The Haryana State Co-operative Supply and Marketing Federation Ltd., Panchkula V. DCIT, Panchkula

ITA 801/CHANDI/2012

• Counselvise Citation: 80121514 RSA 2012
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 06-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH
• Assessee Lawyers: RAMAN PARTI
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 801/CHD/2012 (ASSESSMENT YEAR : 2007-08) THE HARYANA STATE CO-OPERATIVE VS. THE D.C.I.T. , SUPPLY & MARKETING FEDERATION LTD., PANCHKULA C IRCLE, SECTOR 5, PANCHKULA. PANCHKULA. PAN: AAALH0040D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAMAN PARTI RESPONDENT BY : SHRI MANJEET SINGH, DR DATE OF HEARING : 25.10.2012 DATE OF PRONOUNCEMENT : 30.10.2012 O R D E R PER SUSHMA CHOWLA, J.M, : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), PANCHKULA DAT ED 24.05.2012 RELATING TO ASSESSMENT YEAR 2007-08 AGAINST THE ORD ER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT). 2. THE ONLY GROUND OF APPEAL RAISED BY THE ASSESSEE READS AS UNDER: 1. BECAUSE THE APPELLANT ASSESSEE HAD LET OUT THE GODOWNS TO VARIOUS PARTIES TO BE USED FOR STORAGE OR IN PROCES SING AND FACILITATING THE MARKETING OF AGRICULTURAL COMMODIT IES FROM WHERE RENT WAS BEING EARNED, THE ORDER OF THE WORTHY CI T(A) UPHOLDING THE ENTIRE DISALLOWANCE OF DEDUCTION CLAIMED U/S 80P(2)(E), IS ILLEGAL, ARBITRARY AGAINST THE FACTS OF THE CASE AN D ALSO THE JUDGMENT OF THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN ITA NO. 157,159,664 OF 2005, 477 OF 2006, 419 OF 2007, 275 OF 2009 AND 246, 251OF 2010 AND THEREFORE DESERVES TO BE SET ASIDE. 3. THE ISSUE RAISED IN THE PRESENT APPEAL BY THE AS SESSEE IS IN RELATION TO THE CLAIM OF DEDUCTION UNDER SECTION 80P(2)(E) O F THE ACT. 2 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSM ENT IN THE CASE WAS INITIALLY COMPLETED ON TOTAL INCOME OF RS.98,53,17, 720/- VIDE ORDER DATED 24.12.2009. THE ASSESSEE PREFERRED AN APPEAL AGAIN ST THE ADDITION MADE BY THE ASSESSING OFFICER AND CIT (APPEALS) VIDE ORD ER DATED 4.6.2010 ALLOWED DEDUCTION UNDER SECTION 80P(2)(E) OF THE AC T AND UPHELD THE ADDITION MADE ON ACCOUNT OF PRIOR PERIOD EXPENSES A ND RESTRICTED DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT. BOTH THE ASSESSEE AND THE REVENUE PREFERRED APPEAL BEFORE THE TRIBUNAL THE T RIBUNAL VIDE ITS ORDER DATED 18.2.2011 IN ITA NO.1081/CHD/2010 AND I N ITA NO.1095/CHD/2010 REVERSED THE ORDER OF THE CIT (APP EALS) AND DENIED DEDUCTION UNDER SECTION 80P(2)(E) OF THE ACT AMOUNT ING TO RS.14,80,41,864/-. THE SAID DEDUCTION WAS DENIED T O THE ASSESSEE BY RELYING UPON THE RATIO LAID DOWN BY THE HON'BLE PUN JAB & HARYANA HIGH COURT VIDE ITS JUDGMENT DATED 8.9.2010 IN ASSESSEE S OWN CASE IN ITA NO.157 OF THE ACT 2005. HOWEVER, IN RESPECT OF THE RESTRICTION IN THE DEDUCTION CLAIMED UNDER SECTION 80P(2)(D) OF THE AC T THE TRIBUNAL SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICE R TO DECIDE THE SAME AFRESH ON THE GROUND THAT THE ISSUE RAISED IN THE S AID APPEAL WAS IDENTICAL TO THE ISSUE RAISED IN THE EARLIER YEARS. 5. THE ASSESSING OFFICER IN THE SECOND ROUND OF ASS ESSMENT PROCEEDINGS REQUISITIONED THE INFORMATION/EXPLANATI ON AND EVIDENCE RELEVANT TO THE ISSUE INVOLVED. THE REPLY OF THE A SSESSEE IS INCORPORATED UNDER PARA 2.1 AT PAGES 2 TO 5 OF THE ASSESSMENT OR DER UNDER WHICH THE ASSESSEE HAS MADE A PLEA FOR THE DEDUCTION CLAIMED UNDER SECTION 80P(2)(D) OF THE ACT. THE ASSESSING OFFICER VIDE P ARAS 4,5 AND 6 CONSIDERED THE ISSUE OF DEDUCTION CLAIMED UNDER SEC TION 80P(2)(D) OF THE ACT AND RECOMPUTED THE DEDUCTION AND ALLOWED RELIEF OF RS.1.72 CRORES. THE ASSESSEE FILED AN APPEAL AGAINST THE ORDER OF T HE ASSESSING OFFICER 3 BEFORE THE CIT (APPEALS) AND THE ISSUE RAISED IN TH E GROUND OF APPEAL VIDE GROUND NO.2 WAS AGAINST THE DISALLOWANCE OF DE DUCTION UNDER SECTION 80P(2)(E) OF THE ACT AND VIDE GROUND NO.3 W AS AGAINST DISALLOWANCE OF DEDUCTION UNDER SECTION 80P(2)(D) O F THE ACT. THE CIT (APPEALS) AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE FIRST DECIDED THE ISSUE OF DISALLOWANCE OF DEDUCTION UNDE R SECTION 80P(2)(E) OF THE ACT VIDE PARA 4 AND AFTER NOTING THE DECISIO N OF THE HON'BLE PUNJAB & HARYANA HIGH COURT VIDE ORDER DATED 8.9.20 10 IN ITA NO.157 OF 2005 AND ALSO THE DECISION OF THE TRIBUNAL IN IT A NO.108/CHD/2010 VIDE ORDER DATED 18.2.2011 HELD THAT THE ISSUE RAIS ED IN THE PRESENT APPEAL WAS COVERED AGAINST THE ASSESSEE AND THERE W AS NO REASON TO INTERFERE WITH THE ORDER OF THE ASSESSING OFFICER. THE FINDINGS OF THE HON'BLE PUNJAB & HARYANA HIGH COURT VIDE ORDER DATE D 8.9.2010 IN ITA NO.157 OF 2005 ARE REPRODUCED UNDER PARA 4.4 AT PAG E 3 AND PART OF PAGE 4 OF THE APPELLATE ORDER. FURTHER THE RELEVANT PAR T OF THE DECISION OF THE CHANDIGARH BENCH OF THE TRIBUNAL DATED 18.2.2011 IS REPRODUCED UNDER PARA 4.5 AT PAGES 4 AND 5 OF THE APPELLATE ORDER. THE SAID JUDGMENTS/DECISIONS ARE NOT BEING REPRODUCED FOR TH E SAKE OF BREVITY. FURTHER THE CIT (APPEALS) DIRECTED THE ASSESSING OF FICER TO RECOMPUTE THE DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT IN VIEW OF THE EXPENSES INCURRED WHOLLY AND EXCLUSIVELY FOR EARNING THE SAI D INCOME. 6. THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AG AINST THE DENIAL OF DEDUCTION UNDER SECTION 80P(2)(E) OF THE ACT. THE LEARNED A.R. FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE STORAGE CHARGES RECEIVED BY THE ASSESSEE FROM HIS RENTAL INCOME WERE TO BE CONSIDER ED FOR THE PURPOSE OF DEDUCTION UNDER SECTION 80P(2)(E) OF THE ACT. VARI OUS ARGUMENTS WERE RAISED BY THE LEARNED A.R. FOR THE ASSESSEE IN THIS REGARD. 4 7. THE LEARNED D.R. FOR THE REVENUE POINTED OUT THA T THE ISSUE STANDS DECIDED BY THE ORDER OF THE TRIBUNAL AND BOTH THE A SSESSING OFFICER AND THE CIT (APPEALS) HAVE EXCEEDED THEIR JURISDICTION IN REDECIDING THE SAID ISSUE. 8. THE ASSESSEE HAS PLACED ON RECORD COPY OF THE OR DER OF THE TRIBUNAL IN ITA NO.1081/CHD/2010 WHICH IS THE APPEAL FILED B Y THE REVENUE AGAINST THE GRANT OF DEDUCTION UNDER SECTION 80P(2) (E) OF THE ACT IN THE FIRST ROUND OF PROCEEDINGS WHERE THE ASSESSING OFFI CER HAD DENIED THE SAID DEDUCTION AND CIT (APPEALS) HAD ALLOWED THE SA ID DEDUCTION. THE GROUNDS OF APPEAL RAISED BY THE REVENUE AS REFERRED TO BY THE TRIBUNAL VIDE PARA 2 READS AS UNDER: (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING ADDITION OF RS.14,80,41,864/- WHEREAS THE BASIC ACTIVITY OF THE ASSESSEE IS PURCHASE/SALE OF FOOD GRAINS, TRANSPORTATION, HANDLING, STORAGE, MILLING ETC. (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 80P(2)(E) OF INCOME- TAX ACT WHEREAS IT HAS BEEN HELD THAT THE INCOME OF THE ASSESSEE BY WAY OF STORAGE/CUSTODY RECEIPT IS IN NATURE OF BUSINESS RECEIPT. (III) IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED. 9. THE TRIBUNAL VIDE PARAS 3 AND 5 OF ORDER DATED 1 8.2.2011 DECIDED THE ISSUE AND HELD THE ASSESSEE NOT TO BE ENTITLED TO THE SAID DEDUCTION UNDER SECTION 80P(2)(E) OF THE ACT IN VIEW OF THE R ATIO LAID DOWN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF THE ASSESSEE ITSELF IN ITA NO.157 OF 2005. THE RELEVANT PARAS OF THE O RDER OF THE TRIBUNAL ARE AS UNDER: 3. WE NAVE HEARD BOTH THE PARTIES. THE ASSESSEE FI LED ITS RETURN OF INCOME ON 31.10.2007 RETURNING ITS TOTAL INCOME AT RS. 80,62,76,210/-. THE ASSESSEE-SOCIETY IS AN APEX COOPERATIVE SOCIETY . IT ALSO ACTS AS AGENT 5 OF THE GOVERNMENT TO PROCURE AGRICULTURAL COMMODITI ES FOR AND ON BEHALF OF THE GOVERNMENT FROM GRAIN MARKETS IN HARYANA. IT PROCURES THE COMMODITIES AT PRICES FIXED BY THE GOVERNMENT AND D ELIVERS THEM TO THE FCI. TILL ITS DELIVERY, IT IS KEPT IN GODOWNS OF TH E ASSESSEE. IN ADDITION TO THE PRICE OF THE COMMODITIES PROCURED BY IT, THE AS SESSEE IS ALSO PAID FOR USE OF ITS GODOWN FOR STORAGE. IT IS IN RESPECT OF THE INCOME RECEIVED ON ACCOUNT OF STORAGE CHARGES THAT THE ASSESSEE CLAIME D DEDUCTION U/S 80P(2)(E) WHICH WAS DISALLOWED BY THE AO BUT, ON AP PEAL, ALLOWED BY THE ID. CIT(A) FOLLOWING THE ORDER OF THE TRIBUNAL IN THE EARLIER YEARS. IT MAY BE MENTIONED HERE THAT THE RELIEF U/S 80P(2) (E) WAS ALLOWED BY THIS TRIBUNAL TO THE ASSESSEE IN RESPECT OF INCOME ARISING ON ACCOUNT OF FROM STORAGE IN EARLIER YEARS AGAINST WHICH APPEAL WAS FIELD BY THE DEPARTMENT BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT. THE HON'BLE HIGH COURT HAS DECIDED THE ISSUE IN FAVOUR OF THE REVENUE BY ITS JUDGMENT DATED*8.9.2010 IN CIT V. HARYANA STATE COO PERATIVE SUPPLY & MARKETING FEDERATION LTD, PANCHKULA, ITA NO.157/2 005. THE OPERATIVE PORTION OF THE SAID ORDER READS AS UNDER: '14. IN THE PRESENT CASE, IT HAS BEEN CLEARLY HELD THAT THE ASSESSEE WAS PURCHASING THE GOODS AND THEN SELL ING THE GOODS TO FCI AND IN SUCH A SITUATION, STORING WAS PART OF BUSINESS OF THE ASSESSEE AND DID NOT AMOUNT TO LETTING OUT OF STORA GE CAPACITY, AS TILL THE GOODS WERE SOLD TO FCI, GOODS BELONGED TO THE ASSESSEE ITSELF AND NOT TO THE FCI. THIS BEING THE FACTUAL S ITUATION, THE MATTER IS FULLY COVERED BY JUDGMENT OF THE HON'BLE SUPREME COURT IN SURAT VENKAR SAHAKARI SANGH AND A VENKATA SUBBARAO AS REITERATED IN UDAIPUR SAHAKARI UPBHOKTA. THE INCOME OF THE ASSESSEE FOR STORAGE COULD NOT BE TREATED AT PAR WI TH THE CHARGES. QUESTIONS ARE ANSWERED IN FAVOUR OF REVENU E AND AGAINST THE ASSESSEE. ACCORDINGLY, I.T.A NOS. 157, 157, 159, 664 OF 2205, 477 OF 2006, 419 OF 2007, 275 OF 2009 AND 246, 251 OF 2010 ARE ALLOWED.' 5. AT THE TIME OF HEARING BEFORE US, BOTH THE PARTIES FAIRLY SUBMITTED THAT THE ISSUE WAS COVERED IN FAVOUR OF T HE DEPARTMENT AND AGAINST THE ASSESSEE BY THE AFORESAID ORDER PASSED BY THE HON'BLE JURISDICTIONAL HIGH COURT. IN THIS VIEW OF THE MAT TER, THE APPEAL FILED BY THE DEPARTMENT IS ALLOWED. 10. HOWEVER, IN THE APPEAL FILED BY THE ASSESSEE VI DE ITA NO.1095CHD/2010, THE ISSUE OF CLAIM OF DEDUCTION UN DER SECTION 80P(2)(D) WAS SET ASIDE TO THE FILE OF THE ASSESSIN G OFFICER FOR FRESH DECISION IN LINE WITH THE DIRECTION GIVEN BY THE TR IBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2006-07 IN ITA NO.867/CHD/2009. THE CONSOLIDATED ORDER OF THE TRIBUNAL IN THE APPEA L FILED BY BOTH THE REVENUE AND THE ASSESSEE IS DATED 18.2.2011. COPY OF THE SAME IS PLACED ON RECORDS. FROM THE PERUSAL OF THE SAID ORDER IT TRANSPIRES THAT IN RELATION TO THE ISSUE OF DEDUCTION CLAIMED UNDER SE CTION 80P(2)(E) OF THE ACT, THE ASSESSEE WAS HELD NOT TO BE ENTITLED TO TH E AFORESAID DEDUCTION 6 IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE PUNJA B & HARYANA HIGH COURT (SUPRA). ONLY THE ISSUE OF COMPUTATION OF DE DUCTION UNDER SECTION 80P(2)(D) WAS RESTORED BACK TO THE FILE OF THE ASSE SSING OFFICER AND NOT THE ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 80P(2 )(E) OF THE ACT, WHICH IN CLEAR TERMS WAS HELD TO BE NOT ALLOWABLE TO THE ASSESSEE. THE ASSESSING OFFICER IN THE SECOND ROUND OF PROCEEDING S I.E. VIDE ORDER PASSED UNDER SECTION 143(3) R.W.S.254 OF THE ACT HA S FAR EXCEEDED THE JURISDICTION IN DECIDING THE ISSUE OF CLAIM OF DEDU CTION UNDER SECTION 80P(2)(E) OF THE ACT. THE CIT (APPEALS) THEREAFTER HAD ALSO ADJUDICATED THE ISSUE THOUGH THE ORDER OF THE TRIBUNAL IN THIS REGARD WAS ABSOLUTELY CLEAR THAT THE SAID DEDUCTION WAS NOT ALLOWABLE TO THE ASSESSEE IN VIEW OF THE DECISION BY THE JURISDICTIONAL HIGH COURT. THE ONLY ISSUE TO BE ADDRESSED BY THE ASSESSING OFFICER AND/OR BY THE CI T (APPEALS) WAS THE CLAIM OF DEDUCTION UNDER SECTION 80P(2)(D) OF THE A CT. THE ASSESSEE VIDE GROUND NO.1 RAISED BEFORE US HAS AGITATED THE ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 80P(2)(E) OF THE ACT WHICH WAS CLEARLY SETTLED BY THE TRIBUNAL VIDE ITS ORDER DATED 18.2.2011, UND ER WHICH VIDE PARA 5 THE ASSESSEE WAS HELD NOT TO BE ENTITLED TO THE CLA IM OF DEDUCTION UNDER SECTION 80P(2)(E) OF THE ACT. IN VIEW THEREOF, WE FIND NO MERIT IN THE PRESENT APPEAL FILED BY THE ASSESSEE BY RAISING THE ISSUE OF GRANT OF DEDUCTION UNDER SECTION 80P(2)(E) OF THE ACT WHICH STANDS SETTLED BY THE ORDER OF THE TRIBUNAL DATED 18.2.2011. THUS THE AP PEAL OF THE ASSESSEE IS DISMISSED IN LIMINE. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF OCTOBER, 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30 TH OCTOBER, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 7