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Facts
The Revenue filed appeals against two appellate orders that deleted an addition of Rs. 7,55,95,520/-. The addition was made due to the disallowance of deduction under Section 80JJA of the Income Tax Act for AY 2013-14 and AY 2014-15, concerning profits from collecting and processing biodegradable waste.
Held
The Tribunal, following a previous decision in the assessee's own case for AY 2011-12 and considering the CIT(A)'s reasoned order, found that the CIT(A) had correctly allowed the deduction under Section 80JJA. The Revenue failed to provide a rebuttal to the CIT(A)'s findings.
Key Issues
Whether the CIT(A) was justified in deleting the addition made on account of disallowance of deduction under Section 80JJA for AY 2013-14 and 2014-15.
Sections Cited
143(3), 80JJA
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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: Smt. Annapurna Gupta & Shri T.R. Senthil Kumar
Date of hearing : 06-05-2025 Date of pronouncement : 20-05-2025 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-
These appeals are filed by the Revenue as against two separate appellate orders dated 15.10.2024 & 13-12-2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Years 2013-14 & 2014-15. Since common issue is involved in both the appeals, the same are disposed of by this common order.
Brief facts of the case is that the assessee is a company engaged in the business of manufacturing of Starch Dextrose and related products. For the Asst. Year 2013-14, assessee filed its Return of Income on 30-11-2013 declaring total income of Rs. 2,75,97,810/-. The return was taken for scrutiny assessment and the Ld. A.O. following earlier assessment year, disallowed deduction u/s. 80JJA in respect of profit and gains from business of collecting and processing of Bio-degradeable wastes amounting to Rs.7,55,95,520/-.
Aggrieved against the assessment order, assessee filed appeal before Ld. CIT(A) who deleted the addition following Tribunal decisions in assessee’s own case in dated 30-01-2020 relating to Asst. year 2011-12.
Aggrieved against the same, the Revenue is in appeal before us raising the following Grounds of Appeal:
1. "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition made to the tune of Rs.7,55,95,520/- on account of disallowance of deduction made u/s. 80JJA without appreciating the facts of the case?"
2. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 3. It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored?"
At the outset, Ld. Counsel appearing for the Assessee submitted that Co-ordinate Bench of this Tribunal in assessee’s own case in relating to the Asst. Year 2011-12 held in favour of the assessee which was followed for the subsequent Asst. Year 2012-13 in ITA No. 1763/Ahd/2016. Therefore Ld. Counsel requested to dismiss the Revenue appeals. Ld. Counsel further stated that Revenue’s appeal against the earlier orders are admitted in Tax Appeal No. 307 of 2020 vide order dated 19-01-2021 and the other appeal filed by the Revenue was dismissed on account of Low Tax Effect. However there is no stay on any interim order from the Hon’ble High Court on the pending Tax Appeal and therefore requested to dismiss the Revenue appeals.
Per contra Ld. CIT-DR appearing for the Revenue could not contravent the above submissions of the Ld. Counsel. However he relied upon the orders passed by the Assessing Officer.
Heard rival parties and perused the materials available on record including the order passed by the Co-ordinate Bench of this Tribunal in dated 30-01-2020 relating to the Asst. Year 2011-12. Operative portion of the Tribunal decision is as follows: “9. We have carefully perused the assessment order of the AO and appellate order of CIT(A). The claim of deduction under s.80JJA of the Act on processing of biodegradable waste for generation of biofeeds (biological agents) is in question. The CIT(A) has found merit in the claim of deduction on principles. The CIT(A) has taken note of the submissions of the assessee towards process of production of biofeeds in the nature of biological agents from biodegradable waste, ingredients purchased for processing and treating waste, details of machinery used in production, details of purchase and sale made from various parties etc. The CIT(A) found merit in the case of the assessee for eligibility of deduction under s.80JJA of the Act from on profits arising from activity of collection and processing of biodegradable waste in order to generate/manufacture biofeeds/biological agents which are essentially nutrition booster derived by a combination of various biological processes for the use in Animal Healthcare Industry. As per process adopted, unwanted waste are further treated through a series of biological process with the help of biotechnology to produce biofeeds which are rich in energy values. Biofeeds are stated to help in improving the digestion in animals and poultry and the biological agents present in biofeeds are stated to be used to replace chemical based antibiotics in animal and poultry. On these facts, the CIT(A) has accepted the claim of the assessee under s. 80JJA of the Act on first principle but re-allocated a part of expenditure as considered attributable to the activity derived from the business of collecting and processing or treating biodegradable waste for production of biological agents. Owing to reallocation of expenses, the CIT(A) restricted the claim to the extent of Rs.1.54 Crores as against the claim of the assessee amounting to Rs.1.91 Crore. We find considerable substance in the process of reasoning adopted by the CIT(A) while concluding the issue in favour of the assessee. The CIT(A), in our view, has dealt with the issue objectively and hence does not warrant interference. The Revenue has failed to rebut the findings of the CIT(A) in any assertive manner. We thus decline to interfere.”
There is no change in the facts of the case. Further there is no stay obtained by the Revenue in the Tax Appeal No. 307 of 2020 filed before the Hon’ble High Court of Gujarat. In the above circumstances, we have no hesitation in dismissing the appeals filed by the Revenue.
Order pronounced in the open court on 20-05-2025