Income Tax Officer, Ward -4, Margao v. M/s Vrushal Estate & Devlopment Pvt. Ltd., Goa

ITA 216/PAN/2014 | 2010-2011
Pronouncement Date: 25-11-2014 | Result: Partly Allowed

Appeal Details

RSA Number 21624114 RSA 2014
Assessee PAN AACCV9801D
Bench Panaji
Appeal Number ITA 216/PAN/2014
Duration Of Justice 4 month(s) 29 day(s)
Appellant Income Tax Officer, Ward -4, Margao
Respondent M/s Vrushal Estate & Devlopment Pvt. Ltd., Goa
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2014
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 25-11-2014
Date Of Final Hearing 25-11-2014
Next Hearing Date 25-11-2014
Assessment Year 2010-2011
Appeal Filed On 26-06-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH PANAJI BEFORE SHRI P.K. BANSAL HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA HONBLE JUDICIAL MEMBER ITA NO. 216/PNJ/2014 : (ASST. YEAR : 2010 - 11) INCOME TAX OFFICER WARD - 4 MARGAO GOA (APPELLANT) PAN : AACCV9801D VS. M/S. VRUSHAL ESTATE AND DEVELOPMENT PVT. LTD. PLOT NO. SC - 1/44 VERNA ELECTRONIC CITY VERNA GOA (RESPONDENT) ASSESSEE BY : R.K. PIKALE REVENUE BY : SMT. ASHA DESAI DR DATE OF HEARING : 25/11/2014 DATE OF PRONOUNCEMENT : 25/11/2014 O R D E R PER P.K. BANSAL 1. THIS APPEAL HAS BEEN FILED AGAINST THE ORDER OF CIT(A) DT. 19.3.2014 BY TAKING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE LD. CIT(A) HAS ERRED IN ALLOWING RELIEF OF AMOUNTING TO RS.28 80 670/ - BEING ADDITION MADE BY THE AO AS INCOME FROM RUBBER PLANTATION WHICH W AS HELD AS NOT BEING ENTITLED TO EXEMPTION U/S. 10(1) OF THE ACT. 3. THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE COMPANY WAS NEWLY INCORPORATED AND HAD NOT CARRIED OUT ANY OF THE ACTIVITIES THAT HAVE BEEN DEFINED AS CONSTITUTING AGRICUL TURAL AS LAID DOWN IN VARIOUS JUDICIAL PRONOUNCEMENTS. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATES TO DELETION OF ADDITION OF RS.28 80 670/ - BEING INCOME FROM RUBBER PLANTATION TREATED AS AGRICULTURAL INCOME U/S 10(1). 2 ITA NO. 216/PNJ/2014 (ASST. YEAR : 2010 - 11) 3. WE HEARD THE RIVAL SUBM ISSIONS AND CAREFULLY CONSIDERED THE SAME. WE NOTED THAT UNDER RULE 7(A) ONLY 35% OF INCOME FROM RUBBER CAN BE TREATED AS INCOME FROM BUSINESS. THIS RULE READS AS UNDER : 7A. INCOME FROM THE MANUFACTURE OF RUBBER. (1) INCOME DERIVED FROM THE SALE OF CENTRIFUGED LATEX OR CENEX OR LATEX BASED CREPES (SUCH AS PALE LATEX CREPE) OR BROWN CREPES (SUCH AS ESTATE BROWN CREPE RE - MILLED CREPE SMOKED BLANKET CREPE OR FLAT BARK CREPE) OR TECHNICALLY SPECIFIED BLOCK RUBBERS MA NUFACTURED OR PROCESSED FROM FIELD LATEX OR COAGULUM OBTAINED FROM RUBBER PLANTS GROWN BY THE SELLER IN INDIA SHALL BE COMPUTED AS IF IT WERE INCOME DERIVED FROM BUSINESS AND THIRTY - FIVE PER CENT. OF SUCH INCOME SHALL BE DEEMED TO BE INCOME LIABLE TO TAX. IN VIEW OF THE AFORESAID RULE ONLY 65% OF THE INCOME CAN BE TREATED AS AGRICULTURAL INCOME AND ACCORDINGLY THE ASSESSEE WILL BE ENTITLED FOR EXEMPTION U/S 10(1) ON 65% OF RS.28 80 668/ - . WE THEREFORE SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE AO TO ALLOW THE EXEMPTION TO THE ASSESSEE ONLY TO THE EXTENT OF 65% OF RS.28 80 668/ - U/S 10(1) AS THE SAID INCOME WILL BE TREATED AS INCOME DERIVED FROM AGRICULTURE. REST OF THE INCOME BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS. WE HAVE ALSO GONE TH ROUGH THE DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF BHARAT TIMBER TRADING CO. V S . CIT 296 ITR 676. IN OUR OPINION THIS DECISION WILL NOT ASSIST THE REVENUE AS THIS DECISION RELATES TO A PERSON WHO WAS A DEALER IN TIMBER. 4. IN THE RESUL T THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED. 5. ORDER PRONOUNCED IN THE OPEN COURT ON 25/11/2014. S D / - (D.T.GARASIA) JUDICIAL MEMBER S D / - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI / GOA DATED : 2 5 /11/ 201 4 *SSL* 3 ITA NO. 216/PNJ/2014 (ASST. YEAR : 2010 - 11) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT(A) (5) D.R (6) GUARD FILE TRUE COPY BY ORDER