DCIT, Cir-4, Kolkata, Kolkata V. M/s Assambrook Ltd., Kolkata

ITA 63/KOL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4542 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 14-09-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 13-01-2014
• Court: TRIBUNAL
• Department Lawyers: DEBASISH BANERJEE
• Section: 80HHC

Judgement Text

I.T.A. NO. 63/KOL./2014 ASSESSMENT YEAR: 2003-2004 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 63 /KOL/ 2014 ASSESSMENT YEAR: 2003-2004 DEPUTY COMMISSIONER OF INCOME TAX,................. ..................APPELLANT CIRCLE-4, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 -VS.- M/S. ASSAMBROOK LIMITED,........................... .......................RESPONDENT 1, SHAKESPEARE SARANI, KOLKATA-700 071 [PAN: AACCA 4606 M] APPEARANCES BY: SHRI RAVI TULSIYAN, CA, FOR THE ASSESSEE SHRI DEBASISH BANERJEE, JCIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : SEPTEMBER 14, 201 6 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 16, 2016 O R D E R PER SHRI P.M. JAGTAP, A.M .: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOLKATA D ATED 08.10.2013 FOR THE ASSESSMENT YEAR 2003-04 ON THE FOLLOWING GROUND S:- (1) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.59,80,000/- ON ACCOUNT OF CESS ON GREEN LEAF WIT HOUT CONSIDERING THE FACT THAT EXPENSES ON ACCOUNT OF CE SS ON GREEN LEAF IS RELATED TO 100% AGRICULTURAL OPERATIO N AND THAT AN SLP IS PENDING BEFORE THE HONBLE SUPREME C OURT AGAINST THE DECISION OF THE CALCUTTA HIGH COURT IN THE CASE OF AFT INDUSTRIES LIMITED VS.- CIT (270 ITR 1 67) IN THE LIGHT OF WHICH LD. CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. (2) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) HAS ERRED IN LAW IN ALLOWING THE CLAIM OF TH E APPELLANT U/S. 80HHC WITHOUT CONSIDERING THE FACT T HAT AN APPEAL FILED BY THE REVENUE AGAINST TREATMENT OF INTEREST INCOME AS PART OF THE COMPOSITE INCOME IN THE CASE OF VARIOUS ASSESSES ARE PENDING BEFORE THE HO NBLE HIGH COURT, WHILE PASSING THE JUDGMENT. I.T.A. NO. 63/KOL./2014 ASSESSMENT YEAR: 2003-2004 PAGE 2 OF 3 2. AT THE TIME OF HEARING BEFORE US, THE LD. REPRES ENTATIVES OF BOTH THE SIDES HAVE AGREED THAT THE ISSUE INVOLVED IN GROUND NO. 1 OF THIS APPEAL OF THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE AS SESSEE BY THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF C IT VS.- AFT INDUSTRIES LIMITED [270 ITR 167], WHEREIN IT WAS HELD THAT IN RESPECT OF COMPUTATION OF INCOME OF TEA GROWN AND MANUFACTURED, THE FICTIO N HAS BEEN CREATED UNDER WHICH BOTH THE AGRICULTURAL COMPONENT AND THE BUSINESS COMPONENT OF THE ASSESSEE WOULD BE ASSESSED TOGETHE R FOR THE PURPOSE OF COMPUTING THE INCOME UNDER THE ACT AND ONLY AFTER T HE COMPUTATION OF TOTAL INCOME, THE APPORTIONMENT IS TO BE MADE DETER MINING 60% AS AGRICULTURAL INCOME. IT WAS FURTHER HELD THAT WHEN BY FICTION THE INCOME IS COMPUTED AS AN INCOME UNDER THE ACT, ALL DEDUCTIONS AS ARE AVAILABLE BOTH FOR AGRICULTURAL COMPONENT AND FOR THE BUSINESS COM PONENT OF THE INCOME ARE TO BE ALLOWED AS A NATURAL COROLLARY AND, THERE FORE, THE ENTIRE AMOUNT PAID AS CESS UNDER THE AGRICULTURAL INCOME TAX ACT IS ELIGIBLE FOR DEDUCTION. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, EVEN THE SLP FILED BY THE DEPARTMENT AGAINST THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF AFT INDUSTRIES LIMITED (SUPRA) HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT. WE, THEREFORE, RESPECTFU LLY FOLLOW THE SAID DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT A ND UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) GIVING RELIE F TO THE ASSESSEE ON THIS ISSUE. GROUND NO. 1 OF THE REVENUES APPEAL IS ACCORDINGLY DISMISSED. 3. AS REGARDS THE ISSUE INVOLVED IN GROUND NO. 2, T HE LD. REPRESENTATIVES OF BOTH THE SIDES HAVE AGREED THAT THE SAME IS ALSO SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ACG ASSOCIATED CAPSULE S PVT. LIMITED VS.- CIT [343 ITR 89], WHEREIN IT WAS HELD THAT 90% OF N OT THE GROSS INTEREST BUT ONLY THE NET INTEREST, WHICH HAD BEEN INCLUDED IN THE PROFITS OF BUSINESS OF THE ASSESSEE AS COMPUTED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION WAS DEDUCTED UNDER CLAUSE ( 1) OF EXPLANATION (BAA) TO SECTION 80HHC FOR DETERMINING THE PROFITS OF THE BUSINESS. RESPECTFULLY FOLLOWING THE SAID DECISION OF THE HON BLE APEX COURT, WE I.T.A. NO. 63/KOL./2014 ASSESSMENT YEAR: 2003-2004 PAGE 3 OF 3 UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) G IVING RELIEF TO THE ASSESSEE ON THIS ISSUE. GROUND NO. 2 OF THE REVENUE S APPEAL IS ACCORDINGLY DISMISSED. 4. IN THE APPEAL, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 16, 2016. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT ME MBER KOLKATA, THE 16 TH DAY OF SEPTEMBER, 2016 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (2) M/S. ASSAMBROOK LIMITED, 1, SHAKESPEARE SARANI, KOLKATA-700 071 (3) COMMISSIONER OF INCOME TAX (APPEALS)-XII, KOL KATA; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.