Kaira Dist.Co.Op.Milk Producers Union Ltd., Anand V. The ACIT.,Anand Circle, Anand

ITA 3613/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5879 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 23-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Capital asset; Depreciation; Business expenditure
• Section: 143(3); 148; 37; 10; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, ANAND CIRCLE, ANAND (APPELLANT) VS KAIRA DISTRICT CO - OP. MILK PRODUCERS UNION LTD. AMUL DAIRY ROAD, ANAND PAN:AAAAK8694F (RESPONDENT) KAIRA DIS TRICT CO - OP. MILK PRODUCERS UNION LTD. AMUL DAIRY ROAD, ANAND PAN:AAAAK8694F (APPELLANT) VS THE A CIT, ANAND CIRCLE, ANAND (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: S H RI SANJAY R. SHAH , A.R. DATE OF HEARING : 18 - 01 - 2 018 DATE OF PRONOUNCEMENT : 23 - 03 - 2 018 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS CROSS APPEAL FILED BY REVENUE AND ASSESSEE FOR A.Y. 2008 - 09 , AR ISE FROM ORDER OF THE CIT(A) - 4, VADODARA DATED 14 - 08 - 2015 , IN PROCEEDINGS UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1 961; IN SHORT THE ACT . I T A NO . 3557 / A HD/20 15 A SS ESSMENT YEAR 200 8 - 09 ITA NO. 3613/AHD/2015 ASSESSMENT YEAR 2008 - 09 I.T.A NO S . 3557 & 3613 /AHD/20 15 A.Y. 2008 - 09 PAGE NO DCIT VS. KAIRA DISTRICT CO - OP. MILK PRODUCERS UNION LTD. 2 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - ITA NO. 3557/AHD/2015 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. C.I.T. (A) ERRED IN DELETING ADDITION ON ACCOUNT OF DEPRECIATION CLAIMED ON TH E PORTION OF PLANT AND MACHINERY ACQUIRED THROUGH GRANT/SUBSIDY RECEIVED FROM NDDB UNDER 70% LOAN AND 30% GRANT SCHEME WITHOUT APPRECIATING THAT ON PLAIN READING OF EXPLANATION 10 TO SECTION 143(1) IT IS CLEAR THAT THE SAID EXPLANATION DOES NOT REFER TO AS SETS ACQUIRED AFTER 01 - 04 - 1999 OR GRANT SUBSIDY RECEIVED AFTER 01 - 04 - 1999, WHICH FINDS SUPPORT FROM THE DECISION, OF HON'BLE KARNATAK HIGH COURT IN THE CASE OF SHREE RENUKA SUGARS' ( LTD. IN I.T.A. NO. 5006/2011 C/W ITA NO. 5007/2011, VIDE ORDER DATED 31 - 08 - 2012,, AND THAT THE FACTS OF THE CASE OF SHREE RENUKA SUGARS LTD. (SUPRA) ARE IDENTICAL TO THE FACTS OF THE PRESENT CASE. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T.(A) ERRED IN DELETING ADDITION ON ACCOUNT OF DEPRECI ATION CLAIMED ON T HE PORTION OF PLANT ,AND MACHI NERY ACQUIRED THROUGH GRANT/SUBSIDY RECEIVED FROM NDDB UNDER70% LOAN AND 30% GRANT SCHEME BY RELYING ON THE JUDGMENT OF KERALA HIGH COURT IN THE CASE OF C.I.T. VS. SUN FIBER OPTICS, IGNORING THE FACT THAT THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT V. P.J. CHEMICALS LTD. (1994 210 ITR 830, WAS RENDERED ON 14 - 09 - 2014, WHICH WAS MUCH PRIOR TO THE DATE OF INTRODUCTION OF EXPLANATION 10 TO SECTION 43(1) OF THE ACT W.E.F. 01 - 04 - 1999. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T.(A) ERRED IN DELETING ADDITION, ON ACCOUNT OF DEPRECIATION CLAIMED ON THE PORTION OF PLAN T AND MACHINERY ACQUIRED THROUGH GRANT/SUBSIDY RECEIVED FROM NDDB UNDER 70% LOAN AND 30% GRANT SCHEME BY RELYING ON THE JUDGEMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF MAHESANA DISTRICT CO - OERATIVE MILK PRODUCERS UNION LTD. VS. C.I.T. WITHOUT CONSIDERING THE ASPECT THAT THE SAID DECISION OF HON'BLE GUJARAT HIGH COURT IS NOT APPLICABLE TO THE FACTS OF T HE PRESENT CASE IN AS MUCH IN THAT CASE THE A.Y. INVOLVED WAS 1978 - 79, WHEN THE EXPLANATION 10 TO SECTION 43(1) W.E.F. 01 - 04 - 1999 WAS NOT IN EXISTENCE, WHEREAS IN THE PRESENT CASE, THE ISSUE INVOLVED FOR A.Y. 2002 - 03 IS SQUARELY COVERED BY THE EXPLANATION 10 TO SECTION 43(1) OF THE ACT W.E.F. 01 - 04 - 1999. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.C.I.T. (A) WAS JUSTIFIED IN HOLDING THAT DELETING ADDITION OF RS. 36,40,842/ - ,BEING DISALLOWANCE U/S. 80P(2)(D) OF THE ACT NOTWITHSTA NDING THE FACT THAT THE INTEREST PAID BY THE ASSESSEE TO VARIOUS CO - OPERATIVE BANKS/SOCIETIES/BODIES EXCEEDED THE INCOME EARNED FROM ITS INVESTMENT WITH BANK/CO - OPERATIVE SOCIETIES NOR THE ASSESSEE COULD SUBSTANTIATE THE CLAIM THAT INTEREST BEARING FUNDS H AVE NOT BEEN INVESTED WITH CO - OPERATIVE BANK. 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. C.I.T. (A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 36,40,842/ - , BY RELYING ON THE DECISION OF HON'BLE SUPREME COURT OF INDIA IN TH E CASE OF MUNJAL SALES CORPN VS. C.I.T., LUDHIANA REPORTED IN 168 TAXMAN 43(SC) AND DECISION OF HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF C.I.T. VS. RELIANCE UTILITEIS & P OWER LTD. REPORTED IN 178 TAXMAN 135, WITHOUT APPRECIATING THE FACTS OF THE PRESEN T CASE IS DISTINGUISHABLE FROM THE FACTS OF THE SAID CASES, IN AS MUCH WHEREAS IN THE INSTANT CASE THE ISSUE PERTAINED TO DISALLOWANCE U/S. 80P(20(D) OF THE ACT., WHEREAS IN THE SAID CASES REFERRED TO BY HON'BLE SUPREME COURT AND HON'BLE BOMBAY HIGH COURT, THE ISSUE PERTAINED TO DISALLOWANCE OF DEDUCTION U/S. 36()(III) OF THE ACT. THE GROUNDS OF APPEAL NO.1 TO 3 ARE PERTAINED TO THE COMMON ISSUE, THEREFORE , ALL ARE ADJUDICATED TOGETHER AS UNDER. I.T.A NO S . 3557 & 3613 /AHD/20 15 A.Y. 2008 - 09 PAGE NO DCIT VS. KAIRA DISTRICT CO - OP. MILK PRODUCERS UNION LTD. 3 3. THE BRIEF FACT OF TH IS ISSUE IS THAT RETURN OF INCOME WA S FILED ON 30 TH SEPTEMBER, 2008 DECLARING NIL INCOME. SUBSEQUENTLY, THE CASE WAS REOPENED U/S. 147 OF THE ACT AFTER ISSUING OF NOTICE U/S. 148 OF THE ACT ON 18 TH APRIL, 2013. ON VERIFICATION OF THE STATEMENT NO.5 TO CLAUSE 14 OF TAX AUDIT REPORT U/S 44AB OF THE ACT THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED DEPRECIATION OF RS. 53 , 02 , 496/ - ON THE ASSET S WHICH WERE ACQUIRED BE FORE 01 - 04 - 1999 THROUGH 30% GRANT FROM NDDB: DAIRY - ILL RS. 31,91,296/ - KHATRAJ RS. 1 9,15,155/ - MOGAR RS. 1,96,045/ - TOTAL RS. 53,02,496/ - THE ASSESSING OFFICER HAS OBSERVED THAT W.E.F. 01 - 04 - 1999 THE EXPLANATION 1 0 WAS INTRODUCED TO SECTION 43(I ) IN RESPECT OF ACTUAL COST OF CAPITAL ASSET WHERE CENTRAL GOVERNMENT OR STATE GOVERNMENT OR OTHER AGENCIES HAD GIVEN GRANT OR SUBSIDY WHICH READ AS UNDER : - EXPLANATION 10. - WHERE A PORTION OF THE COST OF AN ASSET ACQUIRED BY THE ASSESSEE HAS BEEN MET DIRECTLY OR INDIRECTLY BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT OR ANY AUTHORITY ESTABLISHED UNDER ANY LAW OR BY ANY OTHE R PERSON, IN THE FORM OF A SUBSIDY OR GRANT OR REIMBURSEMENT (BY WHATEVER NAME CALLED), THEN, S O MUCH OF THE COST AS IS RELATAB LE TO SUCH SUBSIDY OR GRANT OR REIMBURSEMENT SHALL NOT BE INCLUDED IN THE ACTUAL COST OF THE ASSET TO THE ASSESSEE: PROVIDED THAT WHERE SUCH SUBSIDY OR GRANT OR REIMBURSEMENT IS OF SUCH NATURE THAT IT CANNOT BE DIRECTLY RELATAB LE TO THE ASSET ACQUIRED, SO MUCH OF THE AMOUNT WHICH BEARS TO THE TOTAL SUBSIDY OR REIMBURSEMENT OR GRANT THE SAME PROPORTION AS SUCH ASSET BEARS TO ALL THE ASSETS IN RESPECT OF OR WITH REFERENCE TO WHICH (HE SUBSIDY OR GRAN! OR REIMBURSEMENT IS SO RECEIVED, SHALL NOT BE INCLUDED IN THE ACTUAL COST OF THE ASSET TO THE ASSESSEE. IN VIEW OF THE ABOVE EXPLANATION 10 TO SECTION 43(1) W.E.F.1.4.1999 THE ASSESSIN G OFFICER CONCLUDED THAT FOR COMPUTING THE ACTUAL COST THE GRANT RECEIVED IS REQUIRED TO BE REDUCED FROM THE COST OF THE ASSET FOR CLAIMING DEPRECIATION. HOWEVER,THE ASSESSEE HAS CLAIMED DEPRECIATION WITHOUT REDUCING THE GRANT RECEIVED FROM NDDB. CONSEQUEN TLY, THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF DEPRECIATION TO THE EXTENT OF GRANT RECEIVED FROM THE NDDB. I.T.A NO S . 3557 & 3613 /AHD/20 15 A.Y. 2008 - 09 PAGE NO DCIT VS. KAIRA DISTRICT CO - OP. MILK PRODUCERS UNION LTD. 4 4. AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL BY OBSERVING AS UNDER: - 5.3. I HAVE CON SIDERED THE SUBMISSIONS OF THE LD. AUTHORIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFICER. I AM IN AGREEMENT THAT THE ISSUE IS COVERED IN FAVOUR OF THE APPELLANT BY THE DECISION OF ITAT, AHMEDABAD IN ASSESSEE'S OWN CASE BY THEIR ORDER DATED 05.06 .2015 IN ITA NOS.563 TO 567/AHD/2011 FOR THE A.Y. 2002 - 03, 2004 - 05, 2005 - 06, 2006 - 07 & 2007 - 08 WHEREIN IT IS HELD AS UNDER: - '5.5. THE HON'BLE KERALA HIGH COURT IN THE CASE OF CIT VS. SUN FIBRE OPTICS (P.) LTD.(SUPRA) HELD AS UNDER: - '4. EVEN THOUGH THE CI T (APPEALS) REJECTED THE APPEAL, THE 2ND APPEAL FILED BY THE ASSESSEE WAS ALLOWED BY THE TRIBUNAL THE TRIBUNAL HELD THAT SUBSIDY HAVING BEEN RECEIVED BEFORE 31/03/1998 AND DEPRECIATION WAS GRANTED FOR SUBSEQUENT YEARS BASED ON THE ACTUAL COST WITHOUT REDUC ING THE SUBSIDY AMOUNT UNDER EXPLANATION 10 TO SECTION 43(1), THE ASSESSEE IS ENTITLED TO DEPRECIATION ON THE WRITTEN DOWN VALUE FOR THE ASSESSMENT YEAR 2002 - 03. THE MAIN REASONING OF THE TRIBUNAL IS THAT THE PROVISION FOR REDUCTION OF SUBSIDY FROM COST OF MACHINERY WAS INTRODUCED BY THE ABOVE AMENDMENT ONLY WITH EFFECT FROM 01/04/1999 AND SO MUCH SO, IT DOES NOT APPLY TO INVESTMENTS MADE ANY TIME PRIOR TO THAT WHICH IN THIS CASE IS BEFORE 31/03/1998. SINCE THE TRIBUNAL ALLOWED ASSESSEE'S APPEAL, THE DEPART MENT FILED THIS APPEAL BEFORE US CHALLENGING THE FINDINGS OF THE TRIBUNAL 5. AFTER HEARING BOTH SIDES WE ARE UNABLE TO INTERFERE WITH THE ORDERS OF THE \ TRIBUNAL BECAUSE THE TRIBUNAL HAS FOLLOWED THE DECISION OF THE HONOURABLE SUPREME COURT IN THE CASE O F CIT V. P.J. CHEMICALS LTD. [1994] 210ITR 830/ '6 TAXMAN 611 . FURTHER WE DO NOT KNOW ON WHAT BASIS THE DEPARTMENT CAN INTRODUCE RETROSPECTIVITY TO THE AMENDMENT INTRODUCED WHEN THE LEGISLATURE HAS NOT DONE SO. OBVIOUSLY, THE ABOVE AMENDMENT IS PROSPECTIV E IN NATURE AND THE SAME APPLIES TO INVESTMENTS 'MADE ON PLANT AND MACHINERY AND OTHER DEPRECIABLE ASSETS AFTER 01/04/1999. SO MUCH SO, WE UPHOLD THE ORDER OF THE TRIBUNAL AND DISMISS THE APPEAL ON THIS ISSUE.' THEREFORE, IN THE LIGHT OF THE JUDGEMENT OF H ON'BLE GUJARAT HIGH COURT IN THE CASE OF MAHESANA DISTRICT CO - OPERATIVE MILK PRODUCERS UNION LTD, VS. CIT(SUPRA) AND THE JUDGEMENT OF KERALA HIGH COURT IN THE CASE OF CIT VS. SUN FIBRE OPTICS (P.) LTD. (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT THE AUTHOR ITIES BELOW WERE NOT JUSTIFIED IN EXCLUDING THE GRANT PORTION OF THE AMOUNT FROM THE ACTUAL COST. HENCE, WE HEREBY DELETE THE DISALLOWANCE AND DIRECT THE AO TO GIVE DEDUCTION ON THE ENTIRE AMOUNT. THUS, THESE GROUNDS OF THE ASSESSEE'S APPEAL ARE ALLOWED.' RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL, THIS GROUND OF APPEAL IS ALSO ALLOWED. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. IN RESPECT OF APPEAL OF REVENUE REGARDING CLAIM OF DEPRECIATION ON THE VARIOUS P LANT AND MACHINERY ACQUIRED THROUGH GRANT /SUBSIDY RECEIVED FROM NDDB UNDER 70% LOAN AND 30% GRANT SCHEME, WE OBSERVED THAT CO - ORDINATE BENCH OF ITAT AHMEDABAD HAS DECIDED THE IDENTICAL ISSUE IN THE CASE OF THE I.T.A NO S . 3557 & 3613 /AHD/20 15 A.Y. 2008 - 09 PAGE NO DCIT VS. KAIRA DISTRICT CO - OP. MILK PRODUCERS UNION LTD. 5 ASSESSEE IN THE PRECEDING ASSESSMENT YEAR VID E FOLLOWING ORDERS IN FAVOUR OF THE ASSESSEE AS BELOW. I) VIDE ITS ORDER DATED 05 - 06 - 2015 IN ITA NOS. 536 TO 567/A/2011 FOR THE A.Y. 2002 - 03, 2004 - 05,2005 - 06, 2006 - 07 & 2007 - 08 VIDE PARA 7.2 DECIDED THE ISUSE IN FAVOUR OF APPELLANT RELYING ON THE DECISION OF KERALA HIGH COURT IN THE CASE OF SUN FIBRE OPTICS (2012) 20 TAXMANN.COM 143 II) VIDE ORDER DATED 31 - 05 - 2016 IN ITA NOS. 1337/A/2013 FOR THE A.Y. 2009 - 10 VIDE PARA 11 DECIDED THE ISSUE IN FAVOR OF ASSESSEE III) VIDE ORDER DATED 29 - 06 - 2016 IN I.T.A. NOS. 3013/AHD/20 13 FOR THE A.Y. 2010 - 11 VIDE PARA 7 DECIDED THE ISSUE IN FAVOR OF ASSESSEE THEREFORE, IN VIEW OF THE ABOVE FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH ES , WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A). GROUND NO S .4 TO 5 6. ON SCRUTINY, THE ASSESSING OFFICER HAS NOTICED THAT ASSESSSEE HAS CLAIMED DEDUCTION U/S. 80P( 2) (D ) OF THE ACT FOR RS. 36 , 40 , 842/ - BEING INTEREST INCOME FROM CO - OPERATIVE SOCIETIES. THE ASSESSING OFFICER HAS NOTICED THAT IN THE P & L A/C , THE ASSESSEE HAS EAR NED TOTAL INTEREST OF RS. 2 , 60 , 17 , 776/ - AND ALSO CLAIMED INTEREST EXPENDITURE TO THE AMOUNT OF RS. 7 , 21 , 33 , 676/ - WHICH RESULTED IN NEGATIVE INTEREST EXPENDITURE OF RS. 46 , 11 , 15 , 899/ - . THE ASSESSING OFFICER HAS CONCLUDED THAT ASSESSEE WAS NOT HAVING NET INT EREST INCOME, THEREFORE, THE CLAIM OF DEDUCTION U/S. 80P(2)(D) WAS DISALLOWED . 7 . AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE BY OBSERVING AS UNDER: - 8.2. I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED AUTHORIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFICER. I AM IN AGREEMENT WITH THE AUTHORIZED REPRESENTATIVE THAT SUBSTANTIAL INTEREST FREE FUNDS WERE A AVAILABLE WITH THE APPELLANT DURING THE YEAR UNDER CONSIDERATION AS WELL AS IN PAST YEARS. THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT BASED ON PROPER APPRECIATION OF FACTS. JUDICIAL DECISIONS AS CITED BY THE LD. AUTHORIZED REPRESENTATIVE INCLUDING THAT OF JURISDICTIONAL TRIBUNAL IN THE CASE OF SABARKANTHA DIST CO - OP. MILK PRO DUCERS' UNION LTD. (ITA 2613/AHD/2012),WHERE DISALLOWANCE U/S I.T.A NO S . 3557 & 3613 /AHD/20 15 A.Y. 2008 - 09 PAGE NO DCIT VS. KAIRA DISTRICT CO - OP. MILK PRODUCERS UNION LTD. 6 80P(2)(D) WAS DELETED AND NO INTEREST WAS DEDUCTED FROM THE INTEREST RECEIVED AS THERE WERE SUFFICIENT INTEREST FREE FUNDS, SUPPORT THE CASE OF THE APPELLANT. RESPECTFULLY FOLLOWING THESE CASES, THIS GROUND OF APPEAL IS ALSO ALLOWED. 8. REGARDING THE CLAIM OF DEDUCTION U/S. 80P(2)(D) OF THE ACT OF RS. 3640842/ - T HE LD. COUNSEL HAS SUBMITTED THAT THE HON'BLE ITAT IN A SSESSEE 'S OWN CASE FOR A.Y. 1986 - 87 WHILE REJECTING THE APPEAL OF DEPARTMENT FOR DENYING THE DEDUCTION OF INTEREST U/S 80P(2)(D) HELD THAT ASSESSEE CANNOT BORROW THE MONEY FOR TEMPORARY INVESTMENT. HE HAS ALSO SUBMITTED THAT E VEN GUJARAT HIGH COURT IN A SSESSEE 'S OWN CASE WHILE DEALING WITH ISSUE OF RE - OPENING U/S. 148 FOR DI SALLOWING THE DEDUCTION OF INTEREST OBSERVED THAT AO IS CONSCIOUS ABOUT THE CLAIM MADE BY THE ASSESSEE AND THE POSITION OF INTEREST EARNED ON INVESTMENT, VIS - A - VIS INTEREST OR COMMISSION PAID BY IT, AND HAS BEEN TREATING THE INVESTMENT INCOME HAVING NO RE LATION TO THE INTEREST PAID IN AS MUCH AS IT WAS CONSISTENT FINDING THAT NO INTEREST HAS BEEN PAID ON BORROWINGS FOR EARNING INTEREST ON INVESTMENT. THE SAME HAS BEEN REPORTED IN 87 TAXMAN 144. IN VIEW OF THE ABOVE, IN EARLIER YEARS I.E. FROM A.Y. 1986 - 87 IT IS CONSISTENTLY ACCEPTED BY THE AO, CIT(A), ITAT AND HIGH COURT IN ASSESSEE'S OWN CASE THAT ASSESSEE HAS NEVER BORROWED THE MONEY FOR MAKING THE INVESTMENT AS ALWAYS ASSESSEE HAS INTEREST FREE FUNDS MORE THAN INVESTMENT. IN A.Y. 91 - 92, SECTION 80AB HAS ALSO BEEN CONSIDERED WHILE ALLOWING THE DEDUCTION U/S. 80P(2)(D) OF THE ACT. IN VIEW OF THESE FACTS AND FINDINGS , WE ARE INCLINED WITH THE FINDINGS OF THE LD.CIT(A). ACCORDINGLY, BOTH THE GROUNDS OF APPEAL OF THE REVENUE ON THIS ISSUE STANDS DISMISSED. ITA NO. 3613/AHD/2015 9 . THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1. THE ORDER PASSED BY THE LEARNED CIT(A) IS ERRONEOUS AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS AND THEREFORE REQUIRES TO BE QUASHED AS BAD IN LAW. IT IS SUBMITTED THAT IT BE SO DONE NOW. 2. THE LEARNED CIT(A) DID NOT ADJUDICATE THE GROUND BEFORE HIM AGAINST THE RE - OPENING OF ASSESSMENT U/S. 147 OF THE ACT. IT IS SUBMITTED THAT THE PROVISIONS OF SECTION 147 ARE WRONGLY INVOKED BY THE LEARNED AO AND CIT(A) HAS ERRED IN NOT ADJUDICATING THIS GROUND. IT IS SUBMITTED THAT IT BE SO HELD NOW AND THE ENTIRE REASSESSMENT HELD TO BE INVALID AND I.T.A NO S . 3557 & 3613 /AHD/20 15 A.Y. 2008 - 09 PAGE NO DCIT VS. KAIRA DISTRICT CO - OP. MILK PRODUCERS UNION LTD. 7 BE QUASHED AS NECESSARY INGREDIENTS FOR INVOKING PROVISIONS OF SECTION 147 ARE NOT AVAILABLE IN THE PRESENT CASE. 3. THE LEARNED CIT (A) ERRED IN CONFIRMING DISALLOWANCE OF RS.5,00,00,000/ - (RUPEES FIVE CRORE) BEING CONTRIBUTION TO ARDA (AMUL RESEARCH DEVELOPMENT ASSOCIATION) FOR DAIRY DEVELOPMENT(DD)/RESEARCH EXPENSES ON THE GROUND THAT SAME IS NOT ALLOWABLE AS BUSINESS EXPENDITURE. 3 .1 THE LEARNED CIT(A) OUGHT TO HAVE ALLOWED CONTRIBUTION MADE TO ARDA AS EXPENSES U/S 37 AS SUCH CONTRIBUTION TO ARDA IS FOR THE PURPOSE OF THE BUSINESS OF THE APPELLANT. IT IS SUBMITTED THAT IT BE SO HELD NOW AND CONTRIBUTION MADE TO ARDA AS CLAIMED BY TH E APPELLANT BE ALLOWED AS DEDUCTION. 4. THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY AO WITH RESPECT TO THE AGRICULTURE INCOME OF RS.2,40,645/ - EARNED ON ACCOUNT OF SALE OF WOOD AND GRASS, ETC. OF OPEN AREA OF COMPOUND OF APPELLANT ON THE GROUND THAT APPELLANT HAS FAILED TO ESTABLISH THAT SUCH TREES OR GRASS WERE GROWN ON ACCOUNT OF AGRICULTURAL ACTIVITY. IT BE SO HELD NOW. 4.1 THE LEARNED CIT(A) FURTHER ERRED IN CONFIRMING THE ACTION OF THE AO FOR TREATING THE AGRICULTURAL INCOME OF RS.2,40,645/ - AS INCOME FROM OTHER SOURCES IN THE HANDS OF THE APPELLANT. IT BE SO HELD NOW. 10 . GROUND NO. 1 IS GENERAL AND DOES NOT REQUIRE ANY ADJUDICATION. GROUND NO. 2 REGARDING REOPENING OF ASSESSMENT U/S. 147 WAS NOT PRESSED, THEREFOR E , THE SAME IS DISMISSED. GROUND NO. 3 AND 3.1 11 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON VERIFICATION OF DAIRY DEVELOPMENT AND RESEARCH EXPENSES GENERAL LEDGER A/C THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED EXPENDITURE OF RS. 5 C RORES FOR DAIRY DEVELOPMENT AND RESEARCH EXPENSES . THE ASSESSING OFFICER HAS FURTHER NOTICED THAT ON THE SIMILAR FACTS SUCH EXPENSES WERE DISALLOWED FOR ASSESSMENT YEAR 2002 - 03 TO ASSESSMENT YEAR 2010 - 11. HE HAS OBSERVED THAT THERE WAS NO MATERIAL CHANGE I N THE FACTS AND CIRCUMSTANCES OF THE CASE EVEN DURING THE YEAR CONSIDERATION. THEREFORE, THE CLAIM OF THE ASSESEE THAT RESEARCH EXPENSES WERE ELIGIBLE FOR DEDUCTION WAS DISALLOWED. 12 . AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) . THE LD. CIT( A) HAS DISMISSED THE GROUND OF APPEAL BY OBSERVING AS UNDER: - I.T.A NO S . 3557 & 3613 /AHD/20 15 A.Y. 2008 - 09 PAGE NO DCIT VS. KAIRA DISTRICT CO - OP. MILK PRODUCERS UNION LTD. 8 4.2. I HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED AUTHORIZED REPRESENTATIVE AND THE ORDER OF THE ASSESSING OFFICER. LD. AUTHORIZED REPRESENTATIVE HAS ADMITTED THAT THE ISSUE IS COVERED AGAI NST THE APPELLANT BY THE ORDER OF HON'BLE ITAT, AHMEDABAD IN ITA NOS.563 TO 567/AHD/2011 FOR THE A.Y. 2002 - 03, 2004 - 05, 2005 - 06, 2006 - 07 & 2007 - 08. IT HAS BEEN HELD IN PARA 7.2 IN THE ORDER DATED 05.06.2015 AS UNDER : - '7.2. IN THE CASE IN HAND, UNDISPUTED LY THE ASSESSEE HAS MADE CONTRIBUTION FOR RESEARCH, THEREFORE SUCH PAYMENTS WOULD FALL UNDER SECTION 35 OF THE ACT AND FOR CLAIMING DEDUCTION U/S.35 OF THE ACT, THE ASSOCIATION IS REQUIRED APPROVED IN ACCORDANCE WITH THE GUIDELINES, IN THE MANNER AND SUBJE CT TO SUCH CONDITIONS AS MAY BE PRESCRIBED. NO MATERIAL IS PLACED ON RECORD THAT THE ASSOCIATION IS APPROVED IN THE MANNER PRESCRIBED. UNDER THESE FACTS, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF LD.CIT(A),SAME IS HEREBY UPHELD. THUS, THESE GROUNDS OFASS ESSEE'S APPEAL IS REJECTED.' SINCE, THE ISSUE HAS BEEN DECIDED BY THE TRIBUNAL AGAINST THE ASSESSEE, THIS ADDITION IS UPHELD AND THE GROUND OF ASSESSEE IS DISMISSED. 13. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED THE MATERIAL ON RECORD CAREFULLY. W E HAVE NOTICED THAT THE COORDINATE BENCHES OF THE ITAT HA VE DECIDED THE IDENTICAL ISSUE IN FAVOUR OF REVENUE IN THE PRECEDING ASSESSMENT YEAR IN THE CASE OF THE ASSESSEE ITSELF. THESE DE C I S ION S OF THE COORDINATE BENCHES VIDE WHICH THE ISSUE WAS DECIDED AGA INST THE ASSESSEE ARE AS UNDER: - (1)VIDE ITS ORDER DATED 05 - 06 - 2015 IN I.T.A. NOS. 563 TO 567/A/2011 FOR THE A.Y. 2002 - 03, 200405. 2005 - 06, 2006 - 07 & 2007 - 08 VIDE PARA 7.1 & 7.2 DECIDED THE ISSUE IN FAVOR OF REVENUE. (2) VIDE ORDER DATED 31 - 05 - 2016 IN I .T.A. NOS. 1337/A/2013 FOR THE A.Y. 2009 - 10 VIDE PARA 12 DECIDED THE ISSUE IN FAVOR OF REVENUE. (3) VIDE ORDER DATED 29 - 09 - 2016 IN I.T.A. NOS. 3031/A/2013 FOR THE A.Y. 2010 - 11 VIDE PARA 6 DECIDED THE ISSUE IN FAVOR OF REVENUE. RESPECTFULLY, FOLLOWING TH E DECISION OF THE COORDINATE BENCHES , WE DISMISS THE APPEAL OF THE ASSESEE ON THIS ISSUE. GROUND OF APPEAL 4 TO 4.1 REGARDING D ISALLOWANCE OF AGRICULTURAL INCOME OF RS. 2 , 40 , 645/ - 14 . ON SCRUTINY, THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS SHOW N A GRICULTURAL INCOME OF RS. 240645 / - . ON VERIFICATION, THE ASSESSING OFFICER HAS NOTICED THAT ASSESSEE HAS NOT SUBMITTED DETAIL OF ANY EXPENDITURE INCURRED FOR EARNING AGRICULTURAL INCOME. HOWEVER, TH E ASSESSEE SUBMITTED THAT AGRICULTURAL INCOME WAS DER IVED FROM SALE OF WOOD GRASS FROM VARIOUS PLANTS. THE ASSESSING I.T.A NO S . 3557 & 3613 /AHD/20 15 A.Y. 2008 - 09 PAGE NO DCIT VS. KAIRA DISTRICT CO - OP. MILK PRODUCERS UNION LTD. 9 OFFICER HAS DISALLOWED THE CLAIM OF AGRICULTURAL INCOME ON THE GROUND THAT NO EVIDENCE IN RESPECT OF AGRICULTURAL ACTIVITIES CARRIED O UT , SALE BILLS OF AGRICULTURE PRODUCE AND EVIDENCES OF A GRICULTURE EXPENSES WERE FURNISHED. 15 . AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE BY STATING THAT IDENTICAL GROUND OF APPEAL WAS DECIDED AGAINST THE ASSESSEE IN ASSESSMENT YEAR 2010 - 11 . 16. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. WE FIND THAT THE COORDINATE BENCH OF THE ITAT IN THE CASE OF THE ASSESSEE ON SIMILAR FACTS AND CIRCUMSTANCES HAS DECIDED IN THE CASE OF THE ASS ESSEE ITSELF VIDE ITA NO.3031/A/2013 FOR ASSESSMENT YEAR 2010 - 11 IN FAVOUR OF REVENUE. ACCORDINGLY THE APPEAL OF THE ASSESSEE ON THIS ISSUE IS DISMISSED. 17 . IN THE RESULT , ITA 3557 /AHD/2015 FILED BY REVENUE AND ITA 3613 /AHD/2015 FILED BY ASSESSEE BOT H ARE DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 23 - 03 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 23 /03 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,