2009 (12) TMI 726 - AT - Income Tax

Summary

Issues involved:
1. Recalling of order for deciding issues of exemption under section 80P on transportation of fertilisers and head office expenses.
2. Validity of deduction under section 80P on transport income and head office expenses.
3. Consideration of head office expenses for the assessment year 2002-03.

Issue 1: Recalling of order for deciding exemption under section 80P:
The Tribunal recalled its order to decide on the exemption under section 80P related to transportation of fertilisers and head office expenses. The Tribunal observed that certain issues had inadvertently remained undecided, necessitating rectification. The order was recalled specifically for these two issues, and the appeals were directed to be reheard for a decision.

Issue 2: Validity of deduction under section 80P on transport income and head office expenses:
The Departmental representative argued against allowing deduction under section 80P for transport income, stating that since the assessee did not own any godown, they were not eligible for the deduction. The Tribunal examined the nature of the assessee's activities related to handling and transport contracts with specific companies, concluding that the incidental activity could not be considered eligible for deduction under section 80P(2)(e). Consequently, the claim for transport income deduction was rejected. Regarding head office expenses, it was highlighted that the issue was only relevant for the assessment year 2002-03. The Tribunal noted that the claim for head office expenses had not been considered previously and directed the Commissioner of Income-tax (Appeals) to pass a speaking order on this issue after providing the assessee with a reasonable opportunity for a hearing.

Issue 3: Consideration of head office expenses for the assessment year 2002-03:
The Tribunal acknowledged the specific plea made by the assessee regarding head office expenses for the assessment year 2002-03. It was noted that the Commissioner of Income-tax (Appeals) had not addressed this aspect in a speaking order. In the interest of justice, the Tribunal restored the issue of head office expenses to the Commissioner of Income-tax (Appeals) for a detailed consideration and a speaking order. The Tribunal rejected the claim for transport income deduction under section 80P(2)(e) while allowing the ground for head office expenses for the assessment year 2002-03 for statistical purposes.

In conclusion, the Tribunal disposed of the appeals by rejecting the claim for transport income deduction under section 80P(2)(e) and allowing the ground for head office expenses for the assessment year 2002-03 to be considered further.