Chitalkar Milk Products Pvt. Ltd., Ahmednagar V. Assistant Commissioner of Income-tax,

ITA 764/PUN/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7728 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-06-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 20-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Assessee Lawyers: N O N E
• Keywords: Capital receipt
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 764 /P U N/201 6 / ASSESSMENT YEAR : 20 1 1 - 12 CHITALKAR MILK PRODUCTS PVT. LTD., A/P. DEULGAON SIDDHI, TAL. - NAGAR, DISTT. - AHMEDNAGAR PAN : AACCC7753M ....... / APPELLANT / V/S. ASSISTANT COMMISSIONER OF INCOME TAX, AHMEDNAGAR CIRCLE, AHMEDNAGAR / RESPONDENT ASSESSEE BY : N O N E REVENUE BY : SHRI MUKESH JHA / DATE OF HEARING : 2 6 - 06 - 201 8 / DATE OF PRONOUNCEMENT : 27 - 0 6 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 2, PUNE DATED 02 - 12 - 2015 FOR THE ASSESSMENT YEAR 2011 - 12. 2 ITA NO . 764/PUN/2016, A.Y. 2011 - 12 2. THE NOTICE OF APPEAL WAS FIRST ISSUED TO THE ASSESSEE THROUGH RPAD ON 21 - 12 - 2017 FOR 29 - 01 - 2018. ON THE SAID DAT E THE BENCH DID NOT FUNCTION AND THE APPEAL WAS ADJOURNED TO 11 - 04 - 2018. ON 11 - 04 - 2018 NONE APPEARED ON BEHALF OF THE ASSESSEE , HENCE, THE APPEAL WAS ADJOURNED TO 26 - 06 - 2018 . A FRESH NOTICE WAS ISSUED TO THE ASSESSEE ON 12 - 04 - 2018 FOR 26 - 06 - 2018. THE NO TICE OF APPEAL WAS DULY SERVED AS IS EVIDENT FROM THE ACKNOWLEDGMENT CARD AVAILABLE ON RECORD. ON 26 - 06 - 2018 DESPITE SERVICE OF NOTICE NONE HAS APPEARED ON BEHALF OF THE ASSESSEE NOR ANY LETTER SEEKING ADJOURNMENT HAS BEEN FILED BY THE ASSESSEE. IT APPEA RS THAT THE ASSESSEE IS NOT KEEN TO PURSUE THE APPEAL. IN SUCH CIRCUMSTANCES, WE PROCEED TO DECIDE THE APPEAL WITH THE ASSISTANCE OF LD. DR AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 3 . THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE : THE ASSESSEE IS ENGAGED IN THE BUSINESS OF COLLECTING MILK FROM LOCAL FARMERS AND SELL ING THE SAME TO M/S. PARAG MILK PRODUCTS LTD. THE ASSESSEE IS ALSO PROCESSING THE MILK FOR SALE IN RETAIL . THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSE SSMENT YEAR ON 21 - 09 - 2009 DECLARING LOSS OF RS. 29,17,325/ - . A SURVEY ACTION U/S. 133A WAS CARRIED OUT IN THE CASE OF ASSESSEE ON 04 - 02 - 2011. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS RECEIV ED SUBSIDY FROM NABARD AMOUNTING TO RS.28,06,200/ - IN THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. THE ASSESSEE TREATED THE SUBSIDY AS CAPITAL RECEIPT. THE ASSESSING OFFICER HELD THE SUBSIDY AS REVENUE IN NATURE AND ADDED THE SAME IN THE INCO ME RETURNED BY THE ASSESSEE. 3 ITA NO . 764/PUN/2016, A.Y. 2011 - 12 AGGRIEVED BY THE ASSESSMENT ORDER DATED 28 - 10 - 2013, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) BY PLACING RELIANCE ON THE DECISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF SAHNEY STEEL & PRESS WORKS LTD. ETC. ETC. VS. COMMISSIONER OF INCOME TAX REPORTED AS 228 ITR 253 UPHELD THE FINDINGS OF ASSESSING OFFICER AND DISMISSED THE APPEAL OF ASSE SSEE. NOW, THE ASSESSEE IS IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ON FOLLOWING GROUNDS : 1. THE LEARNED CIT (APPEALS), PUNE HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION MADE BY THE AO AMOUNTING TO RS. 28,06,200 / - TO THE RETURNED INCOME OF THE APPELLANT. 2. THE LEARNED CIT (APPEALS), PUNE HAS ERRED ON FACTS AND IN LAW THAT SUBSIDY RECEIVED IS REVENUE IN NATURE AND NOT CAPITAL IN NATURE, AS CLAIMED BY THE APPELLANT. 3. THE APPELLANT CRA VES LEAVE TO ADD, DELETE ANY GROUNDS OF APPEAL OR TO PLACE FURTHER FACTS AND EVIDENCE IN SUPPORT OF ITS CLAIM, CONTENTION BEFORE OR DURING THE COURSE OF HEARING OF APPEAL. 4. SHRI MUKESH JHA REPRESENTING THE DEPARTMENT SUBMITTED THAT THE ASSESSEE HAS FAILED TO FURNISH COMPLETE DETAILS OF SUBSIDY I.E. OBJECT OF SCHEME, NATURE, BENEFIT CONFERRED ETC. EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE FIRST APPELLATE AUTHORITY. DU RING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ONLY SUBMITTED THAT THE SUBSIDY AMOUNTS HAS BEEN CREDITED TO THE RESPECTIVE ASSET ACCOUNTS ON PROPORTIONATE BASIS AND HENCE THE SUBSIDY IS CAPITAL IN NATURE. DURING FIRST APPELLATE PROCEEDINGS , THE COMMISS IONER OF INCOME TAX (APPEALS) SPECIFICALLY ASKED THE ASSESSEE TO 4 ITA NO . 764/PUN/2016, A.Y. 2011 - 12 FURNISH THE COMPLETE DETAILS OF SUBSIDY RECEI VED, COPY OF APPROVAL AND COPY OF CORRESPONDENCE AND AGREEMENTS AND THE TERMS AND CONDITIONS OF THE SUBSIDY. HOWEVER, THE ASSESSEE HAS FAILED TO FURNISH REQUISITE DOCUMENTS IN SUPPORT OF HIS CONTENTIONS. THE COMMISSIONER OF INCOME TAX (APPEALS) IN THE ABSENCE OF ANY COGENT EVIDENCE TO SUBSTANTIATE THE SUBSIDY RECEIVED BY THE ASSESSEE AS CAPITAL RECEIPT HAS RIGHTLY UPHELD THE FINDINGS OF ASSESSING OFFICER IN TREATING THE SUBSIDY AS REVENUE IN NATURE . 5. W E HAVE HEARD THE SUBMISSIONS MADE BY LD. DR AND HAVE PERUSED THE ORDER S OF AUTHORITIES BELOW . THE ONLY ADDITION ASSAILED BY THE ASSESSEE IN APPEAL IS WITH RESPECT TO SUBSIDY RS.28,06,200/ - BEING TREATED AS REVENUE RECEIPT. THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE FINDINGS OF ASSESSING OFFICER IN HOLDING THE AMOUNT OF SUBSIDY AS CAPITAL IN NATURE BY PLACING RELIANCE THE DECISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF SA HNEY STEEL & PRESS WORKS LTD. ETC. ETC. VS. COMMISSIONER OF INCOME TAX (SUPRA). 6. WE OBSERVE THAT THE SCHEME OF SUBSIDY WAS NEVER FURNISHED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW. THUS, THE AUTHORITIES BELOW HAD NO OCCASION TO EXAMINE THE PURPOSE OF SUBSIDY GRANTED BY NABARD. THE HONBLE APEX COURT HAS HELD THAT PURPOSE TEST HAS TO BE APPLIED BEFORE DECIDING THE NATURE OF SUBSIDY RECEIVED. IN THE ABSENCE OF EXAMINATION OF A VI TAL DOCUMENT WHICH DESCRIBES THE NATURE AND PURPOSE OF SUBSIDY IT WOULD NOT BE PROPER TO HOLD THE SUBSIDY EITHER REVENUE OR CAPITAL IN NATURE. UNDER SUCH CIRCUMSTANCES WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO ASSESSEE TO FURNISH THE 5 ITA NO . 764/PUN/2016, A.Y. 2011 - 12 SCHEME UNDER WHICH SUBSIDY HAS BEEN RECEIVED BY THE ASSESSEE FROM NABARD. THE ASSESSING OFFICER AFTER CONSIDERING THE SAME AND AFTER ALLOWING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE SHALL DECIDE THIS ISSUE A FRESH, IN ACCORDANCE WITH LAW. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE IN THE TERMS AFORESAID. ORDER PRONOUNCED ON WEDNESDAY, THE 27 TH DAY OF JUNE, 201 8 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 27 TH JUNE, 2018 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 2, PUNE 4. / THE CIT - I, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE