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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: SHRI MAHAVIR PRASAD & SHRI WASEEM AHMED
PER MAHAVIR PRASAD, JUDICIAL MEMBER
ITA No. 2294/Ahd/2014 2 . A.Y. 2009-10 1. This appeal by the Revenue is directed against the order of the Ld. CIT(A)- VIII, Ahmedabad dated 23.05.2014 pertaining to A.Y. 2009-10 and following grounds have been taken and assessee has also filed C.O. 1. The Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.70,89,136/- made by the Assessing Officer on account of denial of deduction claimed 80IB(11A) for not satisfying the conditions laid down, without properly appreciating the facts of the case and the material brought on record. 2. The Ld.CIT(A) has erred in law and on facts in not appreciating findings given by the A.O. in the assessment order on the disallowance on account of 80IB(11A) of the IT. Act. 3.On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 4.It is, therefore, prayed that the order of the Ld. CIT(A) may be quashed and that of the Assessing Officer be restored.
The facts of the case are that the "During the A.Y. 2006-07 the assessee is engaged in the business of grinding and trading of Moong and Moong dal. During the year under consideration, the assessee claimed deduction u/s 80- 18(11 A) of the Income Tax Act 1961 amounting to Rs. 9,19,4081-. In course of assessment proceedings of the Assessment Year 2010-11 it is noticed that the assessee claimed that it has been carrying on the said business since the A.Y. 2005-06, and claimed that it is eligible for deduction under Section 80-1 B( 11 A) of the Income Tax Act 1961.
The claim of the assessee is examined thoroughly in the light of the provisions of Section 80-IB(11A) of the Income Tax Act 1961 ;n course of scrutiny assessment proceedings of the assessee for the Assessment Year 2010-11. During the assessment proceedings it is observed that the assessee company
ITA No. 2294/Ahd/2014 3 . A.Y. 2009-10 was engaged in the business of grinding and trading of Moong and Moong dal only in the A.Y. 2006-07 also. The provisions of Section 80- IB(llA) of the income Tax Act 1961 however clearly stipulates that the deduction 80IB(11 1A) would be eligible for those assesses who are carrying on an integrated business of handling, storage and transportation of food grains. More over according to the Memorandum explaining the provisions of the Finance Bill, 2001, section 80-03(11A) has been enacted to address the nation's concern relating to food scarcity and agricultural development. Hence, the Bill proposes to encourage upgradation and modernisation of infrastructure for storage, handling and transportation of foodgrains for greater efficiency in grain management and minimizing post harvest foodgrain losses. The Finance Minister in his speech also made it clear that it is the integrated activity of storage, handling and transportation of foodgrains that is covered by section 80-IB(11A). It is therefore important that the activities comprising of 'storage, handling and transportation of foodgrains' together form a separate distinct and indivisible business of the assessee. Hence 'trading in foodgrains’ is not covered by the said provision although storage, handling and transportation of food grains may incidentally form and assessee's business of trading in food grains. The word 'integrated' as per the Chambers Mini Dictionary means 'to fit parts together to form a whole'. It may also be noted that the words used are 'integrated business' and not' integrated businesses'. Consequently it would be important to note that only if all the activities of handling, storage, and transportation of foodgrains together constitute a single business, the deduction under section 80-IB(11) would be available. Where these activities do not form part of a single business the deduction would be denied.
ITA No. 2294/Ahd/2014 4 . A.Y. 2009-10 4. The assessee is engaged in the business of grinding and trading of Moong and Moong dal which does not qualify as the integrated business of handling, storage and transportation of foodgrains'. The claim of the assessee for deduction under section 80IB(11A) of the Income Tax Act is therefore not allowable.
4. In view of the above facts, I have reasons to believe that The income to the tune of Rs. 9,19,408/-chargeable to tax has been under assessed in the case of the assessee for the assessment year 2006-07 and is required to be reassessed as there was a failure on the part of the assessee to disclose fully and truly all material facts.
Notice under section 143(2) was issued on 13.09.2013 and served upon the assessee. The assessee vide its letter dated 18.09.2013 has confirmed that its original return may be treated as final. In response to the aforesaid notices, Shri B.K. Baheti C.A. & Authorized Representative of the assessee company attended from time to time and furnished the details as called for. The case was discussed with him and he was heard. In response to the notice under section 148 issued the assessee vides its letter dated 30.03.2013 submitted as under: "1. We 'have filed the income tax return for the above assessment year within the due date. The return filed by us is true and correct. We have claimed the deduction u/s. 80/8 (] 1A) which is on the basis of our initial year claim approved by the Assessing Officer who has made the assessment u/s. 143(3] of the Act, for the Asst Year 2005-06, 2. We want to state that during the Asst. Year: 2010-11 our claim has been disallowed by the Assessing Officer and we have filed an appeal before the H'ble Commissioner. The following facts and grounds are as below: Facts:
ITA No. 2294/Ahd/2014 5 . A.Y. 2009-10 3. The Assessee Company is engaged in the business of Storage, handling and transportation of Moong Da/ pulses (foodgrains). Industry is located in Moraiya, Ta: Sanand, Dist: Ahmedabad which is covered for eligible deduction in respect of profit & gains from certain industrial undertakings engaged in the business of processing of foodgrains u/s. 80/8 under the Income Tax Act of Chapter-VIA. 4. Assessee has claimed deduction u/s. 80/8 (11A) in the very first year of operation i.e. Asst. Year: 2005-06, the same has been assessed u/s. 143(3) of the Act and the deduction has been allowed. 5. - Company, continuously claiming the deduction since them, and for the Asst.Year: 2008-09, 2009-10 assessment order issued u/s. 143(3) of the Act. In all the assessment proceedings 6. During the course of assessment in the year 2010-11 same issued has been discussed at length and Learned Assessing Officer disallowed the claim. Grounds: 7. 'We have belief that claims U/s - 80!S is provided to industries for promoting the growth of agro based industries. In earlier assessment for 6 years claim has been allowed. Out of 6 there are 3 assessment order U/s. 143(3} has been allowed the claim. 8. The claim allowed in initial assessment year should be continuously considered for the period it has been announced. We rely on the H'ble Gujarat High Court Order in the case of M/s. Saurashfra Chemicals Ltd. Where if has been held that the claim allowed in the earlier year cannot be denied in subsequent assessment year. Also, we relied on Case Law: Sri T. Devender Reddy Vs. Income Tax Officer, by Income Tax Appellate Tribunal, Hyderabad.
But, ld. A.O. was not agree with the contention of the assessee and same found not tenable and made addition of Rs. 70,89,136/- and denied the deduction claimed u/s. 80IB(11A).
ITA No. 2294/Ahd/2014 6 . A.Y. 2009-10 8. Against the said order, assessee preferred first statutory appeal before the ld. CIT(A) who granted relief to the assessee.
Now department is before us.
At the outset, ld. A.R. has cited an order of our Bench in assessee’s own case in the same grounds of appeal assessment year 2010-11, Bench has granted relief wherein before us assessment year 2008-09. The relevant para of the ITAT order is reproduced: 5. We have gone through the relevant record and orders of the authorities below. We find that the assessee has filed detailed paper book containing AY 2005-06 order u/s 143(3) of the Act in which claim was allowed u/s 80IB(11A) of the Act. We further find that against Ld. CIT(A)'s order of AYs 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10 in which CIT(A) allowed the claim u/s 80IB(11A) of the Act, the Department has not preferred any appeal meaning thereby that it has accepted the decision of Ld. CIT(A) in assessee favour. In view of aforesaid facts, we are of the opinion that assessee is entitled for the claim allowed u/s 80IB(11A) of the Act and find no reason to interfere in the order of Ld. CIT(A).
In the result appeal of the Department is dismissed.
Respectfully following our own order, we dismiss the appeal of the Revenue.
C.O. No. 278/Ahd/2014 for A.Y. 2009-10
So far C.O. No. 278/Ahd/2014 is concerned, same is supportive and ld. A.R. does not want to press the same and same is dismissed as not pressed.
ITA No. 2294/Ahd/2014 7 . A.Y. 2009-10
In the result, appeal filed by the Revenue and C.O. of the Assessee are dismissed.
Order pronounced in Open Court on 30 - 11- 2018 Sd/- Sd/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad: Dated 30/11/2018 Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER
Deputy/Asstt.Registrar ITAT,Ahmedabad