DCIT, Circle, Panchkula v. M/s Haryana Agro Industries Corporation Ltd., Panchkula

ITA 802/CHANDI/2019 | 2016-2017
Pronouncement Date: 25-11-2019 | Result: Dismissed

Appeal Details

RSA Number 80221514 RSA 2019
Assessee PAN AAACH4686C
Bench Chandigarh
Appeal Number ITA 802/CHANDI/2019
Duration Of Justice 6 month(s) 3 day(s)
Appellant DCIT, Circle, Panchkula
Respondent M/s Haryana Agro Industries Corporation Ltd., Panchkula
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2019
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 25-11-2019
Last Hearing Date 25-11-2019
First Hearing Date 25-11-2019
Assessment Year 2016-2017
Appeal Filed On 22-05-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A CHANDIGARH !' # $ % &' '( BEFORE SHRI SANJAY GARG JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA ACCOUNTANT MEMBER ./ ITA NOS.801 & 802/CHD/2019 / ASSESSMENT YEARS: 2015-16 & 2016-17 THE DCIT CIRCLE PANCHKULA M/S HARYANA AGRO INDUSTRIES CORPORATION LTD. BAY NO. 15-20 SECTOR 2 PANCHKULA ./PAN NO: AAACH4686C / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI ATUL GOYAL CA ' ! / REVENUE BY : SHRI ARVIND SUDERSHAN SR. DR # $ % /DATE OF HEARING : 25.11. 2019 &'() % / DATE OF PRONOUNCEMENT : 25.11.2019 ')/ ORDER PERANNAPURNA GUPTA A.M. : THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE RE VENUE FOR DIFFERENT ASSESSMENT YEARS AGAINST THE COMMON ORDER DATED31.3.2019OF THE COMMISSIONER OF INCOME TAX (APPEALS) PANCHKULA [HEREINAFTER REFERRED TO AS CIT(A)] PASSED U/S 250(6) OF THE I NCOME TAX ACT 1961(HEREINAFTER REFERRED TO AS ACT). ITA NOS. 801 & 802/CHD/2019- HARYANA AGRO INDUSTRIES CORP LTD PANCHKULA 2 2. BOTH THE APPEALS PERTAINING TO THE SAME ASSESSEE HAVING IDENTICAL ISSUES WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 3. IN ITA NO. 801/CHD/2019 FOR ASSESSMENT YEAR 2015-16 FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENUE :- ITA NO. 801/CHD/2019. 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS RIGHT IN LAW IN HOLDING THAT THE WOODEN CRATES AND POLY COVERS ARE PERISHABLE THINGS HAVING SHORT LIFE AND DOES NOT GIVE ENDURING BENEFIT TO THE ASSESSEE IGNORING THE ASPECT THAT THE ASSESSEE HIMSELF CLAIMED 25% OF THE EXPENDITURE INCURRED ON WOODEN CRATES AND POLY COVERS DURING THE YEAR AND SPREAD OVER THE REMAINING OF 75% INTO FOUR YEARS CLAIMING 25% DURING EACH OF THE YEAR WHICH ESTABLISHES THE NATURE OF EXPENDITURE AS CAPITAL? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS RIGHT IN LAW IN ALLOWIN G THE APPEAL OF THE ASSESSEE ON THE ISSUE OF EXPENDITURE INCURRED ON WOODEN CRATES AND POLY COVERS IGNORING THE ASPECT THAT THE PARTICULAR ACCOUNTING POLICY FOLLOWED BY THE ASSESSEE WOULD NOT OVERRIDE THE PROVISIONS OF THE INCOME TAX ACT 1961 AS THE TAXABILITY OF INCOME IS TO BE DECIDED A S PER THE PROVISIONS OF THE STATUE AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF TUTICORIN ALKALI CHEMICAL & FERTILIZERS LTD. V/S COMMISSIONER OF INCOME TAX REPORTED AS [1997] 227ITR 172 (SQ)? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED TO ALLOW THE APPEAL OF THE ASSESSEE AND DELETING THE DISALLOWANCE OF RS. 23 09 731/- U/S 14A BECAUSE ON THE ONE HAND THE ASSESSEE COMPANY HAS MADE INVESTMENTS AMOUNTING TO RS. 1 57 05 000/- ON THE ITA NOS. 801 & 802/CHD/2019- HARYANA AGRO INDUSTRIES CORP LTD PANCHKULA 3 OTHER HAND ASSESSEE HAS SHOWN OUTSTANDING SECURED LOAN FROM BANKS FOR WHICH ASSESSEE IS PAYING HUGE INTEREST AMOUNT. 4. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SE T- ASIDE AND THAT OF THE AO BE RESTORED. 5 THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 4. IN ITA NO. 802/CHD/2019 RELATING TO A.Y 2016-17 THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS RIGHT IN LAW IN HOLDING THAT THE WOODEN CRATES AND POLY COVERS ARE PERISHABLE THINGS HAVING SHORT LIFE AND DOES NOT GIVE ENDURING BENEFIT TO THE ASSESSEE IGNORING THE ASPECT THAT THE ASSESSEE HIMSELF CLAIMED 25% OF THE EXPENDITURE INCURRED ON WOODEN CRATES AND POLY COVERS DURING THE YEAR AND SPREAD OVER THE REMAINING OF 75% INTO FOUR YEARS CLAIMING 25% DURING EACH OF THE YEAR WHICH ESTABLISHES THE NATURE OF EXPENDITURE AS CAPITAL? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS RIGHT IN LAW IN ALLOWIN G THE APPEAL OF THE ASSESSEE ON THE ISSUE OF EXPENDITURE INCURRED ON WOODEN CRATES AND POLY COVERS IGNORING THE ASPECT THAT THE PARTICULAR ACCOUNTING POLICY FOLLOWED BY THE ASSESSEE WOULD NOT OVERRIDE THE PROVISIONS OF THE INCOME TAX ACT 1961 AS THE TAXABILITY OF INCOME IS TO BE DECIDED A S PER THE PROVISIONS OF THE STATUE AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF TUTICORIN ALKALI CHEMICAL & FERTILIZERS LTD. V/S COMMISSIONER OF INCOME TAX REPORTED AS [1997] 227ITR 172 (SQ)? ITA NOS. 801 & 802/CHD/2019- HARYANA AGRO INDUSTRIES CORP LTD PANCHKULA 4 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SE T- ASIDE AND THAT OF THE AO BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 5. AT THE OUTSET BOTH THE LD. REPRESENTATIVES OF T HE PARTIES SUBMITTED THAT THE ISSUE RAISED VIDE GROUND NOS. 1 & 2 IN BOT H THE APPEALS BY THE REVENUE RELATING TO THE TREATMENT OF EXPENDITURE I NCURRED ON WOODEN CRATES AND POLY-COVERS AS CAPITAL EXPENDITURE IS ID ENTICAL TO THAT HAS BEEN ADJUDICATED UPON BY THE TRIBUNAL IN THE OWN CA SE OF THE ASSESSEE FOR ASSESSMENT YEAR 2012-13 VIDE GROUND NO.4 IN IT A NO. 216/CHD/2016 ORDER DATED 16.11.2018 WHEREIN THE AFORESAID ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSES SEE VIDE PARA 8 OF THE ORDER WHICH IS REPRODUCED AS UNDER:- 8. GROUND NO.4 : VIDE GROUND NO.4 THE ASSESSEE HAS AGITATED THE TREATMENT OF EXPENDITURE INCURRED ON WOODEN CRATES AND POLY-COVERS AS CAPITAL EXPENDITUR E AS AGAINST THE CLAIM OF THE ASSESSEE AS REVENUE EXPENDITURE. 9. WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE WOODEN CRATES AND POLY-COVERS ARE PERISHABLE THINGS WHICH HAVE SHORT LIFE AND ARE NOT OF ENDURING BENEFIT TO THE ASSESSE E. EVEN THE ASSESSEE HAS CLAIMED ONLY 25% OF THE SAID EXPENDITURE DURING THE YEAR AND HAS BEEN SPREAD OVER THE REMAINING OF 75% INTO FOUR YEARS CLAIMING 25% DURING EACH OF THE YEAR. CONSIDERING THE ABOVE FACTS WE DONT FIND ANY JUSTIFICATION ON THE PART OF THE LOWER AUTHORITIES TO TREAT IT AS A LONG TERM CAPITAL EXPENDITURE OF ITA NOS. 801 & 802/CHD/2019- HARYANA AGRO INDUSTRIES CORP LTD PANCHKULA 5 ENDURING BENEFIT. THIS GROUND OF THE APPEAL OF THE ASSESSEE IS HEREBY ALLOWED. FOLLOWING THE SAME THE ISSUE RAISED BY THE ASSESSE E VIDE AFORESAID GAD NOS. 1 & 2 IN BOTH THE APPEALS ARE HEREBY ALLOW ED. 6. GROUND NO.3 (IN ITA NO. 801/CHD/2019) : A PERUSAL OF THE ABOVE GROUND OF APPEAL REVEALS THA T THE REVENUE IS AGGRIEVED BY THE ACTION OF THE LD. CIT(A) IN DELETI NG THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S 14A OF THE I.T. ACT 7. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE DID NOT EARN ANY TAX EXEMPT INCOME DURING THE YEAR.THAT THE LD. CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE CONSIDERING VARIOUS DECISIONS OF THE HON'BLE HIGH COURTS INCLUDING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF C IT VSLAKHANI MARKETING 272 CTR 265 (P&H). 8. WE FIND THAT THE ISSUE IS NOW SQUARELY COVERED B Y THE VARIOUS DECISIONS OF THE HON'BLE HIGH COURTS WHO HAVE BEEN UNANIMOUS TO HOLD THAT NO DISALLOWANCE IS ATTRACTED U/S 14A IN CASE T HE ASSESSEE HAS NOT EARNED ANY INCOME NOT FORMING PART OF THE TOTAL INC OME. RELIANCE IN THIS RESPECT CAN BE PLACED ON VARIOUS DECISIONS OF THE HON'BLE HIGH COURTS INCLUDING THAT OF THE HON'BLE JURISDICTIONAL HIGH COURT OF PUNJAB AND HARYANA IN THE CASE OF CIT VS. WINSOME TEXTILES (2009) 319 ITR 204 (P&H) AND IN THE CASE OF CIT FARIDABAD V. LAKHANI M ARKETING INC 226 TAXMANN 45 (P&H); HON'BLE DELHI HIGH COURT IN THE C ASE OF ITA NOS. 801 & 802/CHD/2019- HARYANA AGRO INDUSTRIES CORP LTD PANCHKULA 6 CHEMINVEST LTD VS. ITO (2015) 378 ITR 33 (DELHI) AND OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CORRTE CH ENERGY P. LTD. (2014) 45 TAXMAN.COM 116 AND FURTHER OF THE HON'BL E ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. M/S SHIVAM MOTORS (P ) LTD (2014) 272 CTR (ALL) 277. 9. SINCE THE ASSESSEE DID NOT EARN ANY TAX EXEMPT I NCOME HENCE NO DISALLOWANCE U/S 14A IS ATTRACTED. THIS GROUND RAIS ED BY THE REVENUE IS ACCORDINGLY DISMISSED. 10. IN VIEW OF THIS WE DO NOT FIND ANY MERIT IN BO TH THE APPEALS OF THE REVENUE AND THE SAME ARE ACCORDINGLY DISMISSED. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT IMM EDIATELY ON COMPLETION OF HEARING. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER DATED : 25.11.2019 .. '+ -.- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 %2 34516 / DR ITAT CHANDIGARH 6. 157$ / GUARD FILE '+ # / BY ORDER 8' / ASSISTANT REGISTRAR