Plantation Corporation of Keral Ltd, Kottayam V. ACIT, Kottayam

ITA 951/COCH/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4413 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2010
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 04-05-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 20-11-2008
• Court: TRIBUNAL
• Department Lawyers: T J VINCENTJR
• Assessee Lawyers: K I JOHN
• Keywords: Opportunity of being heard; Earning of tax free income; Revised return; Set aside
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NO.951/COCH/2008 ASSESSMENT YEAR:2005-06 PLANTATION CORPORATION OF KERALA LTD., KOTTAYAM. PA NO.AAACT 7596H VS. THE ASST. COMMISSIONE R OF INCOME-TAX, CIRCLE-1, KOTTAYAM. (APPELLANT) ( RESPONDENT ) APPELLANT BY SHRI K.I. JOHN RESPONDENT BY SHRI T.J. VINCENT,JR.DR O R D E R PER N.VIJAYAKUMARAN,J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. CIT(APPEALS)-IV, KOCHI, DATED 30-9 -2008, RELATING TO THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE COMPANY IS A PUBLIC SECTOR UNIT UND ER THE STATE GOVERNMENT OF KERALA. WHILE COMPUTING THE M INIMUM ALTERNATE TAX (MAT) U/S.115JB, THE ASSESSEE HAD ADD ED THE EXPENSES RELATED TO EXEMPTED INCOME, I.E. AGRICULTU RAL INCOME AND SUBTRACTED AGRICULTURAL INCOME. HOWEVE R, WHILE ARRIVING AT THE EXEMPTED INCOME, THE ASSESSEE HAS INTRODUCED THE INCOME FROM RUBBER. SIMILARLY, WHI LE ITA NO. 951/COCH/2008 2 COMPUTING THE EXPENSES TO EARN THE EXEMPTED INCOME, ASSESSEE HAS WORKED OUT EXPENSES RELATED TO RUBBER. THE ASSESSING OFFICER WAS OF THE VIEW THAT IT IS A WRON G CALCULATION, AS UNDER RULE 7B INCOME FROM THE CULTI VATION AND MANUFACTURE OF RUBBER IS TAXABLE. THEREFORE, THE ASSESSING OFFICER WAS OF THE VIEW THAT FROM THE ASS ESSEES COMPUTATION OF EXPENSES RELATED TO EXEMPT INCOME, EXPENSES RELATED TO RUBBER HAS TO BE SUBTRACTED AND EXPENSES RELATED TO OTHER CROPS HAS TO BE ADDED BAC K. ON APPEAL BEFORE THE CIT(APPEALS), IT WAS CONTENDED TH AT THE REVISED COMPUTATION FILED AS PER ANNEXUREII, AS PER THE REVISED RETURN DATED 1-4-2006, WHICH THE ASSESSING OFFICER HAS ACTED UPON WAS NOT VERIFIED PROPERTY BY THE ASS ESSING OFFICER. THERE IS A MISTAKE IN THE COMPUTATION U/ S.115JB AND THIS WAS PROPOSED BY THE ASSESSING OFFICER TO C OMPLETE THE ASSESSMENT BY RECTIFYING THE MISTAKE. HOWEVER , WHILE FINALIZING THE ASSESSMENT, THE LD. ASSESSING OFFICE R HAS TAKEN THE VIEW THAT ALTERNATE TAX INCOME CAN BE ENTERTAIN ED ONLY THROUGH A VALID REVISED RETURN. THIS IS THE GRIEV ANCE PROJECTED. HOWEVER, THE LD. CIT(APPEALS) WAS OF THE VIEW THAT THE APPEAL HAS TO BE DISMISSED AND ACCORDINGLY THE LD. COUNSEL WOULD SUBMIT WITH REFERENCE TO THE ASSESSEE S PAPER BOOK AT PAGE NO.15, WHICH IS THE ORIGINAL RETURN AN D ITA NO. 951/COCH/2008 3 ASSESSEES PAPER BOOK AT PAGE NO.18, I.E. THE SECON D REVISED RETURN AND 115JB COMPUTATION, WHICH IS AVAILABLE IN THE ASSESSEES PAPER BOOK AT PAGE NO.20 CONTENDED THAT EXPLANATION 2 AS UNDER 115JB PERMITS THE ASSESSING OFFICER TO CONSIDER AND COMPUTE THE PROFIT AND LOSS ACCOUNT AS REDUCED BY THE AMOUNT OF INCOME EXEMPTED U/S.10 AS FOUND IN THE EXPLANATION 2. UNDER THE ABOVE CIRCUMSTANC ES, THE LD. COUNSEL WOULD SUBMIT THAT IT IS WITHIN THE POWE R OF THE LD. ASSESSING OFFICER THAT THE BOOK RESULTS CAN BE ADJU STED WITH REFERENCE TO THE PERMISSIBLE LIMITATIONS. THEREF ORE, THE SECOND REVISED RETURN FILED ON 1-4-2006 AS AVAILABL E IN THE ASSESSEES PAPER BOOK PAGE NO.18, WHICH THE ASSESSI NG OFFICER ACTUALLY ACTED UPON BUT FAILED TO CONSIDER THE CLAIM OF THE ASSESSEE. THEREFORE, THE LD. COUNSEL PRAYED F OR ONE MORE OPPORTUNITY AS THERE WAS A MISTAKE COMMITTED, WHICH IS TOTALLY AGAINST THE FACTS AND LAW. THIS MISTAKE WAS RECTIFIED UNDER THE REVISED RETURN. THEREFORE, TO MEET THE ENDS OF JUSTICE, THE ASSESSEE MAY BE GIVEN AN OPPOR TUNITY TO PUT FORTH ITS CASE BEFORE THE LD. ASSESSING OFFICER . 3. ON THE OTHER HAND, THE LD. D.R. STRONGLY OBJECTE D TO THE PROPOSITION AND WE HAVE CONSIDERED RIVAL SUBMISSION S. APPLICABILITY OF RULE 7A IS NOT IN DISPUTE WHEREBY 60% OF THE ITA NO. 951/COCH/2008 4 AGRICULTURAL INCOME SHOULD HAVE BEEN TAKEN FOR THE PURPOSE OF COMPUTATION. THE ASSESSING OFFICER HAS NOT TAK EN THE AGRICULTURAL INCOME CONCEPT. THE DECISION OF THE HONBLE SUPREME COURT RELIED UPON BY THE LD. COUNSEL, IN TH E CASE OF CIT VS.WILLIAMSON FINANCIAL SERVICES & OTHERS (2008) 297 ITR 17, HAS TO BE TAKEN AS AN AID FOR THE PURPOSE O F PROPER ADJUDICATION. UNDER THE ABOVE FACTS AND CIRCUMSTA NCES, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND R EMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WHO WILL DECIDE THE ISSUE AFRESH WITHOUT GETTING INTO INFLUENCED BY THE OBSERVATION IF ANY WE MADE AND THE ASSESSING OFFICE R TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER AFFOR DING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. SD/- SD/- (SANJAY ARORA) (N.VIJAYKUMARAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM, DATED THE 06 TH MAY,2010. PM. ITA NO. 951/COCH/2008 5 COPY FORWARDED TO: 1. PLANTATION CORPORATION OF KERALA LTD., MUTTAMBALAM PO., KOTTAYAM. 2. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-1,KOT TAYAM. 3. CIT(A)-IV, KOCHI. 4. CIT, KOTTAYAM. 5. D.R. BY ORDER SD/- ASSISTANT REGISTRAR