Anurag Radhesham Attal, Aurangabad V. ITO Wd-2[1] Aurangabad, Aurangabad

ITA 829/PUN/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2530 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 21-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 25-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUBHASH K R
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 829/PN/2012 %' ( ')( / ASSESSMENT YEAR : 2008-09 ANURAG RADHESHAM ATTAL, 2-A, J.K. TOWERS, ADALAT ROAD, AURANGABAD PAN : AFIPA1080M ....... / APPELLANT ' / V/S. INCOME TAX OFFICER, WARD 2(1), AURANGABAD / RESPONDENT / ITA NO. 863/PN/2012 %' ( ')( / ASSESSMENT YEAR : 2008-09 INCOME TAX OFFICER, WARD 2(1), AURANGABAD ....... / APPELLANT ' / V/S. SHRI ANURAG RADHESHYAM ATTAL, PROP. ANURAG WARE HOUSING & AGRO PROCESSING, 2-A, J.K. TOWERS, ADALAT ROAD, AURANGABAD PAN : AFIPA1080M / RESPONDENT ASSESSEE BY : SMT. DEEPA KHARE REVENUE BY : SHRI SUBHASH K.R. / DATE OF HEARING : 13-01-2016 / DATE OF PRONOUNCEMENT : 11-03-2016 2 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 * / ORDER PER VIKAS AWASTHY, JM : THESE CROSS APPEALS HAVE BEEN FILED BY THE ASSESSEE AN D THE REVENUE IMPUGNING THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), AURANGABAD DATED 14-02-2012 U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR THE ASSESSMENT YEAR 2008-09. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS AN INDIVIDUAL, ENGAGED IN THE BUSINESS OF GINN ING AND PRESSING OF COTTON AND WAREHOUSING. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 ON 29-09-2008 DECLARING TAXABLE INCOME AS NIL. THE CASE OF THE ASSESSEE WAS SELEC TED FOR SCRUTINY UNDER CASS AND ACCORDINGLY NOTICE U/S. 143(2) AN D 143(1) WAS ISSUED TO THE ASSESSEE ON 31-08-2009. DURING THE SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED T HAT THE ASSESSEE HAD CLAIMED DEDUCTION UNDER THE PROVISIONS OF SE CTION 80IB(11A) OF THE ACT. THE ASSESSING OFFICER HELD THAT THE A SSESSEE IS NOT ENGAGED IN THE INTEGRATED BUSINESS OF HANDLING, STORAG E AND TRANSPORTATION OF FOOD GRAINS. THE ASSESSEE IS NEITHER HA VING LABOURERS ON ITS PAYROLL NOR THE ASSESSEE IS HAVING OWN FLEET OF VEH ICLES FOR TRANSPORTATION. THEREFORE, THE ASSESSEE DOES NOT FULFILL THE REQUISITE CONDITIONS FOR CLAIMING DEDUCTION U/S. 80IB(11A) OF THE ACT. THE ASSESSING OFFICER DISALLOWED THE DEDUCTION OF ` 12,03,353/-. APART FROM THE ABOVE, THE ASSESSING OFFICER MADE CERTAIN OTHER DISALLO WANCES / ADDITIONS IN THE INCOME RETURNED BY THE ASSESSEE. 3 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 AGGRIEVED BY THE ASSESSMENT ORDER DATED 30-12-2010, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTE D THE CONTENTIONS OF THE ASSESSEE WITH REGARD TO CLAIM OF DEDUC TION U/S. 80IB(11A) AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE B Y DELETING CERTAIN OTHER DISALLOWANCES/ADDITIONS MADE BY THE ASSESSI NG OFFICER. AGAINST THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS), BOTH, THE ASSESSEE AND THE REVENUE ARE IN APPEAL BEFORE THE TRIBUNAL. 3. THE ASSESSEE HAS ASSAILED THE FINDINGS OF COMMISSIONER O F INCOME TAX (APPEALS) ON TWO COUNTS: I. CONFIRMING THE DISALLOWANCE OF DEDUCTION U/S. 80IB(11A) AMOUNTING TO ` 12,03,353/-, AND II. NON-CONSIDERATION OF THE AUDIT REPORT FILED AT THE TIME OF ASSESSMENT PROCEEDINGS. 4. SMT. DEEPA KHARE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD MADE CLAIM OF DEDUCTION U/S.80IB(11 A) FOR THE FIRST TIME IN ASSESSMENT YEAR 2004-05. IT IS ONLY IN THE ASSESSMENT YEAR UNDER APPEAL THAT THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF DEDUCTION. BASED ON THE DISALLOWANCE MADE DURING THE ASS ESSMENT YEAR 2008-09, ASSESSMENT FOR THE EARLIER YEARS HAVE BE EN REOPENED. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASS ESSEE HAD CLAIMED DEDUCTION U/S. 80IB(11A) AS THE ASSESSEE IS ENGAG ED IN THE INTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATIO N OF FOOD GRAINS. THE ASSESSEE HAS CREATED STORAGE FACILITIES FOR FOO D GRAINS IN ACCORDANCE WITH THE NORMS PRESCRIBED BY THE NABARD. I N SUPPORT OF HER SUBMISSIONS, THE LD. COUNSEL PLACED ON RECORD A COPY O F THE REPORT BY JOINT MONITORING COMMITTEE DATED 20-05-2005 UNDER RU RAL GODOWN 4 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 SCHEME. ONE OF THE COMMITTEE MEMBERS IS OFFICIAL OF NABARD. THE OBJECT OF THE COMMITTEE IS TO EXAMINE THE CONDITIONS OF W AREHOUSING FACILITIES. THE LD. COUNSEL SUBMITTED THAT THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF DEDUCTION U/S. 80IB(11A) ON THREE COUNTS, VIZ : I. THERE ARE NO LABOURERS ON PAYROLL OF THE ASSESSEE, II. THE ASSESSEE IS NOT HAVING TRANSPORT FACILITY OF ITS OWN, III. THUS, THE ASSESSEE IS NOT ENGAGED IN INTEGRATED ACTIVITY OF HANDLING, STORAGE AND TRANSPORTATION OF FOOD GRAINS. 4.1 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT A PER USAL OF THE PROVISIONS OF SECTION 80IB(11A) WOULD SHOW THAT TO BE ELIGIBL E TO CLAIM DEDUCTION, THE ASSESSEE SHOULD BE ENGAGED IN THE INTEGRA TED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOOD GRAINS. THE SECTION DOES NOT REQUIRE THAT THESE ACTIVITIES SHOULD BE CARRIED OUT BY THE ASSESSEE BY EMPLOYING LABOURS ON ITS PAYROLL OR OWNING WA REHOUSE OR HAVING OWN FLEET OF VEHICLES FOR TRANSPORTATION. THE ASSES SEE IS ENGAGED IN THE INTEGRATED ACTIVITY BY ENGAGING THE LABOURERS THRO UGH OUTSOURCE AGENCIES AND HIRING OF VEHICLES FROM VARIOUS OPERATORS. THE REQUIREMENTS OF LABOURER KEEP ON CHANGING THROUGHOUT T HE YEAR. MORE LABOURERS ARE REQUIRED IMMEDIATELY AFTER THE HARVESTING S EASON. ACCORDINGLY, THE REQUIREMENT OF TRANSPORT VEHICLES GOES U P WHEN THERE IS FREQUENT PURCHASE OF FOOD GRAINS. THE LD. COUNSEL REFERR ED TO PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31-03-2008 AT PAG E 44 OF THE PAPER BOOK TO SHOW THAT THE ASSESSEE HAS CLAIMED WAREH OUSING RECEIPTS AND EXPENSES TOWARDS THE TRANSPORTATION. THE COUNSEL FURTHER REFERRED TO PAGE 138 OF THE PAPER BOOK TO SHOW THAT THE ASSES SEE HAS CLAIMED LOADING AND UNLOADING EXPENSES. THE LD. COUNSEL REFERRED TO LETTER WRITTEN BY THE ASSESSEE TO THE ASSESSING OFFICER ON 06-1 2-2012 AT PAGE 105 OF THE PAPER BOOK. THE LD. COUNSEL SUBMITTED THAT TH E ASSESSEE 5 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 HAD SUBMITTED THE LIST OF VEHICLES ALONG WITH THE NAME OF OW NERS, DETAILS OF TRANSPORTATION EXPENSES AND COMPLETION CERTIFICAT E OF WAREHOUSING BUILDING. THE LD. COUNSEL FURTHER SUBMITTED THA T AS REGARDS LABOUR CHARGES, THE SAME ARE COLLECTED BY THE A GENCY DIRECTLY FROM THE RESPECTIVE PARTIES, ALTHOUGH, THE LABOUR ARRANGEM ENTS FOR LOADING AND UNLOADING AT THE WAREHOUSE IS MADE BY THE A SSESSEE. TO SUBSTANTIATE THE PAYMENT OF TRANSPORTATION EXPENSES, TH E LD. COUNSEL REFERRED TO THE LEDGER ACCOUNT FOR THE PERIOD 01-04-200 7 TO 31-03-2008 AT PAGE 144 OF THE PAPER BOOK. THE COUNSEL CONTENDED THAT THE ISSUE WHETHER OWNING OF INFRASTRUCTURE IS NECESSARY TO CLAIM DE DUCTION U/S. 80IB(11A) WAS CONSIDERED BY THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF A.P. STATE WAREHOUSING CORPORATION VS. DEPUTY COMMISSIONER OF INCOME TAX REPORTED AS 45 TAXMANN.COM 3 32 (HYDERABAD-TRIB.). THE TRIBUNAL HELD THAT OWNING OF INFRASTRUC TURE FACILITIES IS NOT NECESSARY TO CLAIM DEDUCTION U/S. 80IB(11A). 5. IN RESPECT OF SECOND ISSUE RAISED IN THE APPEAL REGARD ING FILING OF AUDIT REPORT FOR CLAIMING DEDUCTION, THE LD. COUNSEL SUBMITTED THAT THE AUDIT REPORT IN THE PRESCRIBED FORM WAS OBTAINED FROM THE CHARTERED ACCOUNTANT ON 20-08-2008. HOWEVER, THE SAME COULD NOT BE FILED ALONG WITH THE RETURN OF INCOME. THE ASSESSEE THEREAFTER OFFE RED TO FILE AUDIT REPORT BEFORE THE AUTHORITIES BELOW BUT THE REQUEST OF A SSESSEE WAS NOT CONSIDERED. THE LD. COUNSEL FILED AN APPLICATION FOR PLACING ON RECORD AUDIT REPORT AS ADDITIONAL EVIDENCE. THE LD. COUNSEL PRAYED FOR ACCEPTING THE AUDIT REPORT AND ALLOWING THE APPEAL OF THE ASSESSEE ON MERITS. 6. ON THE OTHER HAND SHRI SUBHASH K.R. REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIO NER OF 6 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 INCOME TAX (APPEALS) IN REJECTING THE CLAIM OF ASSESSEE U/S . 80IB(11A). THE LD. DR SUBMITTED THAT THE ASSESSEE IS NEITHER OWNING INFRASTRUCTURE FACILITIES NOR IT IS ENGAGED IN THE INTEGRATED BUSINESS OF HA NDLING, STORAGE AND TRANSPORTATION OF FOOD GRAINS. FURTHER, THE ASSESSEE HAD NOT FILED AUDIT REPORT IN THE PRESCRIBED FORM WHICH IS NECES SARY FOR CLAIMING DEDUCTION U/S. 80IB(11A) OF THE ACT. NO SUFFICIENT REA SON HAS BEEN GIVEN FOR NOT PLACING THE AUDIT REPORT EITHER DURING ASSESSMENT PROCEEDINGS OR DURING THE FIRST APPELLATE PROCEEDINGS. IN THE ABSENCE OF AUDIT REPORT THE CLAIM OF THE ASSESSEE CANNOT BE ACCEP TED. THE LD. DR PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE. 7. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. BEFORE ADVERTING TO THE FACTS OF THE CASE IT IS NECESSARY TO FIRS T EXAMINE THE PROVISIONS OF SECTION 80IB(11A) UNDER WHICH THE ASSESSEE IS CLAIMING DEDUCTION. THE RELEVANT PROVISIONS OF SECTION 80IB(11A) ARE REPRODUCED HERE-IN-BELOW: (11A) THE AMOUNT OF DEDUCTION IN A CASE OF AN UNDE RTAKING DERIVING PROFIT FROM THE BUSINESS OF PROCESSING, PRESERVATIO N AND PACKAGING OF FRUITS OR VEGETABLES OR MEAT AND MEAT PRODUCTS OR P OULTRY OR MARINE OR DAIRY PRODUCTS OR FROM THE INTEGRATED BUSINESS OF HANDLING, STORAGE A ND TRANSPORTATION OF FOODGRAINS, SHALL BE HUNDRED PER CENT OF THE PROFITS AND GAINS DERIVED FROM SUCH UNDERTAKING FOR FIVE ASSESS MENT YEARS BEGINNING WITH THE INITIAL ASSESSMENT YEAR AND THER EAFTER, TWENTY-FIVE PER CENT (OR THIRTY PER CENT WHERE THE ASSESSEE IS A COMPANY) OF THE PROFITS AND GAINS DERIVED FROM THE OPERATION OF SUC H BUSINESS IN A MANNER THAT THE TOTAL PERIOD OF DEDUCTION DOES NOT EXCEED TEN CONSECUTIVE ASSESSMENT YEARS AND SUBJECT TO FULFILMENT OF THE C ONDITION THAT IT BEGINS TO OPERATE SUCH BUSINESS ON OR AFTER THE 1ST DAY OF APRIL, 2001. PROVIDED THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO AN UNDERTAKING ENGAGED IN THE BUSINESS OF PROCESSING, PRESERVATION AND PACKAGING OF MEAT OR MEAT PRODUCTS OR POULTRY OR MA RINE OR DAIRY 7 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 PRODUCTS IF IT BEGINS TO OPERATE SUCH BUSINESS BEFO RE THE 1ST DAY OF APRIL, 2009. 8. A BARE PERUSAL OF THE PROVISIONS OF SECTION SHOW THAT DEDUCTION U/S. 80IB(11A) IS AVAILABLE IN THE CASE OF AN UNDERTAKING DE RIVING PROFIT FROM THE INTEGRATED BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOOD GRAINS. THE VITAL WORD USED IN THE SECTION IS INTEG RATED . THE TERM INTEGRATED HAS NOT BEEN DEFINED IN THE ACT NOR IT IS DEFINED UNDER THE GENERAL CLAUSES ACT, 1897. THUS, TO UNDERSTAND THE MEANING OF WORD INTEGRATED IN COMMON PARLANCE, WE REFERRED TO OX FORD ENGLISH DICTIONARY, WHICH EXPLAINS THE WORD INTEGRATE AS, (I). COMBINE OR BE COMBINED TO FORM WHOLE AND (II). BR ING OR COME INTO EQUAL PARTICIPATION IN AN INSTITUTION OR BODY. THUS, THE WORD INTEGRATED USED IN THE SECTION CONNOTES, THAT THE BUSINESS OF HANDLING, STORAGE AND TRANSPORTATION OF FOOD GR AINS SHOULD BE CARRIED OUT IN A COMBINED MANNER. HOWEVER, THE SECTIO N DOES NOT PUT ANY PRE-CONDITION THAT FOR CARRYING OUT THE INTEGRAT ED ACTIVITIES OF HANDLING, STORAGE AND TRANSPORTATION OF FOOD GRAINS THE AS SESSEE SHOULD OWN THE INFRASTRUCTURE FACILITIES OR SHOULD HAVE MANPOWER O N ITS ROLLS FOR CARRYING OUT SUCH BUSINESS ACTIVITIES. IF THE UNDERTA KING IS CARRYING OUT THESE INTEGRATED ACTIVITIES BY EMPLOYING HIRED LABOURER S OR BY TAKING WAREHOUSING FACILITIES ON RENT AND HIRING TRANSPORTAT ION FACILITIES, IN OUR CONSIDERED OPINION THE UNDERTAKING IS ELIGIBLE T O CLAIM DEDUCTION U/S. 80IB(11A). 9. THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF A.P . STATE WAREHOUSING CORPORATION VS. DEPUTY COMMISSIONER OF INCOME TAX (SUPRA) ALSO SUPPORTS OUR VIEW. THE CO-ORDINATE BENCH OB SERVED THAT THE GODOWNS WHERE THIS BUSINESS IS TO BE CARRIED ON NEE D NOT BE OWNED 8 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 BY THE ASSESSEE. THE TRIBUNAL FURTHER OBSERVED THAT ME RELY BECAUSE THE ASSESSEE HAS ENGAGED OUTSIDERS FOR TRANSPORTATION DOES NOT MEAN THAT THE ASSESSEE IS NOT ENGAGED IN THE INTEGRATED BUS INESS OF HANDLING, STORAGE AND FOOD GRAINS. 10. IN THE PRESENT CASE IT IS AN UNDISPUTED FACT THAT T HE ASSESSEE IS NEITHER HAVING LABOUR ON ITS PAYROLLS NOR THE ASSESSEE IS OWNING FLEET OF VEHICLES FOR THE TRANSPORTATION. HOWEVER, THE ASSESSEE IS HAVING WAREHOUSING FACILITIES OF ITS OWN. THE ASSESSEE IN SUPPORT OF HIS CONTENTION HAS PLACED ON RECORD VOUCHERS FOR LOADING, UNL OADING AND TRANSPORTATION TO SUBSTANTIATE THAT IT IS ENGAGED IN INTE GRATED BUSINESS. SOME OF THESE VOUCHERS ARE PLACED ON RECORD BY THE AS SESSEE AT PAGES 1 TO 16 OF THE PAPER BOOK. THE FIRST APPELLATE AUTHORITY R EJECTED THE CLAIM OF THE ASSESSEE BY OBSERVING AS UNDER: 8.2 ..THE ASSESSEE HAS CLAIMED THAT THE HANDL ING CHARGES IN THE FORM OF PAYMENT TO LABOURERS THOUGH NOT DEBI TED IN THE BOOKS OF ACCOUNTS IT HAS BEEN INCLUDED IN THE BILL FOR STORA GE AS THE BILL FOR STORAGE IS INCLUSIVE OF LABOUR CHARGES. ON THE OTHE R HAND, THE A.O. HAS POINTED OUT THAT THE SAID BILLS ISSUED BY THE A SSESSEE FOR WAREHOUSING DOES NOT CONTAIN CHARGES FOR HANDLING A ND NO SEPARATE BILLS ARE ISSUED FOR HANDLING CHARGES AND HENCE THE HANDLING CHARGES ARE ALSO NOT CREDITED TO PROFIT & LOSS ACCOUNT. AS REGARDS TRANSPORTATION FACILITY, THE APPELLANT HAS CLAIMED THAT IT HAS HIRED VEHICLES FOR TRANSPORTATION OF FOOD GRAINS WHENEVER REQUIRED BY THE FARMERS AND HAS DEBITED THE SAID EXPENSES IN THE BO OKS OF ACCOUNTS. THE A.O. HAS CLAIMED THAT THE APPELLANT HAS NOT EAR NED ANY TRANSPORTATION RECEIPT FROM FARMERS AND HAS NOT CRE DITED THE SAME IN THE PROFIT & LOSS ACCOUNT. IN THIS REGARD, IT HAS BEEN NOTICED T HAT THE APPELLANT HAS CLAIMED THE EXPENDITURE OF TRANSPORTA TION AT RS.1,20,000/- ON ESTIMATE BASIS AT RS.10,000/- PER MONTH ON THE BASIS OF SELF MADE VOUCHERS. IN VIEW OF THE ABOVE F ACTS, IT HAS BEEN OBSERVED THAT THE ASSESSEE HAS NOT PROVED BEYOND DO UBT THAT IT HAS PROVIDED HANDLING SERVICES TO THE FARMERS AS THE CO NTENTION OF THE ASSESSEE THAT HE HAS EMPLOYED SKILLED LABOUR FOR HA NDLING THE FOOD GRAINS IS NOT SUPPORTED BY ANY PAYMENT VOUCHERS SUP PORTING THE 9 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 CONTENTION. THE CONTENTION OF THE APPELLANT THAT ' THE FARMERS CHARGED FOR HANDLING CHARGES & THE LABOURS ARE PAID FOR THEIR SERVICES & THE SURPLUS BEING MARGIN IS CREDITED NET TO THE INCOME OF THE ASSESSEE' IS THEREFORE NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE . THEREFORE, I AM OF THE CONSIDERED VIEW THAT THE APPELLANT HAS FA ILED TO PROVE THAT HE HAS CARRIED OUT BUSINESS ACTIVITY OF HANDLING OF FOOD GRAINS ALONGWITH STORAGE OF FOOD GRAINS. FURTHER, AS REGAR DS PROVIDING BUSINESS ACTIVITY OF TRANSPORTATION, IT HAS BEEN NO TICED THAT THE APPELLANT HAS CLAIMED TRANSPORTATION EXPENSES ON AD HOC BASIS AT RS.10,000/- PER MONTH THAT TOO ON THE BASIS OF INTE RNAL VOUCHERS. THEREFORE, I AM OF THE CONSIDERED VIEW THAT THE APP ELLANT HAS NOT PROVED BEYOND DOUBT THAT HE HAS PROVIDED TRANSPORTA TION FACILITY TO FARMERS ALONGWITH STORAGE FACILITY. IN ADDITION TO ABOVE THE COMMISSIONER OF INCOME TAX (APPE ALS) HAS ALSO NOTED THAT THE ASSESSEE HAS NOT FILED AUDIT REP ORT IN THE PRESCRIBED FROM 10CCB FOR CLAIMING DEDUCTION. 11. AS HAS BEEN OBSERVED BY US IN THE PRECEDING PARAGR APHS THE DEDUCTION U/S. 80IB(11A) CAN BE CLAIMED ONLY IF THE ASSESSE E HAS BEEN ABLE TO SHOW THAT IT IS ENGAGED IN INTEGRATED ACTIVITIES O F HANDLING, TRANSPORTATION AND STORAGE OF FOOD GRAINS. OWNING OF TR ANSPORTATION FACILITIES, WAREHOUSING FACILITIES AND MANPOWER ON PAYROLL IS NOT SINE- QUA-NON FOR CLAIMING THE DEDUCTION. WHAT IS ESSENTIAL IS TH AT ALL THE THREE ACTIVITIES OF HANDLING, STORAGE AND TRANSPORTATION SH OULD BE SEWN TOGETHER IN A MANNER THAT THEY BECOME A SINGLE STRUCTU RED PROCESS. IN THE PRESENT CASE THE ASSESSEE HAS NOT BEEN ABLE TO S HOW THE INTEGRATION OF THE THREE ACTIVITIES FOR CLAIMING DEDUCTION. WITH REGARD T O MANPOWER THE CONTENTION OF THE ASSESSEE IS THAT IT DOES NOT HAVE SKILLED/UNSKILLED LABOUR ON ITS PAYROLL AND HAS OUTSOURCED THE SAME. HOWE VER, THE ASSESSEE HAS FAILED TO PLACE ON RECORD ANY DOCUMENT TO SHOW ANY AGREEMENT/ARRANGEMENT WITH THE OUTSOURCING AGENCIES FOR SUPPLY OF LABOUR. THE ASSESSEE HAS FURTHER FAILED TO SHOW FROM THE RECORDS THAT 10 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 THE PAYMENTS HAVE BEEN MADE TO LABOURERS, EXCEPT FOR S OME SELF MADE VOUCHERS, THE SANCTITY OF WHICH IS HIGHLY DOUBTFUL, THERE I S NO OTHER DOCUMENT TO SUPPORT THE CLAIM OF ASSESSEE. SIMILARLY, IN RESPECT OF TRANSPORTATION ACTIVITY THE CONTENT ION OF THE ASSESSEE IS THAT THE ASSESSEE IS USING HIRED TRUCKS . A PERUSAL OF RECORDS SHOW, THAT THE ASSESSEE HAS CLAIMED AD HOC EX PENDITURE OF ` 10,000/- PER MONTH FOR TRANSPORTATION THAT TO ON THE B ASIS OF INTERNAL VOUCHERS. THE ASSESSEE HAS NOT PLACED ON RECORD ANY AGREEMENT/ ARRANGEMENT WITH THE TRANSPORTERS FOR THE TRANSPORTAT ION OF FOOD GRAINS NOR ANY BILLS/INVOICES HAVE BEEN PRODUCED TO SUBSTANTIATE THE PAYMENT FOR TRANSPORTATION. ALTHOUGH, THE ASSESSEE HAS PLACED ON RECORD A REPORT FROM THE JOINT MONITORING COMMITTEE TO SHOW THAT THE WAREHOUSES OWNED BY THE ASSESSEE ARE AS PER GOVT. SP ECIFICATIONS, BUT THIS IS NOT SUFFICIENT TO CLAIM DEDUCTION U/S. 80IB(11A). FROM THE DOCUMENTS ON RECORD THE ONLY INDELIBLE INFERENCE THAT CAN BE DRAWN IS THAT THE ASSESSEE IS PROVIDING WAREHOUSING FACILITIES FOR STO RAGE OF FOOD GRAINS. THE ASSESSEE HAS NOT BEEN ABLE TO SHOW FROM TH E RECORDS THAT THE ACTIVITIES OF HANDLING, STORAGE AND TRANSPORTATION OF FOO D GRAINS ALLEGEDLY CARRIED OUT BY THE ASSESSEE ARE PART OF ONE C OMPOSITE ACTIVITY AND ARE INTEGRATED IN ANY MANNER. THE ASSESSEE HAS FA ILED TO SUBSTANTIATE HANDLING AND TRANSPORTATION COMPONENT OF IN TEGRATED BUSINESS. 12. IN SO FAR AS THE OBJECTION OF THE REVENUE FOR NON-FILING OF AUDIT REPORT IS CONCERNED, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE CAN FILE AUDIT REPORT EVEN AT THE APPELLATE STAGE FOR CLAIMING DE DUCTION. THE DEDUCTION CANNOT BE DENIED MERELY ON THE GROUND THAT THE ASSESS EE HAS NOT FILED AUDIT REPORT ALONG WITH THE RETURN OF INCOME OR A T THE TIME OF ASSESSMENT PROCEEDINGS. IN THE PRESENT CASE, THE ASSESSEE H AS NOT FILED 11 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 AUDIT REPORT BEFORE THE ASSESSING OFFICER. THEREAFTER, THE ASSESSEE DID NOT FILE THE AUDIT REPORT IN THE PRESCRIBED FORM BEFORE THE FIRST APPELLATE AUTHORITY. ALTHOUGH, ONE OF THE REASONS FOR REJ ECTING THE CLAIM OF THE ASSESSEE WAS NON-FILING OF THE AUDIT REPORT. NO W, BEFORE THE TRIBUNAL THE ASSESSEE HAS FILED AN APPLICATION FOR ADMIS SION OF ADDITIONAL EVIDENCE I.E. THE AUDIT REPORT. THE ASSESSEE HAS PLACED ON RECORD AUDIT REPORT IN FORM 10CCB DATED 20-08-2008 AT PAGES 14 TO 18 OF THE PAPER BOOK. IN THE APPLICATION FOR ADMISSION OF ADDIT IONAL EVIDENCE THE REASON FOR NON-FILING OF AUDIT REPORT BEFORE TH E ASSESSING OFFICER, AS WELL AS, COMMISSIONER OF INCOME TAX (APPEALS) HAS B EEN MENTIONED AS INADVERTENT MISTAKE. NO OTHER REASON HAS BEEN GIVEN FOR NON-FILING OF THE AUDIT REPORT. 13. THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF LA KSHMI ENERGY & FOOD LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX REPORTED AS 63 SOT 70 (CHANDIGARH) (URO) ACCEPTED THE AUDIT REPORT AS ADDITIONAL EVIDENCE SINCE THE ASSESSEE WAS ABLE TO SHOW R EASONABLE CAUSE FOR NOT PRODUCING THE SAME BEFORE THE ASSESSING O FFICER OR COMMISSIONER OF INCOME TAX (APPEALS) AS PER RULE 46A(B) OF THE INCOME TAX RULES, 1962. ADDITIONAL EVIDENCE CAN BE ADMITTED IF THE ASSESSEE CAN SHOW SUFFICIENT CAUSE FOR NOT PRODUCING THE SAME BEFOR E THE AUTHORITIES BELOW. IN THE SAID CASE THE ASSESSEE COULD N OT FILE AUDIT REPORT AS THE ASSESSEE HAD SERIOUS DISPUTES WITH THE A UDITOR WHOSE SERVICES WERE ULTIMATELY TERMINATED. 14. THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF COMMIS SIONER OF INCOME TAX VS. XAVIER KELAVANI MANDAL (P) LTD. REPORTED AS 41 TAXMANN.COM 184 (GUJ.) HAS HELD THAT THE ASSESSEE IS PERM ISSIBLE TO PRODUCE AUDIT REPORT BEFORE THE APPELLATE AUTHORITY BY SHOWING A 12 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 SUFFICIENT CAUSE. THUS, THERE IS NO BAR FOR FILING AUDIT REPORT AT LATER STAGE. HOWEVER, THE ASSESSEE HAS TO SHOW BONAFIDE REAS ON FOR NOT FILING THE SAME BEFORE THE ASSESSING OFFICER AND THE COMMISSIONER OF INCOME TAX (APPEALS). NON-FILING OF AUDIT REPORT INADVERTENTLY BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) CANNOT BE CONSIDERED AS SUFFICIENT CAUSE WHEN THE ASSESSING OFFICER HAS SPECIFICALLY TA KEN A GROUND TO DISALLOW DEDUCTION TO THE ASSESSEE FOR NON-FILING OF AUDIT REPORT BEFORE HIM. THE ASSESSEE HAS BEEN NEGLIGENT AND CALLOUS IN PURSUING HIS CAUSE BEFORE THE AUTHORITIES BELOW. 15. THUS, IN THE FACTS OF THE CASE AND DOCUMENTS ON REC ORD, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS FAILED TO S HOW THAT HE IS ENGAGED IN THE INTEGRATED BUSINESS OF HANDLING, STORAGE AN D TRANSPORTATION OF FOOD GRAINS AND THUS, THE ASSESSEE IS NOT ELIGIBLE FOR CLAIM DEDUCTION U/S. 80IB(11A) OF THE ACT. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO. 863/PN/2012 (REVENUES APPEAL) 17. THE REVENUE IN ITS APPEAL HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING THE DISALLOWANCE MADE BY ASSESSING OFFICER U/S. 40(A)(3) ON ACCOUNT OF CASH PAYMENT MADE BY THE ASSESSEE. THE REVENUE HAS ALSO ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN TREATING SHRI PRASHANT JAKITE, SHRI SONAJI T RIMBAKRAO BEDKE, SHRI SHEIKH RASHID SHAIKH CHAND AND SHRI SIDDHESHWA R KONDIBA SONTAKKE AS AGENTS OF THE ASSESSEE THROUGH WH OM CASH PAYMENTS WERE MADE BY THE ASSESSEE. 13 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 18. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS MADE PA YMENTS TO THE COMMISSION AGENTS/TRADERS AND NOT TO THE FARMERS. THUS, THE CASH PAYMENTS MADE BY THE ASSESSEE WOULD NOT FALL WITHIN THE EXCEPTIONS PROVIDED UNDER RULE 6DD (E) AND (K) OF THE INCOME TAX RULES. 19. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT THE PERSONS NAME IN THE APPEAL FILED BY DEPARTMEN T ARE NOT TRADERS BUT ARE FACILITATORS. THE ASSESSEE PURCHASES T HE AGRICULTURAL PRODUCE FROM FARMERS THROUGH THEM AND MAKE DIRECT PAYM ENT TO THE FARMERS. IN RETURN THE AFORESAID PERSONS CHARGE THEIR C OMMISSION FOR FACILITATING THE SALE AND PURCHASE. THE AFORESAID PERSONS D O NOT PURCHASE THE PRODUCE FROM FARMERS FOR FURTHER SALE TO THE CONSUME RS. 20. BOTH SIDES HEARD. DURING THE FIRST APPELLATE PROCEEDIN GS THE ASSESSEE MADE SUBMISSIONS IN RESPECT OF DISALLOWANCE OF CAS H PAYMENTS U/S. 40(A)(3). THE COMMISSIONER OF INCOME TAX (APP EALS) FORWARDED THE SAME TO ASSESSING OFFICER FOR HIS REPORT. I N THE REPORT THE ASSESSING OFFICER FURNISHED HIS COMMENTS IN RESPECT OF FOUR PERSONS I.E. SHRI PRASHANT JAKITE, SHRI SONAJI TRIMBAKRAO BEDKE, SHRI SHEIKH RASHID SHAIKH CHAND AND SHRI SIDDHESHWAR KONDIBA SONTAKK E. THE ASSESSING OFFICER HAS CATEGORICALLY STATED THAT THE PAYME NTS ARE MADE BY THE ASSESSEE TO THE FARMERS THROUGH THEM. THE ASS ESSING OFFICER HAS NOT STATED ANYWHERE IN THE REPORT THAT THE ASSES SEE HAS PURCHASED AGRICULTURAL PRODUCE FROM THESE PERSONS. THE ASSESSING O FFICER HAS FURTHER STATED THAT THE ASSESSEE HAS PAID COMMISSION TO THE ABOVE MENTIONED FOUR PERSONS. THE COMMISSIONER OF INCOME TAX (A PPEALS) AFTER CONSIDERING THE OBSERVATIONS OF THE ASSESSING OFFICER DELETED THE DISALLOWANCE U/S. 40(A)(3) IN RESPECT OF CASH PAYMENTS TO TH E TUNE OF ` 61,38,831/-. AFTER PERUSING THE DOCUMENTS ON RECORD, WE ARE OF THE 14 ITA NOS. 829 & 863/PN/2012, A.Y. 2008-09 CONSIDERED VIEW THAT THE COMMISSIONER OF INCOME TAX (APPE ALS) WAS JUSTIFIED IN DELETING THE DISALLOWANCE U/S. 40(A)(3) OF THE ACT. THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) IS WELL R EASONED AND DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE A PPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 21. IN THE RESULT, THE APPEAL OF THE ASSESSEE, AS WELL AS, T HAT OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 11 TH DAY OF MARCH, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 11 TH MARCH, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A), AURANGABAD 4. ' / THE CIT, AURANGABAD 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE