)-IV/1112, PERTAINING TO ASSESSMENT YEAR 2009-10. THE ASSESSMENT WAS FRAMED BY JCIT (OSD), C IRCLE-4, KOLKATA U/S.143(3) OF THE INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS THE ACT. SHRI A. SALLONG YADEN, LD. DEPARTMENTAL REPRESENTAT IVE APPEARED ON BEHALF OF REVENUE AND SHRI S.K. DANGI, LD. AUTHORIZ ED REPRESENTATIVE APPEARED ON BEHALF OF ASSESSEE. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, TH E CLT(A) ERRED IN LAW AS WELL AS ON FACTS IN DELETING THE DISALLOWANC E OF RS.30,53,7 45/- AS DEDUCTION CLAIMED BY THE ASSESSE E U/S.80IE, IGNORING THE FACT THAT THE ASSESSEE FAILED TO FULFI LL PRE-CONDITION OF FILING AUDIT REPORT IN 10CCB FORM ALONG WITH THE ORIGINAL RETURN U/S.139(1) READ WITH SECTION 80IE(6) TO BECOME ELIG IBLE FOR DEDUCTION U/S.80IE. ITA NO.2760/13 M/S HANUMAN TEXNIT INDUSTRIES LTD. 2 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, TH E CLT(A) ERRED IN LAW AS WELL AS ON FACTS IN HOLDING THAT CESS ON GRE EN LEAF OF RS.17,14,746/- IS AN ALLOWABLE EXPENDITURE IGNORING THE FACT THAT IT IS DIRECTLY ATTRIBUTABLE TO CORE AGRICULTURE ACT IVITIES OF THE APPELLANT TAXABLE UNDER STATE AGRICULTURE INCOME TA X, BEYOND THE PURVIEW OF CENTRAL INCOME TAX AND ON THE SAME I SSUE SLP IS PENDING IN THE CASE OF AFT INDUSTRIES. 3. THE FIRST ISSUE RAISED BY REVENUE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE BY AO FOR R S. 30,53,745/- FOR DEDUCTION U/S 80IE OF THE ACT ON ACCOUNT OF NON-FIL ING OF AUDIT REPORT IN FORM NO.10CCB ALONG WITH THE RETURN OF INCOME U/S.1 39(1) OF THE ACT. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN TH E PRESENT CASE IS A LIMITED COMPANY AND ENGAGED IN THE MANUFACTURING BU SINESS OF TEA. THE ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME DATED 22-9-2009 WITHOUT CLAIMING DEDUCTION U/S.80IE OF THE ACT. THE ASSESSE E CLAIMED THE DEDUCTION U/S.80IE OF THE ACT SUBSEQUENTLY BY FILIN G THE REVISED RETURN OF INCOME ON 7 TH NOVEMBER, 2009. ACCORDINGLY, THE AO OBSERVED THAT THE AUDIT REPORT IN FORM NO.10CCB WAS NOT FILED ALONG W ITH THE ORIGINAL RETURN OF INCOME FILED U/S.139(1) OF THE ACT, AND, THEREFO RE, THERE IS A VIOLATION OF PROVISIONS OF SECTION 80IA(7) R.W.S. 80IE(6) OF THE ACT. AS PER THE PROVISIONS, IT IS MANDATORY FOR CLAIMING THE DEDUCT ION U/S.80IE OF THE ACT TO FILE THE AUDIT REPORT IN FORM NO.10CCB WITHIN THE D UE DATE AS REFERRED U/S.139(1) OF THE ACT. ACCORDINGLY, THE AO DISALLOW ED THE CLAIM OF THE ASSESSEE AND ADDED TO THE TOTAL INCOME. 5. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHEREAS ASSESSEE SUBMITTED THAT THE DEDUCTION U/S 8 0IE OF THE ACT WAS NOT CLAIMED IN THE ORIGINAL RETURN OF INCOME DUE TO MISTAKE BUT THE SAME ITA NO.2760/13 M/S HANUMAN TEXNIT INDUSTRIES LTD. 3 WAS CLAIMED IN THE REVISED RETURN WHICH WAS FILED W ITHIN THE DUE DATES AS SPECIFIED U/S.139(5) OF THE ACT. THE ASSESSEE FURTH ER SUBMITTED THAT AS PER CBDT NOTIFICATION SO NO.866(E), DATED 27 TH MARCH, 2009, THERE WAS NO NEED TO FILE ANY ATTACHMENT WITH THE RETURN OF INCO ME. THEREFORE, THE AUDIT REPORT IN FORM 10CCB WAS NOT FILED BY THE ASSESSEE ALONG WITH RETURN OF INCOME FILED U/S 139(5) OF THE ACT. HOWEVER, THE RE PORT IN FORM NO.10CCB WAS DULY SUBMITTED AT THE TIME OF ASSESSMENT. AS SU CH, THERE WAS NO PROVISION UNDER THE INCOME TAX ACT TO FILE THE REPO RT IN FORM NO.10CCB SEPARATELY IN PHYSICAL FORM. LD. CIT(A) AFTER CONSI DERING THE SUBMISSION OF THE ASSESSEE HAS DELETED THE DISALLOWANCE MADE BY T HE AO BY OBSERVING AS UNDER :- 5.2 I HAVE PERUSED THE ASSESSMENT ORDER AS WELL AS SUBMISSION MADE BY THE A.R. OF THE APPELLANT. IT SEEMS THAT TH E ONLY REASON THAT DEDUCTION U/S.80IE(5) WAS NOT ALLOWED BY THE A .O. WAS BECAUSE IN THE ORIGINAL RETURN SUCH A DEDUCTION WAS NOT CLAIMED AND NO AUDIT REPORT ENCLOSING FORM 10CCS WAS FILED ALONG WITH THE ORIGINAL RETURN. THE DEDUCTION U/S.80IE(5) WAS CLAI MED ONLY AT THE TIME OF FILING OF THE REVISED RETURN ON 7.11.2009. THE VALIDITY OF THE REVISED RETURN ITSELF HAS NOT BEEN CHALLENGED BY TH E A.O. ON THIS ISSUE I AM FULLY IN AGREEMENT WITH THE A.R. OF THE APPELLANT THAT CIRCULAR NO.3/2009 DT.21.05.2009 OF CBDT, AT PARA-6 CLEARLY STIPULATES THAT THE RETURN REQUIRE TO BE FURNISHED BY TAXPAYER [EXCEPT IN ITR-7] SHALL NOT BE ACCOMPANIED BY ANY ATTACHMEN TS/ANNEXURE BUT THESE DOCUMENTS WILL HAVE TO BE PRODUCED BEFORE THE A.O. ON DEMAND BY HIM. IN THE APPELLANT'S CASE, IT IS AMPLY CLEAR THAT BOTH THE AUDIT REPORT AS WELL AS THE CLAIM OF DEDUCTION U/S. 80IE(5) IN FORM NO.10CCB WAS FILED DURING THE ASSESSMENT PROCE EDINGS WHEN REQUIRED BY THE A.O. I AM OF THE VIEW THAT THE RE IS NO TECHNICAL OR PROCEDURAL VIOLATION COMMITTED BY THE APPELLANT WHICH COULD CONSEQUENT THE DENIAL TO IT OF THE BENEFIT OF DEDUC TION U/S. 80IE(5). DISALLOWANCE OF THE CLAIM OF THE APPELLANT U/S.80IE (5) FOR RS.30,53,745/- IS NOT JUSTIFIED AND THE A.O. IS DIR ECTED TO ALLOW THE CLAIM OF DEDUCTION. AGGRIEVED BY THIS, THE REVENUE HAS COME UP IN APPEA L BEFORE US. 7. BEFORE US LD. DR VEHEMENTLY SUPPORTED THE ORDER OF AO. ITA NO.2760/13 M/S HANUMAN TEXNIT INDUSTRIES LTD. 4 ON THE OTHER HAND, LD. AR BEFORE US FILED THE PAPER BOOK WHICH IS RUNNING FROM PAGES 1 TO 26 AND REITERATED THE SUBMISSIONS M ADE BEFORE THE LD. CIT(A) AND HE RELIED ON THE ORDER OF LD. CIT(A). 9. WE HAVE CONSIDERED RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE IN THIS CASE RELATES TO DISALLOWANCE OF DEDUCTION CLAIMED BY THE ASSESSEE U /S.80IB OF THE ACT. THE DISALLOWANCE WAS MADE ON ACCOUNT OF TWO REASONS BY THE AO. FIRSTLY, THE DEDUCTION U/S.80IE OF THE ACT WAS CLAIMED IN TH E REVISED RETURN OF INCOME. AS PER THE PROVISIONS OF SECTION 80IE, FORM NO.10CCB WAS TO BE FILED ALONG WITH ORIGINAL RETURN OF INCOME WITHIN T HE DUE DATE AS SPECIFIED U/S.139(1). THEREFORE, IT WAS INFERRED BY THE AO TH AT FORM NO.10CCB WAS NOT AVAILABLE WITH THE ASSESSEE AT THE TIME OF ORIG INAL RETURN FILED. SECONDLY, THE AUDIT REPORT IN FORM NO.10CCB WAS NOT ATTACHED IN THE ORIGINAL RETURN FILED BY THE ASSESSEE U/S 139(1) OF THE ACT. NOW, THE ISSUE BEFORE US ARISES FOR ADJUDICATION SO AS TO WHETHER THE DISALLOWANCE MADE BY THE AO IS VALID IN THE AFORESAID FACTS AND CIRCU MSTANCES. ADMITTEDLY, IT IS FIRST YEAR OF THE ASSESSEE WHEN DEDUCTION WAS CL AIMED U/S.80IE OF THE ACT. AS PER THE PROVISIONS OF SECTION 80IE OF THE A CT, THE ASSESSEE WAS UNDER THE OBLIGATION TO FILE FORM NO.10CCB REPORT A LONG WITH THE RETURN OF INCOME, HOWEVER, WE FIND THAT THE CBDT VIDE CIRCULA R NO.3/2009, ISSUED ON 21 ST MAY, 2009, RELAXED THE PROVISIONS BY DIRECTING THA T, NO ATTACHMENT WILL BE FILED ALONG WITH THE RETURN OF INCOME. AS THERE WAS NO MECHANISM TO FILE THE AUDIT REPORT IN FORM 10CCB, EITHER IN E LECTRONIC FORM OR PHYSICAL FORM, WE FIND NO FAULT OF ASSESSEE IN THIS REGARD. THEREFORE, ON THIS GROUND ITA NO.2760/13 M/S HANUMAN TEXNIT INDUSTRIES LTD. 5 THE DISALLOWANCE MADE BY THE AO CANNOT BE SUSTAINED AND WE UPHOLD THE ORDER OF LD. CIT(A). THIS GROUND OF REVENUE IS DISM ISSED. 10. NOW, COMING TO THE OTHER ISSUE RAISED BY THE RE VENUE THAT THE CLAIM WAS MADE IN THE REVISED RETURN OF INCOME. ON PERUSA L OF FACTS, WE FIND THAT REVISED RETURN OF INCOME WAS FILED WITHIN THE TIME AS PRESCRIBED U/S.139(5) OF THE ACT. INDEED, IT IS A TECHNICAL FA ULT ON THE PART OF THE ASSESSEE NOT TO CLAIM DEDUCTION U/S.80IE OF THE ACT IN THE ORIGINAL RETURN OF INCOME BUT ORIGINAL RETURN OF INCOME WAS FILED W ITHIN THE TIME. AS SUCH THERE WAS NO DELAY IN FILING THE ORIGINAL RETURN OF INCOME ON THE PART OF THE ASSESSEE. DUE TO OVERSIGHT, THE ASSESSEE FAILED TO CLAIM DEDUCTION U/S.80IE OF THE ACT BUT THE SAME, IN OUR CONSIDERED VIEW, CANNOT BE THE BASIS FOR DENYING THE DEDUCTION CLAIMED BY THE ASSE SSEE U/S.80IE OF THE ACT AS IT WAS A PROCEDURAL REQUIREMENT. WE ALSO FIN D THAT THE AO HAS NOT BROUGHT ANY DEFECT IN THE AUDIT REPORT FILED BY THE ASSESSEE IN FORM NO.10CCB OF THE ACT. IN THIS CONNECTION, WE ALSO RE LY UPON THE DECISION OF HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF SRI S.VENKATAIAH, ITA NO.984/HYD/2011, 104 CTR 216 (93 ITR 548). THE RELE VANT EXTRACT OF THE ORDER IS REPRODUCED BELOW : 13. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIAL ON RECORD. IN THIS CASE ADMITTEDLY, THE ASSESSEE FILED THE RETURN OF I NCOME ON 23.12.2008. THE DUE DATE FOR FILING THE RETURN OF INCOME U/S. 139(1) OF THE ACT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION IN THE CASE OF THE ASSESSEE IS 31.10 .2008. AS SUCH THE RETURN FILED BY THE ASSESSEE IS BELATED. IN THIS THE ASSESSEE CLAIM ED DEDUCTION U/S. 80IC OF THE ACT WHICH WAS DISALLOWED BY THE ASSESSING OFFICER AS TH E RETURN OF THE ASSESSEE WAS NOT FILED WITHIN THE TIME AS PRESCRIBED U/S. 139(1) OF THE ACT. THE ASSESSEE HAS GIVEN REASONS FOR DELAY IN FILING THE RETURN OF INCOME TH AT THE ASSESSEE WAS PREPARING ITS ACCOUNTS THROUGH COMPUTER AND THE COMPUTER GOT CORR UPTED DUE TO VIRUSES AND IN SPITE OF CONTINUOUS EFFORTS BY THE COMPUTER TECHNIC AL PERSONNEL TO RETRIEVE THE DATA IN TIME FOR FILING THE RETURN OF INCOME, PROBLEM PE RSISTED IN THE SYSTEM. BY TRYING TO RETRIEVE THE DATA FOR 4 DAYS THE REQUIRED DATA COUL D NOT BE RETRIEVED AND THE BACKED ITA NO.2760/13 M/S HANUMAN TEXNIT INDUSTRIES LTD. 6 UP DATA WERE AVAILABLE ONLY UP TO 31ST JANUARY, 200 8 IN THE CD AND THE ENTIRE DATA FOR THE TWO MONTHS PERIOD, FEBRUARY AND MARCH, 2008 , HAD TO BE RE-ENTERED INTO THE COMPUTER SYSTEM AGAIN. ON PREPARATION OF THE FINAL ACCOUNTS AND FINALISING OF STATUTORY AUDIT IT TOOK A LITTLE EXTRA TIME THAT RE SULTED IN BELATED FILING OF RETURN OF INCOME. THUS THERE WAS A DELAY OF 74 DAYS IN FILING THE RETURN OF INCOME WHICH IS BEYOND THE CONTROL OF ASSESSEE. THIS WAS ALSO CONFI RMED BY THE STATUTORY AUDITOR VIDE HIS LETTER DATED 20.3.2011. BEING SO, IN OUR O PINION THERE IS A REASONABLE CAUSE FOR FILING THE RETURN OF INCOME BELATEDLY AND THIS IS BEYOND THE CONTROL OF THE ASSESSEE. WHEN THE SUBSTANTIAL QUESTION OF JUSTICE INVOLVED TECHNICALITIES SHOULD BE IGNORED. FURTHER, WE ARE SUPPORTED BY THE ORDER OF THE TRIBUNAL IN [IT APPEAL NOS. 1231 & 1199/HYD/2010 IN THE CASE OF DY. CIT V. VEGA CONVEYORS & AUTOMATION LTD. ORDER DATED 31ST DECEMBER, 2010] WHEREIN IN PA RA 5 OF THE ORDER THE TRIBUNAL HELD AS FOLLOWS: '5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE ORDERS OF THE LOWER AUTHORITIES, AND OTHER MATERIAL AVAILABLE ON RECORD , INCLUDING THE CASE-LAW RELIED UPON BY THE PARTIES. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE IN THE PRESENT CASE HAS FILED THE AUDIT REPORT IN FORM 10CCB DURING THE COURSE OF REASSESSMENT PROCEEDINGS. THE ISSUE THAT ARISES FOR CONSIDERATIO N IS WHETHER THE ASSESSING OFFICER WAS JUSTIFIED IN DISALLOWING THE ASSESSEE'S CLAIM FOR DEDUCTION UNDER S. 80IB ON THE GROUND THAT THE AUDIT REPORT IN FORM 10 CCB WAS NOT FILED ALONG WITH THE RETURN OF INCOME; OR WHETHER THE CIT(A) WA S CORRECT IN PROCEEDING ON THE BASIS OF FORM10CCB FILED DURING THE COURSE OF R E-ASSESSMENT PROCEEDINGS AND DIRECTING THE ASSESSING OFFICER TO ALLOW THE CL AIM OF THE ASSESSEE FOR DEDUCTION UNDER S. 80IB OF THE ACT. IT IS SETT LED POSITION OF LAW, AS CONSISTENTLY HELD BY VARIOUS BENCHES OF THIS TRIBUN AL AND AS HELD IN VARIOUS DECISIONS REFERRED TO BY THE CIT(A) IN THE IMPUGNED ORDER, THAT THOUGH FILING OF AUDIT REPORT IN FORM10CCB IS MANDATORY AND PREREQU ISITE FOR DEDUCTION UNDER S. 80IB, NON-FILING OF THE SAME ALONG WITH THE RET URN OF INCOME IS ONLY A CURABLE DEFECT, AND ASSESSEE'S CLAIM FOR DEDUCTION HAS TO B E CONSIDERED ON ITS MERITS AS AND WHEN THE DEFECT IS CURED BY FILING FORM 10CCB. WE ARE FORTIFIED IN THIS BEHALF BY THE DECISION OF THE JURISDICTIONAL HIGH C OURT IN THE CASE OF HEMSONS INDUSTRIES (SUPRA), RELIED UPON BY THE LEARNED COUN SEL FOR THE ASSESSEE. IT IS CONTENDED BY THE LEARNED DEPARTMENTAL REPRESENTATIV E THAT THE ASSESSEE'S CLAIM FOR DEDUCTION UNDER S. 80IB CAN BE ENTERTAINED AND EXAMINED ON MERITS, WHEN THE AUDIT REPORT IS FILED BEFORE THE COMPLETION OF ASSESSMENT, WHICH HAS NOT BEEN DONE IN THE PRESENT CASE, SINCE THE AUDIT REPORT WA S FILED ONLY DURING THE COURSE OF REASSESSMENT PROCEEDINGS INITIATED BY THE ASSESS ING OFFICER, WHICH CANNOT END UP GIVING ADDITIONAL DEDUCTIONS/BENEFITS TO THE ASS ESSEE. WE DO NOT FIND MERIT EVEN IN THIS CONTENTION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE. IN THE CASE OF HEMSONS INDUSTRIES (SUPRA), BEFORE THE JURISDICT IONAL HIGH COURT, FOR ONE OF THE YEARS UNDER APPEAL BEFORE HON'BLE HIGH COURT, V IZ., ASSESSMENT YEAR 1979- 80, AUDIT REPORT WAS FILED DURING THE COURSE OF RE- ASSESSMENT PROCEEDINGS AND IN RESPONSE TO THE SHOW-CAUSE NOTICE UNDER S. 148 ISSU ED BY THE ASSESSING OFFICER. IN THIS VIEW OF THE MATTER, RESPECTFULLY FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT CITED ABOVE, AMONG OTHERS, WE FIND NO JU STIFICATION TO INTERFERE WITH THE ORDER OF THE CIT(A). WE ACCORDINGLY UPHOLD THE SAME AND REJECT THE GROUNDS OF THE REVENUE IN THIS APPEAL.' 14. IN OUR OPINION, IN VIEW OF THE ABOVE DISCUSSION, T HE CLAIM OF THE ASSESSEE CANNOT BE DENIED ON TECHNICALITIES WHEN THE ASSESSEE IS LEGAL LY OTHERWISE ENTITLED FOR DEDUCTION. AS SUCH WE ARE INCLINED TO DISMISS THE APPEAL FILED BY THE REVENUE AS DEVOID OF MERIT. ITA NO.2760/13 M/S HANUMAN TEXNIT INDUSTRIES LTD. 7 RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF TH E TRIBUNAL, WE FIND NO MERITS IN THIS GROUND OF APPEAL RAISED BY THE REVEN UE. HENCE, WE DISMISS THE APPEAL OF THE REVENUE ON THIS GROUND. 11. SECOND ISSUE RAISED BY THE REVENUE IN THIS APPE AL IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE AO FOR R S.17,14,746/- ON ACCOUNT OF CESS EXPENDITURE CLAIMED BY THE ASSESSEE . 12. THE ASSESSEE DURING THE YEAR HAS CLAIMED CESS E XPENSES ON THE PRODUCTION OF GREEN LEAF MADE IN THE GARDENS AS PER THE PROVISION OF ASSAM GOVERNMENT. THE ASSESSEE CLAIMED DEDUCTION OF SUCH CESS BEFORE APPORTIONING THE COMPOSITE INCOME AS PER RUL E 8 OF INCOME TAX RULES. THE ASSESSEE ALSO RELIED ON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. A.F.T INDUSTRIES LTD. (2004) , 270 ITR 167 (CAL). HOWEVER, THE AO DISALL OWED THE CLAIM OF THE ASSESSEE BY OBSERVING THAT AGAINST THE ORDER OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF A.F.T INDUSTRIES LTD. (SUPRA), THE REVENUE HAS FILED AN SLP BEFORE THE HONBLE SUPREME COURT WHICH HAS BEEN ADMITTED. SINCE THE MATTER IS PENDING BEFORE T HE HONBLE SUPREME COURT, THEREFORE, THE AO TREATED THE CESS AS NON-DE DUCTIBLE EXPENDITURE FROM THE COMPOSITE INCOME OF THE ASSESSEE AND DISAL LOWED THE SAME AND ADDED TO THE TOTAL INCOME. 13. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO HAS DELETED THE ADDITION MADE BY THE AO BY OBSERVIN G AS UNDER :- 6.2 I AM IN AGREEMENT WITH THE SUBMISSION OF THE A .R. OF THE APPELLANT. THE FACT THAT THE DEPARTMENTAL SLP IS PE NDING BEFORE THE HONBLE SUPREME COURT AGAINST THE DECISION OF THE H ONBLE KOLKATA ITA NO.2760/13 M/S HANUMAN TEXNIT INDUSTRIES LTD. 8 HIGH COURT IN RESPECT OF AFT INDUSTRIES LTD VS. CIT 270 ITR 167 WILL NOT HAVE ANY EFFECT SINCE THE HONBLE APEX COURT HA S NEITHER SET ASIDE THE ORDERS OF THE KOLKATA HIGH COURT NOR GRAN TED ANY STAY. ADDITION MADE ON THIS ACCOUNT FOR RS.17,14,746/- IS DELETED. AGGRIEVED BY THIS, REVENUE HAS COME UP IN APPEAL BE FORE US. 15. LD. DR VEHEMENTLY SUPPORTED THE ORDER OF AO WHE REAS LD. AR RELIED ON THE ORDER OF LD. CIT(A). 16. WE HAVE CONSIDERED RIVAL CONTENTIONS OF BOTH TH E PARTIES. THE ISSUE IN THE INSTANT CASE RELATES TO DISALLOWANCE OF CESS EXPENDITURE CLAIMED BY THE ASSESSEE. THE HONBLE HIGH COURT OF CALCUTTA HA S DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BUT AGAINST THE SAME ORDE R THE REVENUE HAS FILED SLP IN THE HONBLE APEX COURT WHICH HAS BEEN ADMITTED FOR FINAL ADJUDICATION. IN VIEW OF THIS, THE AO HAS DISALLOWE D THE EXPENDITURE CLAIMED BY THE ASSESSEE IN THE NAME OF CESS. HOWEVE R, ON PERUSAL OF RECORD, WE FIND THAT IN IDENTICAL FACTS AND CIRCUMS TANCES, HONBLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. M/S APEEJAY TEA & CO. LTD. CIVIL APPEAL NO.1105 OF 2006 , ORDER DATED 6 TH AUGUST, 2015 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RE LEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW :- O R D E R THE RESPONDENT-ASSESSEE HAD PAID CESS ON GREEN LEAF TO THE GOVERNMENT OF ASSAM WHICH WAS LEVIED UNDER ASSAM TAXATION (ON SPECIFIED LAND) ACT, 1990. IN ITS INCOME TAX RETURN, IT HAD CLAIMED THE SAME AS DEDUCTION WHICH HAS BEEN ALLOWED BY THE HIGH COURT. THE RELEV ANT DISCUSSION IN THIS BEHALF IS AS UNDER: - 'HOWEVER, THE LEARNED TRIBUNAL HAD HELD THAT THE DE DUCTION IS ELIGIBLE AFTER COMPUTING THE INCOME UNDER RULE 8 AN D THE APPORTIONMENT IS TO BE MADE ONLY AFTER THE INCOME I S SO COMPUTED. SUCH APPORTIONMENT CANNOT BE MADE BE FARE THE DEDUC TION. RULE 8 OF THE INCOME TAX RULES, 1962 REQUIRES THAT THE COM PUTATION IS TO BE MADE AS IF BY FICTION THE ENTIRE INCOME OUT OF T HE TEA GROWN AND ITA NO.2760/13 M/S HANUMAN TEXNIT INDUSTRIES LTD. 9 MANUFACTURED AS INCOME ASSESSABLE UNDER THE INCOME TAX ACT, 1961. IN VIEW OF RULE 8 THE INCOME SO. COMPUTED IS TO BE APPORTIONED 60:40 OF WHICH 40 IS ASSESSABLE TO TAX UNDER THE ACT. IT DOES NOT PROVIDE THAT AFTER APPORTIONMENT OF THE 60% OF THE INCOME SO COMPUTED SHALL AGAIN BE REQUIRED TO BE CO MPUTED UNDER THE AGRICULTURAL INCOME TAX ACT. ON THE OTHER HAND, THIS 60% IS EXPOSED AND BECOMES ELIGIBLE TO TAX UNDER TH E AGRICULTURAL INCOME TAX ACT. WITHOUT BEING REQUIRED TO BE ASSESS ED UNDER THE SAID ACT BY REASON OF THE FICTION SO CREATED. THERE FORE, THE CESS PAID HAS RIGHTLY BEEN EXCLUDED WHILE COMPUTING THE INCOME UNDER RULE 8 OF THE TEA GROWN AND MANUFACTURED. IN ARRIVING OF THE AFORESAID CONCLUSION THE HIGH CO URT HAS REFERRED TO THE VARIOUS JUDGMENTS OF THIS COURT. WE ARE OF THE OPINION THAT THE HIGH COURT HAS RIGH TLY INTERPRETED THE SCOPE OF RULE 8 OF THE INCOME TAX RULES 1962. W E, THUS, FIND NO MERIT IN THIS APPEAL WHICH IS, ACCORDINGLY, DISMISSED. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF HONBL E SUPREME COURT, WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL RAIS ED BY THE REVENUE, HENCE, WE DISMISS THE SAME. 15. IN THE RESULT, APPEAL OF REVENUE STANDS DISMIS SED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13/0 1/2017. S D/ - (S.S.VISWANETHRA RAVI) S D/ - (WASEEM AHMED) # / JUDICIAL MEMBER $# / MEMBER ACCOUNTANT /KOLKATA ; $% DATED 13/01/2017 & ()* /PRAKASH MISHRA , . / PS %&' (' / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( ASSTT. REGISTRAR) , / ITAT, 1. / THE APPELLANT-ITO WARD-4(2), KOLKATA 2. / THE RESPONDENT-M/S HANUMAN TEXNIT INDUSTRIES LTD. 3. 4 ( ) / THE CIT(A), KOLKATA. 4. 4 / CIT 5. 56 7 8 , 8 , / DR, ITAT, KOLKATA 6. 7 9 / GUARD FILE. 5 //TRUE COPY//