JCIT(OSD), Circle -4, Kolkata, Kolkata V. M/s Sree Kamakhya Tea Co. Pvt. Ltd., Kolkata

ITA 766/KOL/2012

• Counselvise Citation: [2013] 119 COUNSELVISE.COM (IT) 2941 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 14-05-2012
• Court: TRIBUNAL
• Department Lawyers: K N JANA
• Assessee Lawyers: SUNDEEP MUKHERJEE
• Section: 43B; 144

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE . . . . . . . . , ! /AND ' #!' , ) [BEFORE SHRI P. K. BANSAL, AM & SHRI MAHAVIR SINGH, JM] !$ !$ !$ !$ / I.T.A NO. 766/KOL/2012 #% &' #% &' #% &' #% &'/ // / ASSESSMENT YEAR: 2005-06 JOINT COMMISSIONER OF INCOME-TAX (OSD), VS. M/S. S REE KAMAKHYA TEA CO. PVT. LTD. CIRCLE-4, KOLKATA (PAN: AAECS4245E) ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 14.02.2013 DATE OF PRONOUNCEMENT: 15.03.2013 FOR THE APPELLANT: SHRI K. N. JANA, JCIT, SR . DR FOR THE RESPONDENT: SHRI SUNDEEP MUKHERJEE, ADVOCATE - / ORDER PER BENCH: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-IV, KOLKATA IN APPEAL NO. 242/CIT(A)-IV/07-08 DATED 21.12.2011. ASSESSMENT WA S FRAMED BY ACIT, CIRCLE-4, KOLKATA U/S. 144 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER R EFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2005-06 VIDE HIS ORDER DATED 28.12.2007. 2. AT THE OUTSET, IT IS NOTICED THAT THIS APPEAL OF REVENUE IS DELAYED BY 30 DAYS. REVENUE HAS FILED CONDONATION PETITION STATING THE REASON AS UN DER: 15.04.2012 :SUNDAY 16.04.2012 : APPEAL SCRUTINY REPORT PREPARED AND SENT TO CIT, KOL-II KOLKATAS OFFICE TO THROUGH ADDL. CIT, RANGE-4, FOR HIS CONSID ERATION AND THIS OFFICE 08.05.2012 AWAITING COMMUNICATION FROM CIT, KOL-II, KOLKATAS OFFICE. 09.05.2012 : APPLICATION FOR FILING SECOND APPEAL COMMUNICATED 10.04.2012 : THE PAPERS WERE BEING PROCESSED FOR FILING TO 11.05.2012 12.05.2012 : SATURDAY & SUNDAY TO 13.05.2012 14.05.2012 : THE PAPERS ARE FILED FOR SECOND APPEA L. LD. AR HAS CONCEDED THE POSITION AND DID NOT RAISE ANY OBJECTION FOR CONDONATION OF DELAY. HENCE, THE DELAY OF 30 DAYS IS CONDONED AND APPEAL IS ADMITTED. 2 ITA NO.766/K/2012 SREE KAMAKHYA TEA CO. PVT. LTD. 2005-06 3. THE FIRST ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) DELETING THE ADDITION OF CESS ON GREEN LEAF. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.1: 1.THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) ERRED IN LAW IN DELETING THE ADDITION OF RS.14,08,405/- ON ACCOUNT OF CESS O N GREEN LEAF WITHOUT CONSIDERING THE FACT THAT EXPENSES ON ACCOUNT OF CESS ON GREEN LEAF IS RELATED TO 100% AGRICULTURAL OPERATION AND SLP IS PENDING BEFORE THE HONBLE SUP REME COURT AGAINST THE DECISION OF CALCUTTA HIGH COURT IN THE CASE OF AFT INDUSTRIE S LTD. VS. CIT (270 ITR 167) IN THE LIGHT OF WHICH LD. CIT(A) DECIDED THE ISSUE IN FAVO UR OF THE ASSESSEE. 4. AT THE OUTSET, IT IS NOTICED THAT THE ASSESSEE H AS PAID A SUM OF RS.14,8,405/- TOWARDS CESS ON GREEN LEAF. THE AO DISALLOWED THIS EXPENSES BY HOLDING THAT CESS ON GREEN LEAF IS RELATABLE TO AGRICULTURAL INCOME AS HELD BY HONBLE GUWAHATI HIGH COURT IN THE CASE OF JOREHAUT GROUP LIMITED VS. ACIT (2007) 289 ITR 422 (GAU). BUT CIT( A) DELETED THE ADDITION BY FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF AFT INDUSTRIES LTD. VS. CIT (2004) 270 ITR 167 (CAL). SINCE CIT(A) HAS FOLLOWE D A JURISDICTIONAL HIGH COURT, WE FIND NO INFIRMITY IN HIS ORDER AND THE SAME IS HEREBY UPHEL D. THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 5. THE NEXT ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE ADDITION OF INTEREST EXPENSES BEING ASSESSEE ADVANC ED INTEREST FREE LOAN WHILE PAYING INTEREST ON INTEREST BEARING LOAN THEREBY REDUCING ITS ACTUAL P ROFIT. FOR THIS, REVENUE HAS RAISED FOLLOWING GROUND NO.2: 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. CIT(A) ERRED IN LAW BY DELETING THE ADDITION OF RS.72,15,039/- ON INTEREST EXPENSE WITHOUT REFUTING THE FACTS OF THE CASE THAT THE ASSESSEE HAD ADVANCED INTEREST FREE LOAN W HILE PAYING INTEREST ON INTEREST BEARING LOAN TAKEN AND THUS REDUCING ITS ACTUAL PRO FIT. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO NOTED THE DETAILS FROM SCHEDULE 13 & 14 OF THE P&L ACCOUNT. HE ALSO NOTED THAT THE ASSESSEE HAS TAKEN LOAN OF MORE THAN RS.10 CR. AND ADVANCED INTEREST FREE LOAN OF RS.2,45,93,747/-. HE CALCULATED INTEREST @ 12% ON THIS AMOUNT AT RS.29,51,250/- AND DISALLOWED THE SAME. FURTHER, HE COMPUTED INTEREST ACCRUED AND DUE AT RS.10,97,165/- AND RS.31,66,624/- ON SECURED AND UNSECURED LOANS RESPE CTIVELY AND DISALLOWED BY INVOKING THE PROVISIONS OF SECTION 43B OF THE ACT, THEREBY IN TO TAL DISALLOWED A SUM OF RS.72,15,039/-. THE CIT(A) JUST RELYING ON THE SUBMISSIONS OF THE ASSES SEE AND WITHOUT VERIFYING THE SAME DELETED THE ADDITION BY GIVING FOLLOWING FINDING IN PARA 4. 1: 3 ITA NO.766/K/2012 SREE KAMAKHYA TEA CO. PVT. LTD. 2005-06 4.1. I HAVE GONE THROUGH THE ORDER OF THE AO AS WE LL AS THE SUBMISSION OF THE AR, WHO HAS ALSO FILED A COPY OF THE PETITION TO THE CONCER NED AO, FOR HIS REMARKS. SINCE THERE IS NO COMMUNICATION FROM HIS END, IT IS EVIDENT THAT T HE AO HAS NOT NOTICED ANY ADVERSITIES IN SUCH PETITION. IT IS ALSO A FACT THAT SIMILAR A DDITION IN ASSTT. YEAR 2002-03 IN THE CASE OF THE ASSESSEE HIMSELF HAS BEEN DELETED IN ITAT AN D AS PER SUBMISSION OF THE AR, THE DEPARTMENT HAS NOT PREFERRED APPEAL AGAINST SUCH OR DER. UNDER THE CIRCUMSTANCES AND DULY FOLLOWING THE DECISIONS OF HIGHER APPELLATE AU THORITIES AS SITED BY THE AR, I DELETE THE ADDITION OF RS.72,15,039 ON ACCOUNT OF INTEREST PAI D. 7. WE FIND THAT NONE OF THE PLEAS WERE TAKEN BY ASS ESSEE BEFORE THE AO REGARDING NEXUS OR HAVING MORE INTEREST FREE FUNDS AVAILABLE WITH HIM. EVEN THE CIT(A) HAS NOT FOUND OUT ANY NEXUS OR GIVING COGENT FINDING WITH RESPECT TO ADVA NCEMENT OF THESE FUNDS OUT OF INTEREST BEARING FUNDS OR AVAILABILITY OF INTEREST BEARING F UNDS. IN THE ABSENCE OF FINDING, WE ARE OF THE VIEW THAT THIS ISSUE NEEDS RECONSIDERATION AT THE L EVEL OF AO IN THE LIGHT OF THE SUBMISSIONS OF ASSESSEE AS SUBMITTED BEFORE CIT(A). HENCE, THIS I SSUE IS SET ASIDE TO THE FILE OF AO FOR FRESH CONSIDERATION AND THIS ISSUE OF REVENUES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, APPEAL OF REVENUE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. 9. ORDER PRONOUNCED IN THE OPEN COURT ON 15.03.2013 SD/- SD/- . . . . . . . . , ' ' ' ' #!' #!' #!' #!' , (P. K. BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( . . . .) )) ) DATED : 15 TH MARCH, 2013 /0 #12 #3 JD.(SR.P.S.) 4 ITA NO.766/K/2012 SREE KAMAKHYA TEA CO. PVT. LTD. 2005-06 - 4 +##5 65&7- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT JCIT (OSD), CIRCLE-4, KOLKATA. 2 +,)* / RESPONDENT SREE KAMAKHYA TEA CO. PVT. LTD., 4, HASTINGS PARK ROAD, KOLKATA-700 027 . 3 . #- ( )/ THE CIT(A), KOLKATA 4. 5. #- / CIT KOLKATA 5 <#= +# / DR, KOLKATA BENCHES, KOLKATA ,5 +#/ TRUE COPY, ->/ BY ORDER, ' !2 /ASSTT. REGISTRAR .