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Facts
The assessee's appeal for AY 2018-19 arose against a revision order passed by the PCIT under Section 263 of the Income-tax Act. The PCIT held that the Assessing Officer's assessment accepting the assessee's eligibility for deduction under Section 80IB(11A) was erroneous.
Held
The Tribunal held that the assessee, by operating a cold storage facility and renting it to growers for produce preservation, was engaged in the business of 'preservation' as contemplated by Section 80IB(11A). Therefore, the PCIT's revisionary power was incorrectly exercised.
Key Issues
Whether the assessee's cold storage business, involving renting out the facility to growers, qualifies for deduction under Section 80IB(11A) and if the PCIT was justified in invoking Section 263 to revise the assessment.
Sections Cited
263, 143(3), 80IB(11A), 263
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI SATBEER SINGH GODARA & SHRI MANOJ KUMAR AGGARWAL
ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for assessment years 2018-19 arises against the Pr. Commissioner of Income Tax-1(in short, the “PCIT), Agra’s order no. F.No. PCIT-1/Agra/Sec.263/PUACPL/2022-23 dated 21.03.2023, involving proceedings under section 263 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties at length. Case file perused.
It next emerges during the course of hearing with the able assistance coming from the Revenue side represented by learned CIT(DR) Shri Arun Kumar Yadav that the PCIT herein has exercised his section 263 revision jurisdiction so as to hold the Assessing Officer’s section 143(3) regular assessment framed on 01.03.2021; as an erroneous one causing prejudice to the interest of revenue. Mr. Yadav vehemently argues that given the fact that the assessee had not proved its case as eligible for section 80IB(11A) deduction, it has been rightly termed as not eligible for the same, which was wrongly accepted by the Assessing Officer in his assessment forming subject matter of revision. He further quotes the tribunal’s order in Ridhi Agro Cold Care vs. ITO dated 24.08.2021 (headed by one of us i.e. Judicial Member), that the issue already stands settled in the department’s favour.
We have given our thoughtful consideration to the issue. We are of the considered view that given the fact that the assessee in fact duly carries out his business of cold storage, merely because it had given on rent the corresponding cold storage facility to various growers to store their respective produce, same would indeed be entitled to be treated as under clinching head “preservation” incorporated in the corresponding statutory provisions u/s. 80IB(11A) of the Act. So far as Revenue’s reliance of tribunal’s above order is concerned, we make it clear that the said earlier bench had not examined the issue from the perspective of “preservation” and therefore, it ceases to be a binding precedent in light of CIT Vs. BR Constructions (1993) 202 ITR 222 (AP). That being the case, we conclude 2 | P a g e that once the assessee is held as engaged in the “preservation” of the eligible produce u/s. 80IB(11A), the learned PCIT could not have held it as not entitled for very deduction. We accordingly reverse the impugned section 263 revision directions in very terms.
This assessee’s appeal is allowed.
Order pronounced in the open court on 17.02.2025.