2019 (7) TMI 993 - HC - Income Tax

Deduction u/s 80JJA denial - manufacturing - baggase / husk is not a waste but is a by-product of agri-produce processing industry which was purchased and not collected and processed or treated by the assessee, which is a prerequisite for claiming deduction under Section 80JJA - HELD THAT - Issue is covered by the decision of the Division Bench of this Court in case of CIT, Pune Vs. Padma S. Bora 2012 (12) TMI 666 - BOMBAY HIGH COURT . This question is therefore, not considered. Disallowance on account of employee's contribution to Provident Fund (PF), Employee's State Insurance Corporation (ESIC) and Maharashtra Labour Welfare Fund - HELD THAT - Issue covered by the decision of this Court in the case of CIT-Central Vs. Ghatge Patil Transports Ltd 2014 (10) TMI 402 - BOMBAY HIGH COURT in which it has held that the benefit of deduction of the employees' contribution to the provident fund would also be available as long as the same is made before filing of the return. This question is, therefore, not considered. Depreciation on windmills denied - assessee was not a registered owner of the windmills and it was purchasing electricity from NAV Maharashtra Chakan Oil Mills Ltd (NMCOML) thus having no title / dominion and right to use the assets - HELD THAT - Commissioner and the Tribunal concurrently came to the conclusion that the assessee had purchased windmill for total consideration of ₹ 1.10 Crores. The payments were made between August 2007 to March 2008 through bank channel. The Sales Tax Entitlement Certificate of the assessee was also accordingly modified w.e.f. 5.12.2007. Memorandum of Understanding dated 1.6.2007 under which the said machinery was acquired by the assessee was also produced on record. It was, after examination of such materials on record, the Commissioner and the Tribunal concurrently held that the assessee had in fact purchased windmill and therefore, was entitled to claim depreciation thereon. No question of law arises

Summary

Issues:
1. Disregarding the motive of tax evasion for claiming tax benefits
2. Claiming deduction under Section 80JJA for bagasse/husk as a by-product
3. Claiming depreciation on windmills without ownership
4. Disallowance of employee's contribution to welfare funds

Issue 1:
The High Court noted that the issue of tax evasion motive was addressed in a previous case, and thus not considered for this judgment.

Issue 2:
Regarding the deduction under Section 80JJA for bagasse/husk as a by-product, the Court found that the assessee had purchased windmills and made payments through bank channels. The Sales Tax Entitlement Certificate was modified accordingly, and a Memorandum of Understanding was produced. The Commissioner and Tribunal concluded that the assessee had indeed purchased the windmill, making them eligible for depreciation. Therefore, the Court dismissed the appeal as no question of law arose.

Issue 3:
The Court addressed the claim of depreciation on windmills without ownership. The Assessing Officer argued that the assessee, not being the registered owner of the windmills, could not claim depreciation. However, the Commissioner and Tribunal found evidence of the purchase of windmills by the assessee, supported by payment records and documentation. As a result, the Court upheld the decision that the assessee was entitled to claim depreciation on the windmills.

Issue 4:
Regarding the disallowance of employee's contribution to welfare funds, the Court referenced a previous judgment stating that the benefit of deduction for employees' contribution to provident fund would be available as long as it was made before filing the return. Since the contribution was made before filing the return, the Court did not consider this issue further.

In conclusion, the High Court dismissed the Income Tax Appeal, upholding the decisions of the Commissioner and Tribunal regarding the claim of depreciation on windmills by the assessee.