Environment Technologies & Systems,, Gurgaon v. ITO, Gurgaon

ITA 3646/DEL/2009 | 2006-2007
Pronouncement Date: 28-01-2010 | Result: Allowed

Appeal Details

RSA Number 364620114 RSA 2009
Bench Delhi
Appeal Number ITA 3646/DEL/2009
Duration Of Justice 5 month(s) 1 day(s)
Appellant Environment Technologies & Systems,, Gurgaon
Respondent ITO, Gurgaon
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 28-01-2010
Date Of Final Hearing 28-01-2010
Next Hearing Date 28-01-2010
Assessment Year 2006-2007
Appeal Filed On 26-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI RAJPAL YADAV JM AND SHRI R.C.SHARMA A M ITA NO.3646/DEL/2009 ASSESSMENT YEAR : 2006-07 M/S ENVIRONMENT TECHNOLOGIES & SYSTEMS B-477 SUSHANT LOK-1 GURGAON. PAN NO.AABFE9670R. VS. INCOME TAX OFFICER WARD-2 GURGAON. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANOJ ARORA ADVOCATE. RESPONDENT BY : SHRI MANOJ GUPTA & MS.BANITA DEVI DRS. ORDER PER R.C.SHARMA AM : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A) DATED 1.7.2009 FOR AY 2006-07 IN THE MATTER OF ORDER PAS SED U/S 143(3) OF THE IT ACT. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. ONLY GRIEVANCE OF THE ASSESSEE RELATES TO DISALLOWANCE OF DEDUCTION C LAIMED U/S 80JJA OF THE IT ACT. FACTS IN BRIEF ARE THAT THE ASSESSEE FILED RETURN D ECLARING INCOME OF RS.32 277/- ON 31.10.2006. THE ASSESSEE DERIVES INCOME FROM TREAT MENT OF BIODEGRADABLE WASTE BY USING CULTIVATION OF LIVE MICRO ORGANISM SUCH AS BACTERIA FUNGI ETC. THE AO HAS MENTIONED THAT THE ASSESSEE CLAIMED DEDUCTION U /S 80JJA OF THE IT ACT AT RS.93 209/-. THE ASSESSEE DOES NOT HAVE ANY PLANT AND MACHINERY AND BUILDING WHERE THE BUSINESS ACTIVITY OF THE ASSESSEE WAS CON DUCTED. BEFORE THE AO THE ASSESSEE STATED THAT IT WAS ENGAGED IN PROVIDING TH E SERVICES OF TREATMENT OF BIODEGRADABLE WASTE BY WAY OF EXECUTING THE CONTRAC TUAL AND SCIENTIFIC WORK OF VARIOUS PARTIES AT THEIR PREMISES. THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE ON THE GROUND THAT NO SALE OR PURCHASE OF BIODEGRADABLE WASTE WAS UNDERTAKEN. ITA-3646/DEL/2009 2 3. BY THE IMPUGNED ORDER THE CIT(A) OBSERVED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF COLLECTING OR PROCESSING OR TREATIN G OF BIODEGRADABLE WASTE. HOWEVER NO EVIDENCE HAS BEEN FILED BY THE ASSESSEE THAT THE TREATMENT OF BIODEGRADABLE WASTE CARRIED OUT BY IT RESULTS IN GE NERATION OF POWER OR PRODUCING BIO FERTILIZERS BIO PESTICIDES OR OTHER BIOLOGICAL AGENTS OR FOR PRODUCING BIO GAS OR MAKING PELLETS OR BRIQUETTES FOR FUEL OR ORGANIC MA NURE. THIS IS AN ESSENTIAL CONDITION TO BE FULFILLED FOR CLAIMING DEDUCTION U/ S 80JJA. SINCE THE ASSESSEE HAS FAILED TO FULFILL THE SECOND CONDITION MENTIONED IN SECTION 80JJA THE AO IS JUSTIFIED IN DISALLOWING THE DEDUCTION U/S 80JJA AM OUNTING TO RS.93 209/-. 4. AGGRIEVED BY THE ABOVE ORDER THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. IT WAS CONTENDED BY THE LEARNED AR THAT INSPITE OF THE FINDING RECORDED BY THE CIT(A) TO THE EFFECT THAT ASSESSEE WAS IN THE BUSIN ESS OF COLLECTING OR PROCESSING OF BIODEGRADABLE WASTE THE DEDUCTION CLAIMED U/S 8 0JJA WAS DECLINED. 5. ON THE OTHER HAND LEARNED DR RELIED ON THE ORDE RS OF THE LOWER AUTHORITIES AND CONTENDED THAT ALL THE CONDITIONS STIPULATED U/ S 80JJA WERE NOT COMPLIED WITH INSOFAR AS IT RELATED TO THE TREATMENT OF BIODEGRAD ABLE WASTE CARRIED OUT BY THE ASSESSEE RESULTS IN GENERATION OF POWER OR PRODUCIN G BIO FERTILIZERS ETC. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOU ND FROM THE RECORD THAT ASSESSEES CLAIM FOR DEDUCTION U/S 80JJA HAS BEEN D ECLINED BY THE AO ON THE PLEA THAT NO SALE OR PURCHASE OF BIODEGRADABLE WASTE WAS UNDERTAKEN BY THE ASSESSEE. HOWEVER THE CIT(A) NEGATED THIS FINDING OF THE AO AND OBSERVED THAT ASSESSEE WAS ENGAGED IN THE BUSINESS OF COLLECTING OR PROCES SING OF BIODEGRADABLE WASTE. HOWEVER WE FOUND THAT THE OTHER CONDITION OF SECTI ON 80JJA WITH REGARD TO TREATMENT OF BIODEGRADABLE WASTE RESULTING INTO GEN ERATION OF POWER HAS NOT BEEN COMPLIED WITH BY THE ASSESSEE THEREFORE CIT(A) HAS DECLINED THE ASSESSEES CLAIM. THE PROVISIONS OF SECTION 80JJA READ AS UNDER:- ITA-3646/DEL/2009 3 WHERE THE GROSS TOTAL INCOME OF ANY ASSESSEE INCLU DES ANY PROFIT AND GAINS DERIVED FROM THE BUSINESS OF COLLECTING A ND PROCESSING OR TREATING OF BIODEGRADABLE WASTE FOR GENERATING POWE R OR PRODUCING BIO FERTILIZERS BIO PESTICIDES OR OTHER BIOLOGICAL AGENTS OR FOR PRODUCING BIO GAS OR MAKING PELLETS OR BRIQUETTES F OR FUEL OR ORGANIC MANURE THERE SHALL BE ALLOWED DEDUCTION OF AN AMOUN T EQUAL TO THE WHOLE OF THE SUCH PROFIT AND GAINS. 7. IT IS CRYSTAL CLEAR FROM THE ABOVE DEFINITION OF SECTION 80JJA THAT ASSESSEE SHOULD BE IN THE BUSINESS OF COLLECTING AND PROCESS ING OF BIODEGRADABLE WASTE. IN ADDITION TO ASSESSEE BEING IN THE BUSINESS OF PROCE SSING OF BIODEGRADABLE WASTE THE WASTE SO GENERATED SHOULD BE UTILIZED FOR GENER ATING POWER OR PRODUCING BIO FERTILIZERS BIO PESTICIDES OR FOR PRODUCING BIO GA S TO QUALIFY FOR DEDUCTION U/S 80JJA. THE AO HAS FOUND FAULT WITH FIRST CONDITION WHEREAS NO ADVERSE FINDING WAS THERE WITH REGARD TO SECOND CONDITION. THE CIT (A) HAD NEGATED THE FINDING OF AO IN RESPECT OF FIRST CONDITION. AS PER OUR CONSI DERED VIEW ALL THE CONDITIONS OF SECTION 80JJA ARE TO BE TESTED AT A TIME. IN THE I NTEREST OF JUSTICE AND FAIR PLAY WE RESTORE THE ENTIRE APPEAL TO THE FILE OF THE AO FOR DECIDING AFRESH ASSESSEES ELIGIBILITY FOR CLAIM OF DEDUCTION U/S 80JJA IN TE RMS OF OUR OBSERVATIONS CONTAINED HEREINABOVE. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY 2010. SD/- SD/- (RAJPAL YADAV) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28.01.2010. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT DEPUTY REGISTRAR ITA-3646/DEL/2009 4