DCIT, Central Circle - III, Kolkata, Kolkata V. M/s. Apeejay Tea Ltd., Kolkata

ITA 901/KOL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54518 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2011
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 15-06-2011
• Court: TRIBUNAL
• Department Lawyers: P S DUTTA
• Assessee Lawyers: MANISH TIWARI
• Section: 28

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH B, KOLKATA () BEFORE , , , , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. .!' !'!' !'. .. . , #$ SHRI C.D.RAO, ACCOUNTANT MEMBER % % % % / ITA NO . 901/KOL/2011 &' ()/ ASSESSMENT YEAR : 2007-08 (+, / APPELLANT ) D.C.I.T., CENTRAL CIRCLE-III, KOLKATA - & - - VERSUS - . (./+,/ RESPONDENT ) M/S. APEEJAY TEA. LTD., KOLKATA (PAN: AACCA 1955 F ) +, 0 1 #/ FOR THE APPELLANT: SHRI P.S.DUTTA ./+, 0 1 #/ FOR THE RESPONDENT: SHRI MANISH TIWARI #2 / ORDER ( (( ( . .. .!' !'!' !'. .. . ) )) ), , , , #$ PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER DATED 17.03.2011 OF THE CIT(A)-CENTRAL-I, KOLKATA PERTAINING TO A.YR. 2007- 08. 2. THE SOLE ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS RELATING TO DELETION OF DISALLOWANCE OF RS.1,75,78,282/- TOWARDS CESS PAYAB LE BY THE ASSESSEE COMPANY TO THE STATE GOVERNMENT ON CULTIVATION OF GREEN TEA LE AVES. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE AO W HILE DOING THE SCRUTINY ASSESSMENT DISALLOWED AN AMOUNT OF RS.1,75,78,282/- ON ACCOUNT OF CESS ON GREEN LEAF BY OBSERVING AS UNDER :- IT IS FOUND THAT A TOTAL SUM OF RS.1,75,78,282/- O N ACCOUNT OF CESS ON GREEN LEAF WAS DEBITED TO THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH, 2007. THE CESS ON 2 GREEN LEAF IS LEVIED BY THE AGRICULTURAL INCOME TAX OFFICER OF THE GOVT. OF ASSAM ON AGRICULTURAL INCOME FROM CULTIVATION OF GREEN LEAF. THUS IT IS APPARENTLY ALLOWABLE AS A DEDUCTION AGAINST THE AGRICULTURAL INCOME ONLY WHIC H IS COMPUTED AS PER RULE 8 OF THE INCOME TAX RULES, AT 60% OF THE COMPOSITE INCOME. M OREOVER, THE SAID 60% OF COMPOSITE INCOME FROM GROWING OF GREEN TEA LEAVES AND MANUFACTURING OF BLACK TEA IS EXEMPT FROM INCOME-TAX BEING AGRICULTURAL INCOME . ONLY 40% OF THE COMPOSITE INCOME IS CHARGEABLE TO INCOME-TAX U/S 28 OF THE IT ACT, 1961. HOWEVER IT IS OBSERVED THAT THE ASSESSEE COMPANY CLAIMED THE ENTI RE EXPENDITURE OF RS.1,75,78,282/- BEFORE APPLYING THE PROVISIONS OF RULE-8. UNDER THESE CIRCUMSTANCES, THE PROPORTIONATE CLAIM FOR DEDUCTIO N OF CESS ON GREEN LEAF AGAINST THE NON-AGRICULTURAL COMPONENT OF THE COMPOSITE INCOME FROM THE BUSINESS OF CULTIVATION OF GREEN LEAF AND MANUFACTURE OF BLACK TEA IS NOT A LLOWED AND ADDED BACK. 3.1. ON APPEAL THE LD. CIT(A) DISALLOWED THE SAME B Y RESPECTFULLY FOLLOWING THE ORDER OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF AFT INDUSTRIES LTD. VS CIT (270 ITR 167). 4. THE LD. DR APPEARING ON BEHALF OF THE REVENUE RE LIED ON THE ORDER OF THE AO. ON THE OTHER HAND, THE LD.COUNSEL FOR THE ASSESSEE REL IED ON THE ORDERS OF THE LD. CIT(A). 5. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD, KEEPING IN VIEW OF THE FACT TH AT THE ISSUE IS CONCLUDED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF CIT VS AFT INDUSTRIES LTD. 270 ITR 167 (CAL) WHERE THE AMOUNT PAID AS CESS WAS HEL D AS ELIGIBLE FOR DEDUCTION IN COMPUTING THE COMPOSITE INCOME UNDER RULE 8 OF I.T. RULES. THIS ISSUE IS, THEREFORE, DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE BY UPHOLDING THE ORDER OF THE C.I.T.(A) WHO HAS ALLOWED THE DEDUCTION OF PAYMENT OF CESS ON GREEN LEAVES IN COMPUTING THE COMPOSITE INCOME FROM TEA BUSINESS OF THE ASSESSEE UNDER RULE 8 OF THE I.T. RULES. WE MAY FURTHER MENTION THAT IDENTICAL ISSUE WAS THE SUBJECT MATTER OF APPEAL BEFORE THE TRIBUNAL IN THE CASE OF M/S.EMPIRE PLANT ATIONS (INDIA) LTD. AND THE TRIBUNAL VIDE ORDER DATED 28.2.2005 IN I.T.A.NO.1600 (KOL)/2 004 FOR A.Y. 2000-01 HAS ALLOWED THE CLAIM OF THE ASSESSEE. 5.1. THE FACT THAT THE SLP IS PENDING BEFORE THE HONBLE SUPREME COURT AGAINST THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN RESPECT OF AFT INDUSTRIES LTD. VS CIT (270 ITR 167) WILL NOT HAVE ANY EFFECT SINCE TH E HONBLE APEX COURT HAS NEITHER SET ASIDE THE ORDERS OF THE CALCUTTA HIGH COURT NOR GRANTED ANY STAY. 3 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.09.2011. SD/- SD/- , , , , MAHAVIR SINGH, JUDICIAL MEMBER . .. .!' !'!' !'. .. . , ,, , #$ #$ #$ #$ , C.D.RAO, ACCOUNTANT MEMBER. ( (( ('$ '$ '$ '$) )) ) DATE: 05.09.2011 #2 0 .3 4#3(5- COPY OF THE ORDER FORWARDED TO: 1. M/S. APEEJAY TEA. LTD., APEEJAY HOUSE, 15, PARK S TREET, KOLKATA-700016. 2 THE DCIT, CENTRAL CIRCLE-III, KOLKATA 3. THE CIT, 4. THE CIT(A)-CENTRAL-I, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA /3 ./ TRUE COPY, #2&:/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.)