M/S EAGAL SEEDS & BIOTECH LIMITED,INDORE vs THE ACIT, 2(1), INDORE

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI KUL BHARAT & SHRI MANISH BORAD

For Appellant: Shri Ajay Tulsiyan &, Smt. Shalini Mehta, A.Rs

For Respondent: Shri Rajiv Jain, Sr.D.R

Hearing: 15.10.2019Pronounced: 22.10.2019

[ITA No.752/Ind/2018] [Eagle Seeds & Biotech Ltd., Indore]

आयकर अपील�य अ�धकरण, इ�दौर �यायपीठ, इ�दौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE

BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER

ITA No.752/Ind/2018 Assessment Year: 2012-13 Eagle Seeds & Biotech Ltd. ACIT-2(1) 117, Silver Sanchora Castle Indore बनाम/ 7 RNT Marg Vs. Indore (Appellant) (Revenue ) P.A. No.AAACE8528L

Appellant by Shri Ajay Tulsiyan & Smt. Shalini Mehta, A.Rs Respondent by Shri Rajiv Jain, Sr.D.R. Date of Hearing: 15.10.2019 Date of Pronouncement: 22.10.2019 आदेश / O R D E R PER KUL BHARAT, J.M: This appeal by the assessee against order of the

Ld. CIT(A)-1 Dated 20.7.2018 pertaining to the assessment

[ITA No.752/Ind/2018] [Eagle Seeds & Biotech Ltd., Indore]

year 2012-13. The assessee has raised following grounds

of appeal:

That the Ld. CIT(A) erred in not allowing the claim of deduction made under section 80IA in respect of the profits of Rs.30,60,276/- derived from the eligible power generation business through Wind Mill unit of the appellant. That on the facts and in circumstances of the case the claim of deduction having been made during the course of assessment proceedings is legally allowable to the appellant, which has also been allowed in subsequent years, is prayed to be now allowed. 2. That the Ld. CIT(A) erred in upholding the action of A.O. in disallowing the following expenses on adhoc basis. i. Rs.50,000/- out of expenses incurred on account of Processing Expenses. ii. Rs.50,000/- out of expenses incurred on account of Postage, Telegram and Telephone Expenses. iii. Rs.50,000/- out of expenses incurred on account of General Expenses. That on the facts and in the circumstances of the case, the above adhoc disallowances made without pointing out any defect in the claim of the appellant, are wrong and are prayed to be deleted. 3. That the appellant craves leave to add, to alter, amend, modify, substitute, delete and/or rescind all or any of the grounds of appeal on or before final hearing, if necessity so arises.

The facts giving rise to the present appeal are that case of the assessee was picked up for scrutiny assessment and the assessment u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) was framed vide order

[ITA No.752/Ind/2018] [Eagle Seeds & Biotech Ltd., Indore]

dated 10.3.2015. While framing the assessment, the A.O. made addition on account of disallowance of excessive depreciation of Rs.3,93,876/-. The A.O. also made disallowance by invoking provisions of section 14A of the Act of Rs.1,058/-. The A.O. further made adhoc disallowance of Rs.1,50,000/-. Thus, assessed income at Rs.5,47,99,199/- against the income declared in the tax return at Rs.5,42,54,265/-. Further, the A.O. did not entertain claim of deduction u/s 80IA of the Act. Aggrieved against this, the assessee preferred an appeal before the Ld. CIT(A), who after considering the submissions, dismissed the appeal, thereby sustained the finding of the A.O. Aggrieved against the order of the Ld. CIT(A), assessee is in present appeal.

Ground No.1 of the appeal is against rejecting claim of deduction u/s 80IA of the Act as made during the assessment proceedings. Ld. Counsel for the assessee reiterated the submissions as made in the written synopsis. Ld. Counsel further submitted that in the subsequent years, claim has been duly allowed by the revenue authorities. The submissions of the assessee are reproduced as under:

[ITA No.752/Ind/2018] [Eagle Seeds & Biotech Ltd., Indore]

On the contrary, Ld. D.R. opposed these submissions

and supported the orders of the authorities below. The Ld.

D.R. submitted that assessee has not claimed in the return

of income. Therefore, the claim made during the course of

assessment would not be admissible and hence the

authorities below have rightly rejected the same.

We have heard the rival submissions, perused the

materials available on record and gone through the orders

of the authorities below. Undisputedly, the claim of

deduction u/s 80IA of the Act has been allowed in the

subsequent years. Ld. CIT(A) rejected the claim on the

[ITA No.752/Ind/2018] [Eagle Seeds & Biotech Ltd., Indore]

basis that A.O. has not made any disallowance. The

assessee himself while filing the return of income offered

the same for tax. The assessee has relied upon various

case laws. The judgement of the Hon'ble Supreme Couirt

rendered in the case of CIT Vs. Mahalakshmi Sugar Mills

Ltd. 58 CTR 138 to buttress the contention that it is the

duty of the assessing authority to determine the true figure

of the taxable income and consequential tax liability.

Further reliance is placed upon decision of the coordinate

benches of this Tribunal rendered in the case of DCIT Vs.

Lab India Instruments Pvt. Ltd. 93 ITD 0120. We do not

agree with the reasoning given by the Ld. CIT(A) that the

assessee himself had offered the impugned claim of

deduction for taxation in the light of the judgement of the

Hon'ble apex court rendered in the case of CIT Vs.

Mahalakshmi Sugar Mills Ltd. (supra). The Ld. CIT(A)

ought to have examined the issue of taxability if the

[ITA No.752/Ind/2018] [Eagle Seeds & Biotech Ltd., Indore]

amount was not taxable by offering the same would not

close the doors for the assessee to claim deduction if

subsequently it is realised that the assessee was entitled

for deduction u/s 80IA of the Act. We therefore,

considering the totality of the facts and circumstances

restore the issue of deduction to the file of the A.O. to verify

the correctness of the claim if it is found that assessee has

rightly claimed deduction u/s 80IA of the Act and has been

allowed in subsequent years. Under the identical facts, the

assessing officer would allow deduction as claimed by the

assessee u/s 80IA of the Act. This ground of the assessee’s

appeal is allowed for statistical purposes.

Ground No.2 is against disallowance of the expenses

on adhoc basis amounting to Rs.1,50,000/-. Ld. Counsel

for the assessee has reiterated the submissions as made in

the written synopsis. The submissions of the assessee are

as under: 12

[ITA No.752/Ind/2018] [Eagle Seeds & Biotech Ltd., Indore]

Ld. D.R. opposed these submissions.

We have heard the rival submissions, perused the

materials available on record and gone through the orders

of the authorities below. The A.O. disallowed this

expenditure on adhoc basis on the basis that bills and

vouchers and supporting documents were not found proper

and were not made under the head of these expenses. The

Ld. CIT(A) confirmed this addition by observing as under:

“4.2 The A.O. made the addition on the ground that supporting bills and vouchers were not found proper. It is obligatory on the part of the appellant to maintain proper bills and vouchers and to produce during the course of assessment proceedings. Since, the bills and vouchers are not properly maintained, the A.O. is justified in making the addition. Therefore, the addition made by the A.O. amounting to Rs.1,50,000/- is Confirmed. Therefore, the appeal on this ground is Dismissed.”

[ITA No.752/Ind/2018] [Eagle Seeds & Biotech Ltd., Indore]

We find merit into the contentions of the Ld. Counsel

for the assessee that there is a sweeping observation by the

authorities below. No specific expenses have been pointed

out to demonstrate the particular expenditure was not

supported with evidence. Therefore, we direct the A.O. to

delete this addition.

10.

In the result, the appeal filed by the assessee is partly

allowed for statistical purposes.

Order was pronounced in the open court on 22 .10.2019.

Sd/- Sd/- (MANISH BORAD) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIALMEMBER Indore; �दनांक Dated : 22/10/2019 VG/SPS Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order

Assistant Registrar, Indore 17

M/S EAGAL SEEDS & BIOTECH LIMITED,INDORE vs. THE ACIT, 2(1), INDORE