The DCIT, Circle-1(1), Guntur v. M/s Chebrolu Agros Pvt. Ltd., Guntur

ITA 549/V/09 435/V/10 CHEBROLU AGROS P LTD GUNTUR IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO. 549 /VIZAG/ 20 09 ASSESSMENT YEAR : 2006 - 07 DCIT CIRCLE - 1(1) G UNTUR M/S. CHEBROLU AGROS (P) LTD GUNTUR (APPELLANT) VS. (RESPONDENT) PAN NO.AACCC 4573F ITA NO. 435 /VIZAG/20 1 0 ASSESSMENT YEAR : 200 7 - 0 8 DCIT CIRCLE - 1(1) GUNTUR M/S. CHEBROLU AGROS (P) LTD GUNTUR (APPELLANT) VS. (RESPONDENT) PAN NO.AACCC 457 3F APPELLANT BY: SHRI TH.L.PETER CIT(DR) & SHRI J. SIRI KUMAR SR. DR RESPONDENT BY: SHRI G.V.N. HARI CA ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER : - THESE APPEALS ARE PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) ON FOLLOWING COMMON GROUNDS: 1. THE CIT(A) HAS ERRED IN BOTH LAW AND IN FACTS OF CASE. 2. THE LD. CIT(A) OUGHT TO HAVE CONFIRMED THE DISALLOWANCE MADE OWING TO THE FACT THAT THE ASSESSEE HIMSELF IN THE RETURN OF INCOME HAS STATED ITS ACTIVITY AS NOT MANUFACTURING AND AS PER THE AN NEXURES ENCLOSED TO THE AUDIT REPORT REVEALED THAT THERE WAS NO MANUFACTURING ACTIVITY CARRIED ON BY THE ASSESSEE COMPANY. 3. THE CIT(A) OUGHT NOT TO HAVE BASED ON THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF CIT VS. PREMIER TOBACCO PACKERS PVT. LTD. (284 ITR 222) SINCE DIFFERENT HIGH COURT HAVE DELIVERED DIFFERENT VIEWS ON THE QUESTION. 4. THE CIT(A) OUGHT TO HAVE CONSIDERED THE CASE LAWS RELIED ON WHILE DECIDING THE ACTIVITY OF THE ASSESSEE AS NOT MANUFACTURING IN THE ASSESSMENT ORDER. 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 2. THE CLAIM RAISED BY THE ASSESSEE RELATE TO THE HIRE DEPRECIATION ON PLANT AND MACHINERY. ACCORDING TO THE ASSESSEE THE ASSESSEE IS INVOLVED IN ITA 549/V/09 435/V/10 CHEBROLU AGROS P LTD GUNTUR 2 MANUFACTURING ACTIVITY BUT THE REVENUE DID NOT ACCEPT THE CLAIM OF THE ASSESSEES AND HE ALLOWED THE NORMAL DEPRECIATION ON THE PLANT AND MACHINERY. MATTER WENT TO THE CIT(A) AND CIT(A) HAS EXAMINED THE ISSUE IN THE LIGHT OF THE JUDGEMENT OF THE MADRAS HIGH COURT IN THE CASE OF CIT VS. PREMIER TOBACCO PACKERS PVT. LTD. 284 ITR 222 IN WHICH IT HAS BEEN HELD THAT T HRESHING AND REDRYING OF TOBACCO IS A MANUFACTURING ACTIVITY AND IS ELIGIBLE FOR DEDUCTION U/S 80HH OF THE ACT . T HE CIT(A) ALLOWED TH E HIRE DEPRECIATION ON THE PLANT AND MACHINERY. 3. NOW THE REVENUE IS BEFORE US AND PLACED A HEAVY RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THIS MADRAS HIGH COURT JUDGEMENT IS A DIRECT JUDGEMENT ON THE ISSUE INVOLVED THEREFORE IT SHOULD BE FOLLOWED AS NO CONTRARY V IEW HAS BEEN EXPRESSED BY ANY OTHER HIGH COURT. 5. WE HAVE CAREFULLY EXAMINED THE ORDER OF THE CIT(A) AND WE FIND THAT CIT(A) HA S DECIDED THE ISSUE FOLLOWING THE JUDGEMENT OF THIS MADRAS HIGH COURT IN THE CASE OF CIT VS. PREMIER TOBACCO PACKERS PVT. LTD . (SUPRA) WHICH IS THE DIRECT JUDGEMENT ON THE ISSUE INVOLVED. DURING THE COURSE OF HEARING NO OTHER JUDGEMENT OF ANY HIGH COURT IN WHICH A CONTRARY VIEW IS TAKEN IS PLACED BEFORE US. WE THEREFORE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A). ACCORDIN GLY WE CONFIRM HIS ORDER. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 10.2 .20 1 1 SD/ - SD/ - (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DA TED 10 TH FEBRUARY 20 1 1 ITA 549/V/09 435/V/10 CHEBROLU AGROS P LTD GUNTUR 3 COPY TO 1 THE DCIT CIRCLE - 1(1) GUNTUR 2 M/S. CHEBROLU AGROS PVT. LTD. D.NO.1 - 6 - 1 STAMBALAGARUVU GUNTUR 3 THE CI T GUNTUR 4 THE CIT (A) GUNTUR 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM