M/s. Rani Shaver Poultry Breeding Farms Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 5829/DEL/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0023 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-04-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY
• Assessee Lawyers: P N MEHTA
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH F FF F : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 5829/DEL/2013 5829/DEL/2013 5829/DEL/2013 5829/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2010 2010 2010 2010 - -- - 11 1111 11 M/S RANI SHAVER POULTRY M/S RANI SHAVER POULTRY M/S RANI SHAVER POULTRY M/S RANI SHAVER POULTRY BREEDING FARMS PVT.LTD., BREEDING FARMS PVT.LTD., BREEDING FARMS PVT.LTD., BREEDING FARMS PVT.LTD., 3, SH 3, SH 3, SH 3, SHOPPING CENTRE, OPPING CENTRE, OPPING CENTRE, OPPING CENTRE, WEST END, WEST END, WEST END, WEST END, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 021. 110 021. 110 021. 110 021. PAN : AAACR3036Q. PAN : AAACR3036Q. PAN : AAACR3036Q. PAN : AAACR3036Q. VS. VS. VS. VS. INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, INCOME TAX OFFICER, WARD WARD WARD WARD- -- -15(1), 15(1), 15(1), 15(1), C.R. BUILDING, C.R. BUILDING, C.R. BUILDING, C.R. BUILDING, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.N. MEHTA, FCA. RESPONDENT BY : SHRI VIKRAM SAHAY, SR.DR. DATE OF HEARING : 09.04.2015 09.04.2015 09.04.2015 09.04.2015 DATE OF PRONOUNCEMENT : 06.05.2015 06.05.2015 06.05.2015 06.05.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA, VP , VP , VP , VP : :: : THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2010-1 1 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XVIII, NEW DELHI DATED 29 TH AUGUST, 2013. 2. THE GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN HOLDING THAT THE APPELLANT DID NOT CARRY OUT ANY BUSINESS ACTIVITY DURING THE YEAR. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN SUSTAINING DISALLOWANCE OF RS.6,32,536/- MADE BY THE ASSESSING OFFICER WHICH HAVE BEEN INCURRED BY THE APPELLANT FOR THE PURPOSES OF BUSINESS OF THE COMPANY. ITA-5829/DEL/2013 2 3. THAT WITHOUT PREJUDICE TO THE ABOVE EVEN OTHERWISE THE EXPENSES INCURRED BY THE APPELLANT ARE ALLOWABLE UNDER SECTION 57(III) OF THE INCOME TAX AC T AND THE COMMISSIONER (APPEALS) IS WRONG IN NOT ALLOWING THE SAME INSPITE OF THE SPECIFIC CLAIM MADE B Y THE ASSESSEE COMPANY. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DISALLOWANCE OF `6,32,536/- WAS MADE BY THE ASSESSING OFF ICER OUT OF THE EXPENSES, ALTHOUGH WERE INCURRED BY THE ASSESSEE FOR THE PURPOSE OF BUSINESS OF THE COMPANY. THE EXPENSES WERE ALLOWABLE UNDER SECTION 57(III) OF THE ACT. HE SUBMITTED THAT EVEN THOUGH THE ASSESSEE COULD NOT CONTINUE WITH ITS POULTRY FARM BUSINESS, STILL THE EXPENSES CLAIMED SHOULD BE ALLOWED AS WERE NECESSARY TO EARN THE OTHER INCOME SHOWN BY THE ASSESSEE. 4. LEARNED DR SUBMITTED THAT THE ASSESSEE WAS NOT IN THE BUSINESS OF POULTRY FARM DURING THE RELEVANT PERIOD AND, THE REFORE, THE EXPENSES HAVE BEEN RIGHTLY DISALLOWED BY THE ASSESSING OFFICER A ND THE CIT(A). HE SUBMITTED THAT IN THE EARLIER ASSESSMENT YEAR 2008-09 ALSO, THE CIT(A) HAS ALLOWED ONLY A SUM OF `1 LAKH ON AD-HOC BASIS AND THE ORDER OF LEARNED CIT(A) HAS BEEN CONFIRMED BY THE ITAT. I N THESE FACTS, HE SUBMITTED THAT THE FACTS BEING SIMILAR, THE ASSESSEE MAY NOT BE ALLOWED DEDUCTION OF EXPENSES CLAIMED, WHICH WERE NOT INCURRED FOR THE POULTRY FARM BUSINESS OF THE ASSESSEE. HE RELIED ON T HE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PER USED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). WE FIND THAT THE ASSESSEE HAS DEBITED A SUM OF `23,34,708/- AS EXPENSES AND DEPRECIATION IN ITS PROFIT AND LOSS ACCOUNT AND HAS ITSE LF DISALLOWED A SUM OF `14,62,172/- OUT OF THE TOTAL EXPENSES AND THE BALANCE AMOUNT ITA-5829/DEL/2013 3 OF `9,58,233/- WAS CLAIMED BY THE ASSESSEE. THE ASSESSEE H AS SHOWN OTHER INCOME IN THE FORM OF INTEREST AND DIVIDEND, I NTEREST ON FIXED DEPOSITS, RENT RECEIPT AND OTHER MISCELLANEOUS INCOME. THE ASSESSEE WAS HAVING OPENING STOCK OF LIVE BIRDS OF 3465 IN NUMB ER AND IN THE CLOSING STOCK AS ON THE LAST DATE OF THE ACCOUNTING YEA R I.E. 31.03.2010, LIVE BIRDS WERE NIL. IN THESE FACTS OF THE CASE, WE A RE OF THE VIEW THAT ALTHOUGH THE WHOLE OF THE EXPENSES COULD NOT BE ALLO WED TO THE ASSESSEE, BUT SOME PART OF THE EXPENSES CLAIMED BY THE ASSE SSEE HAS TO BE ALLOWED AS THE ASSESSEE HAS LIQUIDATED ITS OPENING S TOCK OF LIVE BIRDS DURING THE YEAR AND HAS SHOWN OTHER INCOME TOTAL ING TO `5,18,059/-. IN THIS VIEW OF THE MATTER, WE HOLD TH AT THE ENDS OF JUSTICE SHALL BE MET IF THE DISALLOWANCE OF `6,32,536/- CONFI RMED BY THE CIT(A) IS REDUCED TO `3,00,000/- AND THE BALANCE DISALLOWANC E IS DELETED. ACCORDINGLY, THE GROUNDS OF APPEAL OF THE ASSESSEE ARE P ARTLY ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY AL LOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 6 TH MAY, 2015. SD/- SD/- ( (( ( INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO INTURI RAMA RAO ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S RANI SHAVER POULTRY BREEDING FARMS PVT.LTD., M/S RANI SHAVER POULTRY BREEDING FARMS PVT.LTD., M/S RANI SHAVER POULTRY BREEDING FARMS PVT.LTD., M/S RANI SHAVER POULTRY BREEDING FARMS PVT.LTD., 3, SHOPPING CENTRE, WEST END, NEW DELHI 3, SHOPPING CENTRE, WEST END, NEW DELHI 3, SHOPPING CENTRE, WEST END, NEW DELHI 3, SHOPPING CENTRE, WEST END, NEW DELHI 110 021. 110 021. 110 021. 110 021. 2. RESPONDENT : INCOME INCOME INCOME INCOME TAX OFFICER, WARD TAX OFFICER, WARD TAX OFFICER, WARD TAX OFFICER, WARD- -- -15(1), 15(1), 15(1), 15(1), C.R. BUILDING, NEW DELHI. C.R. BUILDING, NEW DELHI. C.R. BUILDING, NEW DELHI. C.R. BUILDING, NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR