ITO, WD-4(4), KOLKATA, KOLKATA vs. M/S BHASKAR TEA & INDUSTRIES LTD., KOLKATA

PDF · subscribers
ITA 451/KOL/2014Status: DisposedITAT Kolkata03 February 2017AY 2009-20104 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that cess on green leaves is an allowable deduction before applying Rule 8(1) for computing composite income from tea business. This decision was based on jurisdictional High Court and Supreme Court rulings.

What were the facts?

The assessee, engaged in tea business, claimed deduction for cess on green leaves. The AO disallowed this expenditure, considering it attributable to core agriculture activities. The CIT(A) allowed the deduction, following a High Court precedent.

What were the issues?

Whether cess on green leaves is an allowable deduction in computing the composite income from tea business under Rule 8 of the Income Tax Rules, 1962.

Which sections of the Income-tax Act were involved?

Rule 8

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “A” BENCH : KOLKATA

Before: Hon’ble Sri N.V.Vasudevan, JM & Shri Waseem Ahmed, AM ]

4.

On appeal by the Assessee, the CIT(A) deleted the disallowance made by the AO by following the order of the Hon'ble Calcutta High Court in the case of AFT Industries Ltd. vs CIT (270 ITR167) wherein it was held that Green Leaf Cess has to be allowed as deduction before applying Rule 8(1) of the rules and only thereafter 40% of such income has to be brought to tax.

5.

Aggrieved by the order of the CIT(A), the revenue has raised Gr.No.1 before the Tribunal. The Learned DR appearing on behalf of the Revenue relied on the order of the AO. On the other hand, the ld.counsel for the assessee relied on the orders of the ld. CIT(A).

6.

After hearing the rival submissions and on careful perusal of the materials available on record, keeping in view of the fact that the issue is concluded by the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs AFT Industries Ltd. 270 ITR 167 (Cal) where the amount paid as cess was held as eligible for deduction in computing the composite income under Rule 8 of I.T. Rules. This issue is, therefore, decided in favour of the assessee and against the Revenue by upholding the order of the C.I.T.(A) who has allowed the deduction of payment of cess on green leaves in computing the composite income from tea business of the assessee under rule 8 of the I.T. Rules. The fact that the SLP is pending before the Hon'ble Supreme Court against the decision of the Hon'ble Calcutta High Court in respect of AFT Industries Ltd. vs CIT (270 ITR 167) will not have any effect since the Hon'ble Apex ITA No.451/Kol/2014-M/s. Bhaskar Tea & Inds. Ltd. A.Y.2009-10 3 Court has neither set aside the orders of the Calcutta High Court nor granted any stay. The learned counsel for the Assessee also brought to our notice the decision of the Hon’ble Supreme Court in the case of CIT Vs. M/S.Apeejay Tea Co. Ltd. Civil appeal No.3168 of 2006 dated 6.8.2015 wherein the Hon’ble Supreme Court has upheld view as was taken in the case of AFT Industries Ltd. (supra). In view of the above, the appeal by the revenue is dismissed.

7.

In the result appeal by the Revenue is dismissed.

Order pronounced in the Court on 03.02.2017.

Recent GST High Court judgments

Search GST case law →