M/s Eagal Seeds & Biotech Limited, Indore V. The ACIT, 2(1), Indore

ITA 752/Ind/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7155 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 17-09-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SHALINI MEHTA A RS
• Keywords: Depreciation
• Section: 143(3); 14A; 80IA

Judgement Text

[ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.752/IND/2018 ASSESSMENT YEAR: 2012-13 EAGLE SEEDS & BIOTECH L TD. 117, SILVER SANCHORA CASTLE 7 RNT MARG INDORE / VS. ACIT - 2(1) INDORE ( APPELLANT ) ( REVENUE ) P.A. NO. AAACE8528L APPELLANT BY SHRI AJAY TULSIYAN & SMT. SHALINI MEHTA, A.RS RESPONDENT BY SHRI RAJIV JAIN, SR.D.R. DATE OF HEARING: 15.10.2019 DATE OF PRONOUNCEMENT: 22.10.2019 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE ASSESSEE AGAINST ORDER OF THE LD. CIT(A)-1 DATED 20.7.2018 PERTAINING TO THE ASSESSM ENT [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 2 YEAR 2012-13. THE ASSESSEE HAS RAISED FOLLOWING GROUND S OF APPEAL: 1. THAT THE LD. CIT(A) ERRED IN NOT ALLOWING THE CLAIM OF DEDUCTION MADE UNDER SECTION 80IA IN RESPECT OF THE PROFITS OF RS. 30,60,276/- DERIVED FROM THE ELIGIBLE POWER GENERATION BUSINESS THROUGH WIND MILL UNIT OF THE APPELLANT. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE CLAIM OF DEDUCTION HAVING BEEN MADE DU RING THE COURSE OF ASSESSMENT PROCEEDINGS IS LEGALLY ALLOWABLE TO T HE APPELLANT, WHICH HAS ALSO BEEN ALLOWED IN SUBSEQUENT YEARS, IS PRAYED TO BE NOW ALLOWED. 2. THAT THE LD. CIT(A) ERRED IN UPHOLDING THE ACTION O F A.O. IN DISALLOWING THE FOLLOWING EXPENSES ON ADHOC BASIS. I. RS.50,000/- OUT OF EXPENSES INCURRED ON ACCOUNT OF PROCESSING EXPENSES. II. RS.50,000/- OUT OF EXPENSES INCURRED ON ACCOUNT OF POSTAGE, TELEGRAM AND TELEPHONE EXPENSES. III. RS.50,000/- OUT OF EXPENSES INCURRED ON ACCOUNT OF GENERAL EXPENSES. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE ABOVE ADHOC DISALLOWANCES MADE WITHOUT POINTING OUT ANY DEFECT IN THE CLAIM OF THE APPELLANT, ARE WRONG AND ARE PRAYED TO BE DELETED. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, A MEND, MODIFY, SUBSTITUTE, DELETE AND/OR RESCIND ALL OR ANY OF THE GROUNDS OF APPEAL ON OR BEFORE FINAL HEARING, IF NECESSITY SO ARISES. 2. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT CASE OF THE ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESS MENT AND THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) WAS FRAMED VIDE ORDER [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 3 DATED 10.3.2015. WHILE FRAMING THE ASSESSMENT, THE A. O. MADE ADDITION ON ACCOUNT OF DISALLOWANCE OF EXCESSIVE DEPRECIATION OF RS.3,93,876/-. THE A.O. ALSO MADE DISALLOWANCE BY INVOKING PROVISIONS OF SECTION 14A OF THE ACT OF RS.1,058/-. THE A.O. FURTHER MADE ADHOC DISALLOWANCE OF RS.1,50,000/-. THUS, ASSESSED INCOME AT RS.5,47,99,199/- AGAINST THE INCOME DECLARED IN THE TA X RETURN AT RS.5,42,54,265/-. FURTHER, THE A.O. DID N OT ENTERTAIN CLAIM OF DEDUCTION U/S 80IA OF THE ACT. AG GRIEVED AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, DISMISSED THE APPEAL, THEREBY SUSTAINED THE FINDING OF THE A.O. AGGRIEVED AGAINST THE ORDER OF THE LD. CIT(A), ASSESSEE IS IN PRESENT APPEAL. 3. GROUND NO.1 OF THE APPEAL IS AGAINST REJECTING CLAIM OF DEDUCTION U/S 80IA OF THE ACT AS MADE DURING THE ASSESSMENT PROCEEDINGS. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SYNOPSIS. LD. COUNSEL FURTHER SUBMITTED THAT IN THE SUBSEQUENT YEARS, CLAIM HAS BEEN DULY ALLOWED BY THE REVENUE AUTHORITIES. THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED AS UNDER: [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 4 [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 5 [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 6 [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 7 [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 8 [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 9 [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 10 4. ON THE CONTRARY, LD. D.R. OPPOSED THESE SUBMISSIO NS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. T HE LD. D.R. SUBMITTED THAT ASSESSEE HAS NOT CLAIMED IN THE RET URN OF INCOME. THEREFORE, THE CLAIM MADE DURING THE COU RSE OF ASSESSMENT WOULD NOT BE ADMISSIBLE AND HENCE THE AUTHORITIES BELOW HAVE RIGHTLY REJECTED THE SAME. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. UNDISPUTEDLY, THE CLAIM OF DEDUCTION U/S 80IA OF THE ACT HAS BEEN ALLOWED IN THE SUBSEQUENT YEARS. LD. CIT(A) REJECTED THE CLAIM ON TH E [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 11 BASIS THAT A.O. HAS NOT MADE ANY DISALLOWANCE. THE ASSESSEE HIMSELF WHILE FILING THE RETURN OF INCOME O FFERED THE SAME FOR TAX. THE ASSESSEE HAS RELIED UPON VARIOUS CASE LAWS. THE JUDGEMENT OF THE HON'BLE SUPREME COU IRT RENDERED IN THE CASE OF CIT VS. MAHALAKSHMI SUGAR MILLS LTD. 58 CTR 138 TO BUTTRESS THE CONTENTION THAT IT I S THE DUTY OF THE ASSESSING AUTHORITY TO DETERMINE THE TRUE FIGURE OF THE TAXABLE INCOME AND CONSEQUENTIAL TAX LIABILITY. FURTHER RELIANCE IS PLACED UPON DECISION OF THE COORD INATE BENCHES OF THIS TRIBUNAL RENDERED IN THE CASE OF DCIT VS. LAB INDIA INSTRUMENTS PVT. LTD. 93 ITD 0120. WE DO N OT AGREE WITH THE REASONING GIVEN BY THE LD. CIT(A) THAT THE ASSESSEE HIMSELF HAD OFFERED THE IMPUGNED CLAIM OF DEDUCTION FOR TAXATION IN THE LIGHT OF THE JUDGEMENT OF THE HON'BLE APEX COURT RENDERED IN THE CASE OF CIT VS. MAHALAKSHMI SUGAR MILLS LTD. (SUPRA). THE LD. CIT(A) OUGHT TO HAVE EXAMINED THE ISSUE OF TAXABILITY IF THE [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 12 AMOUNT WAS NOT TAXABLE BY OFFERING THE SAME WOULD NOT CLOSE THE DOORS FOR THE ASSESSEE TO CLAIM DEDUCTION I F SUBSEQUENTLY IT IS REALISED THAT THE ASSESSEE WAS ENTITL ED FOR DEDUCTION U/S 80IA OF THE ACT. WE THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES RESTORE THE ISSUE OF DEDUCTION TO THE FILE OF THE A .O. TO VERIFY THE CORRECTNESS OF THE CLAIM IF IT IS FOUND THAT ASSES SEE HAS RIGHTLY CLAIMED DEDUCTION U/S 80IA OF THE ACT AND HAS BEEN ALLOWED IN SUBSEQUENT YEARS. UNDER THE IDENTICAL FACTS, THE ASSESSING OFFICER WOULD ALLOW DEDUCTION AS CLAIMED BY T HE ASSESSEE U/S 80IA OF THE ACT. THIS GROUND OF THE ASS ESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 6. GROUND NO.2 IS AGAINST DISALLOWANCE OF THE EXPENSES ON ADHOC BASIS AMOUNTING TO RS.1,50,000/-. LD. COUNS EL FOR THE ASSESSEE HAS REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SYNOPSIS. THE SUBMISSIONS OF THE ASSESS EE ARE AS UNDER: [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 13 [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 14 [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 15 [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 16 7. LD. D.R. OPPOSED THESE SUBMISSIONS. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE A.O. DISALLOWED THIS EXPENDITURE ON ADHOC BASIS ON THE BASIS THAT BILLS AND VOUCHERS AND SUPPORTING DOCUMENTS WERE NOT FOUND PRO PER AND WERE NOT MADE UNDER THE HEAD OF THESE EXPENSES. T HE LD. CIT(A) CONFIRMED THIS ADDITION BY OBSERVING AS UN DER: 4.2 THE A.O. MADE THE ADDITION ON THE GROUND THAT S UPPORTING BILLS AND VOUCHERS WERE NOT FOUND PROPER. IT IS OBLIGATOR Y ON THE PART OF THE APPELLANT TO MAINTAIN PROPER BILLS AND VOUCHERS AND TO PRODUCE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. SINCE , THE BILLS AND VOUCHERS ARE NOT PROPERLY MAINTAINED, THE A.O. IS J USTIFIED IN MAKING THE ADDITION. THEREFORE, THE ADDITION MADE BY THE A.O. AMOUNTING TO RS.1,50,000/- IS CONFIRMED . THEREFORE, THE APPEAL ON THIS GROUND IS DISMISSED. [ITA NO.752/IND/2018] [EAGLE SEEDS & BIOTECH LTD., INDORE] 17 9. WE FIND MERIT INTO THE CONTENTIONS OF THE LD. CO UNSEL FOR THE ASSESSEE THAT THERE IS A SWEEPING OBSERVATION B Y THE AUTHORITIES BELOW. NO SPECIFIC EXPENSES HAVE BEEN P OINTED OUT TO DEMONSTRATE THE PARTICULAR EXPENDITURE WAS NOT SUPPORTED WITH EVIDENCE. THEREFORE, WE DIRECT THE A.O. TO DELETE THIS ADDITION. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22 . 10.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 22/10/2019 VG/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE