Income tax Officer,Ward-3, Nagpur V. The Akot Ginning & Pressing Factory Ltd,

ITA 341/NAG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3936 (ITAT-NAGPUR)
• Duration Of Justice: 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 06-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHARADA NICHHAL ACIT
• Assessee Lawyers: S G GANDHI
• Keywords: Rule of consistency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR E-BENCH, NAGPUR (THROUGH VIDEO CONFERENCE AT MUMBAI) BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO.341/NAG/2012 ASSESSMENT YEAR: 2007-2008 THE INCOME TAX OFFICER, WARD-3, AAYAKAR BHAVAN, MURTIZAPUR ROAD, AKOLA, NAGPUR - 444 001. VS THE AKOT GINNING & PRESSING FACTORY LTD., ANJANGAON RAOD, AKOT 444 101. PAN:AAAAT 0874 G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHARADA NICHHAL, ACIT RESPONDENT BY : SHRI S.G. GANDHI DATE OF HEARING: 13.3.2013 DATE OF ORDER: 5.4.2013 O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 6.8.2012 IS AGA INST THE ORDER OF CIT (A)- I, NAGPUR DATED 31.5.2012 FOR THE ASSESSMENT YEAR 20 07-2008. 2. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROU NDS WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD CIT (A) ERRED IN HOLDING THAT ASSESSEE WAS ENTITLED TO DEDUCTION U/S 80P(2)(E) OF THE INCOME TAX ACT, 1961 IN RESPECT OF ALLEGED RENTAL INCOME COMPUTED AT 50% IN RESPECT OF GINNING AND PRESSING CHARGES RECE IVED BY THE ASSESSEE DURING THE YEAR. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD CIT (A) ERRED IN IGNORING THE RATIO LAID DOWN BY TH E GUJARAT HIGH COURT IN THE CASE OF SURAT VANKAR SAHAKARI SANGH LTD. VS. CIT [1 971] 79 ITR 722 AND APPROVED BY THE SUPREME COURT IN THE CASE OF UDAIPU R SAHAKARI UPBHOKTA THOK BHANDAR LTD VS. CIT [2009] 182 TAXMAN 287. 3. AT THE OUTSET, SHRI S.G. GANDHI, LD COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THE CONTENTS OF PARA 5 AND 6 OF THE CIT (A) AND MENTIONED THAT THE CIT (A) DECIDED THIS ISSUE BY GRANTING RELIEF TO THE ASSESS EE CONSIDERING THE RULE OF CONSISTENCY AND DECISION IN THE ASSESSEES OWN CAS E FOR THE AY 2003-2004. IN THIS REGARD, LD COUNSEL MENTIONED THAT THE ITAT HAS ADJU DICATED THE SIMILAR ISSUE IN 2 ASSESSEES OWN CASE FOR THE AY 2003-04 AND PARA 6 O F THE SAID ORDER DATED 23.1.2013 IS RELEVANT IN THIS REGARD. 4. ON THE OTHER HAND, LD DR RELIED ON THE ORDER OF THE AO. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE C ONTENTS OF PARA 5 AND 6 OF THE IMPUGNED ORDER WHICH READS AS FOLLOWS: 5. I HAVE CAREFULLY CONSIDERED THE ISSUE BEFORE ME. THE MAIN CONTENTION OF THE APPELLANT IS THAT ALTHOUGH IT RECEIVED GINNING AND PRESSING CHARGES IT IS ALSO INCLUDED A COMPONENT OF GODOWN CHARGES. THE DECISI ON OF THE HONBLE ITAT IN THE CASE OF ITO VS. MANGRUPIR BLOCK GINNING & PRESS ING CO-OP, FACTORY LTD. (ITA NO.226/NAG/86) DATED 22.1.1993 SIMILAR FACTS HAVE B EEN OBTAINED. EVEN IN THIS CASE THE ASSESSEE WAS ONLY THE PART IN RECEIPT OF G INNING AND PRESSING CHARGES AND THERE WAS NO EXPLICIT AMOUNT OF COMMISSION. AG REEMENTS HAVE BEEN ENTERED WITH MAHARASHTRA STATE COOP. MARKETING FEDE RATION LTD. AS IT WAS A GOVERNMENT BODY. WITH OTHER PARTIES NO SUCH FORMAL AGREEMENT WAS ENTERED INTO. HOWEVER AS PER THE CUSTOMARY PRACTICE APPELL ANT HAS PROVIDED FACILITIES FOR STORAGE OF RAW COTTON AND SUBSEQUENT GINNING AND PR ESSING COTTON. AS THIS IS AN INTEGRAL PART OF THE GINNING AND PRESSING, THIS REQUIRED TO BE DONE AS THE TIMING INVOLVED IN THE ENTIRE PROCESS FROM BRINGING RAW MATERIAL TO THE FACTORY AND LIFTING THE FINISHED MATERIAL IS QUITE CONSIDER ABLE. 6. THISD ISSUE HAS ALSO BEEN CONSIDERED BY ME IN OR DER NO.CIT(A)- I/638/08-09 DATED 7.9.2011 FOR AY 2003-04. FOLLOWI NG THE AFORESAID FINDINGS, I HOLD THAT THE APPORTIONMENT OF RS. 5,25,450/- AS GODOWN CHARGES OUT OF GINNING AND PRESSING CHARGES IS IN ORDER. 6. WE HAVE ALSO PERUSED THE PARA 6 OF THE ORDER OF THE TRIBUNAL DATED 23.1.2013 WHICH IS REPRODUCED AS UNDER: 6. GROUND NO.3 IS ABOUT DEDUCTION ALLOWED U/S 80P(2 )(E) OF THE ACT IN RESPECT OF ALLEGED RENTAL INCOME. FAA HAS STATED T HAT ISSUE OF ENTITLEMENT OF 80P DEDUCTION @ 50% HAS BEEN DECIDED IN FAVOUR OF T HE ASSESSEE BY THE ORDER OF THE THEN FAA FOR THE AY 1991-92 FAA HAS CL EARLY MENTIONED THAT ORDER OF THE THEN FAA WAS NOT CHALLENGED BEFORE THE TRIBUNAL AND THAT DEPARTMENT WAS FOLLOWING THE SAME IN THE SUBSEQUENT AYS. IN OUR OPINION, CONSIDERING THESE FACTS, ORDER OF THE AO IS AS PER THE PROVISIONS OF THE LAW AND NEEDS NO INTERFERENCE FROM OUR SIDE. GROUND NO.3 I S DECIDED AGAINST THE AO. 7. FROM THE READING OF BOTH THE EXTRACTS NARRATED A BOVE, WE FIND THAT THE GROUNDS RAISED BY THE REVENUE ARE REQUIRED TO BE DI SMISSED. ACCORDINGLY, WE DISMISS THE REVENUES GROUNDS. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED . 3 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF APRIL, 2013. SD/- SD/- (R.K. GUPTA) (D. KARUNAKAR A RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 05.04.2013 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR NAGPUR, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI