SHRI KAILA DEVI ICE & COLD STORAGE, AGRA v. INCOME TAX OFFICER -4(4) , AGRA

ITA 04/AGR/2015 | 2009-2010
Pronouncement Date: 30-11-2017 | Result: Dismissed

Appeal Details

RSA Number 0420314 RSA 2015
Assessee PAN AAZFS2787H
Bench Agra
Appeal Number ITA 04/AGR/2015
Duration Of Justice 2 year(s) 10 month(s) 28 day(s)
Appellant SHRI KAILA DEVI ICE & COLD STORAGE, AGRA
Respondent INCOME TAX OFFICER -4(4) , AGRA
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 30-11-2017
Assessment Year 2009-2010
Appeal Filed On 02-01-2015
Judgment Text
FIT FOR PUBLICATION SD/ - J.M. IN THE INCOME TAX APPELLATE TRIBUNAL AGRA (SMC) BENCH: AGRA BEFORE S HRI A. D. JAIN JUDICIAL MEMBER I.T.A NO. 04 /AGRA/201 5 (ASSESSMENT YEAR - 20 09 - 1 0 ) SHRI KAILA DEVI ICE & COLD STORAGE 19 - 20 ADESH NAGAR SHEETLA ROAD KHANDARI AGRA. PAN NO. A AZFS2787H (ASSESSEE) IT O - 4 ( 4 ) AGRA . (R EVENUE ) ASSESSEE BY SHRI R.C. TOMAR AR REVENUE BY SHRI WASEEM ARSHAD SR.DR. ORDER THIS IS ASSESSEES APPEAL FOR ASSESSMENT YEAR 20 09 - 1 0 TAK ING THE FOLLOWING GROUND S : 1. THAT THE CIT (A) HAS ERRED ON FACTS AND IN LAW TO APPRECIATE THAT COLD STORAGE HAS BEEN HELD TO BE ENGAGED IN BUSINESS OF COLD CHAIN FACILITY PROVIDING ENHANCED FOOD SECURITY AND AGRICULTURAL DEVELOPMENT UP GRADATION AND MODERNIZING OF INFRASTRUCTURE FOR STORAGE HANDLING AND PROVIDING FACILITY WITH REFRIGERATION BACK TO BACK UP TO CONSUMPTION AND LINKING FARMER AND MARKET WITH SUITABLE TRANSPORTATION AS ALSO WITH GREATER EFFICIENCIES IN THE DATE OF HEARING 2 1 . 11 .2017 DATE OF PRONOUNCEMENT 30 . 1 1 .2017 I.T.A NO. 04 /AGRA/201 5 2 MANAGEMENT SYSTEM AND MINIMIZING POST HARVEST FOOD LOSS. 2. THAT CIT (A) HAS ERRED IN LAW IN NOT CONSIDERING THAT EXEMPTION CLAIMED U/S 80 IB (11A) FOLLOWED BY AUDIT REPORT ON FORM NO. 3CB ALONG WITH CAS REPORT ON FROM NO.10 CCB (UNDER RULE L8 BBB) IS BEING ACCEPTED FROM YEAR TO YEAR SINCE THE INCEPTION OF ASSESEE 'S INDUSTRIAL UNDERTAKING AND THE DISALLOWANCE MADE DURING THE YEAR IS IN VIOLATION OF RATIO LAID DOWN BY THE HONORABLE SUPREME COURT IN THE CASE OF RADHA SOAMI SATSANG. 3. THAT THE LEARNED CIT APPEAL HAS ERRED ON FACTS AND IN LAW IN APPLYING THE RATIO OF DECISION DELIVERED IN THE CASE OF DELHI COLD STORAGE WHICH WAS EXCLUSIVELY ON THE ISSUE OF PROCESSING OF GOODS AND WAS DELIVERED ON THE STATUTE INTRODUCED PRIOR TO INTRODUCTION OF SEC. 80IB (11A) BY FINANCE ACT 2001 W.E.F. 01.4.2002 AND WAS NOT SUBJECT M ATTER OF ADJUDICATION BEFORE THE HONORABLE SUPREME COURT. 2. THE AO MADE ADDITION OF RS.13 75 990/ - AFTER DISALLOWING THE ASSESSEES CLAIM OF DEDUCTION U/S 80IB (11A) OF THE IT ACT HAVING FOUND THAT THE ASSESSEE HAD NOT FULFILLED THE CONDITIONS CONTAINE D IN THE SAID SECTION. THE LD. CIT(A) HAS CONFIRMED THE ADDITION. 3. THE ASSESSEE IS IN FURTHER APPEAL. I.T.A NO. 04 /AGRA/201 5 3 4. I HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. SEC TION 80IB (11A) OF THE ACT READS AS FOLLOWS: 80IB (11A) THE AMOUNT OF D EDUCTION IN A CASE OF AN UNDERTAKING DERIVING PROFIT FROM THE BUSINESS OF PROCESSING PRESERVATION AND PACKAGING OF FRUITS OR VEGETABLES OR MEAT AND MEAT PRODUCTS OR POULTRY OR MARINE OR DAIRY PRODUCTS OR FROM THE INTEGRATED BUSINESS OF PROCESSING STORAGE AND FOOD GRAINS SHALL BE HUNDRED PERCENT OF THE PROF I T AND GAINS DERIVED FROM SUCH UNDERTAKING FOR FIVE ASSESSMENT YEARS BEGINNING WITH THE INITIAL ASSESSMENT YEAR AND THEREAFTER TWENTY - FIVE PERCENT ( OR THIRTY PERCENT WHERE THE ASSESSEE IS A CO MPANY) OF THE PROFITS AND GAINS DERIVED FROM THE OPERATION OF SUCH BUSINESS IN A MANNER THAT THE TOTAL PERIOD OF DEDUCTION DOES NOT EXCEED TEN CONSECUTIVE ASSESSMENT YEARS AND SUBJECT TO FULFILLMENT OF THE CONDITION THAT IT BEGINS TO OPERATE SUCH BUSINESS ON OR AFTER THE 1ST DAY OF APRIL 2001. 5 . THUS FOR BEING ENTITLED TO DEDUCTION U/S 80IB(11A) AS PER THIS SECTION AS APPLICABLE TO THE PRESENT CASE THE ASSESSEE NEEDS TO BE AN UNDERTAKING DERIVING PROFIT FROM THE BUSINESS OF PROCESSING PRESERVATION A ND PACKAGING OF FRUITS AND VEGETABLES FROM THE INTEGRATED BUSINESS OF HANDLING STORAGE AND TRANSPORTATION OF FOOD - GRAINS HAVING BEGUN TO OPERATE SUCH BUSINESS ON OR AFTER 1.04.2001. 6 . THE ASSESSEE IS IN THE BUSINESS OF COLD STORAGE OF POTATOES HAVING BEGUN ITS OPERATIONS FROM 15.01.2005. THE DATE OF COMMENCEMENT OF BUSINESS BY THE I.T.A NO. 04 /AGRA/201 5 4 ASSESSEE IS THUS AS PER THE REQUIREMENT OF SECTION 80IB (11A). THE OTHER REQUIREMENTS OF THE SECTION ARE PROCESSING PRESERVATION PACKAGING HANDLING STORAGE AND TRANSPOR TATION OF FOOD - GRAINS IN THE ASSESSEES CASE POTATOES. S O FAR AS REGARDS THE REQUIREMENT OF PROCESSING IN DELHI COLD STORAGE (P) LTD. VS. CIT 191 ITR 656 (SC) IT HAS BEEN HELD THAT STORING O F GOODS IN A COLD STORAGE DOES NOT INVOLVE ANY PROCESSING BECAUSE PROCESSING INVOLVES BRINGING INTO EXISTENCE A SUBSTANCE DIFFERENT FRO M WHAT THE MATERIAL WAS AT THE TIME OF COMMENCEMENT OF THE PROCESS; AND THAT I N CASE OF STORAGE OF POTATO ES IN A COLD STORAGE WHAT IS STORED IN THE COLD STORAGE IS POTATO AND WH AT IS BROUGHT OUT FROM THE COLD STORAGE IS ALSO POTATO AND THEREFORE THERE IS NO CHANGE IN THE SUBSTANCE OF THE MATE RI AL STORED IN THE COLD STORAGE AND HENCE SUCH STORING OF POTATO IN COLD STORAGE CANNOT BE SAID TO BE PROCESSING. THE AUTHORITIES BELOW HA VE CONCURRENTLY FOLLOWED DELHI COLD STORAGE(SUPRA) AGAINST THE ASSESSEE IN THIS REGARD. NO CONTRARY DECISION HAS BEEN BROUGHT TO MY NOTICE. 7 . THE ASSESSEE HAS ALSO NOT BEEN FOUND TO DO ANY PACKAGING HANDLING OR TRANSPORTATION OF POTATOES. THE LD. CIT( A) HAD CALLED FOR A REMAND REPORT FROM THE AO AND THE AO FURNISHED A REMAND REPORT TO THIS EFFECT. IN PARA 5.3 OF THE IMPUGNED ORDER THE LD. CIT(A) HAS OBSERVED THAT THE DECISION OF THE AO AS DISCUSSED IN THE ASSESSMENT ORDER IS WITH RESPECT TO REJECTIN G DEDUCTION U/S 80IB(11A) BUT THE LD. AR PRESENTED THE CASE OF THE ASSESSEE TO PLEAD FOR ITS I.T.A NO. 04 /AGRA/201 5 5 ELIGIBILITY FOR DEDUCTION U/S 80IB(11) AND NOWHERE ANY ARGUMENT HA D BEEN PUT BY HIM TO COUNTER THE FINDING OF THE AO REJECTING THE ELIGIBILITY OF THE ASSESSEE FO R DEDUCTION U/S 80IB(11A). 8 . THIS OBSERVATION OF THE LD. CIT(A) HAS NOT BEEN REBUTTED BEFORE ME. IN FACT AS PER P A RA 5.5 OF THE IMPUGNED ORDER: 5.5 AS REGARD TO PACKAGING IT IS VERY CLEAR THAT THE ASSESSEE IS NOT DOING ANY PACKAGING OF POTATO AND IT IS ALSO NOT PROVIDING ANY TRANSPORTATION FACILITY. THIS FACT HAS ALSO BEEN CLEARLY ADMITTED BY THE LD. AR IN HIS REJOINDER FILED ON 20.03.2014 IN WHICH IT HAS BEEN STATED BY HIM THAT THE POTATO IS TRANSPORTED UP TO COLD STORAGE PLATFORM BY THE FARMERS THROUGH THEIR TRACTORS TROLLEYS TRUCKS WHATEVER MODES ARE AVAILABLE. HE FURTHER MENTIONED THAT IT IS THE COMMON PRACTICE THAT THE POTATO IS TRANSPORTED UP TO COLD STORAGE BY THE FARMERS SOON AFTER DIGGING FROM THE AGRICULTURE FIELD AND IS UNLOADED AT THE PLATFORM IN GUNNY BAGS. 9 . AGAIN DELHI COLD STORAGE (SUPRA) TO WHICH AS OBSERVED THERE IS NO COUNTER HAS BEEN FOLLOWED BY BOTH THE AUTHORITIES BELOW. 1 0 . AS CORRECTLY OBSERVED BY THE LD. CIT(A) THOUGH THE ASSESSEE BEING ENGAGED IN THE RUNNING OF A COLD STORAGE CAN BE SAID TO BE DOING THE BUSINESS OF PRESERVATION HANDLING AND STORAGE OF FRUITS AND VEGETABLES HOWEVER AS IT IS NOT DOING ANY PROCESSING PACKAGING OR TRANSPORTATION THEREOF IT IS NOT ELIGIBLE FOR ANY I.T.A NO. 04 /AGRA/201 5 6 BENEFIT U/S 80IB(11A). T HE S ECTION REQUIRES ALL THE CONDITIONS MENTIONED THEREIN TO BE FULFILLED CONJOINTLY FOR AN ASSESSEE TO BE ENTITLED TO AVAIL OF THE DEDUCTION MADE AVAILABLE BY THE PROVISION. THESE CONDITIONS HAVE NOT BEEN SHOWN TO BE MUTUALLY EXCLUSIVE. THE ASSESSEE AS OBSERV ED H AS NOT FULFILLED ALL THESE CONDITIONS. 1 1 . IN VIEW OF THE ABOVE FINDING NO FORCE IN THE GRIEVANCE SOUGHT TO BE RAISED BY THE ASSESSEE THE SAME IS REJECTED. THE WELL REASON ED ORDER OF THE LD. CIT(A) IS CONFIRMED. 1 2 . IN THE RESULT THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 / 1 1 /2017. SD/ - (A.D. JAIN) JUDICIAL MEMBER DATED 30 / 1 1 /2017 *AKV* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR