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2020 (5) TMI 258 - AT - Income TaxClaim of deduction u/s. 10(30) - subsidy received from Tea Board under Special Purpose Tea Fund Scheme - Since the Special Purpose Tea Fund Scheme was yet to be notified by the Central Government, the Assessing Officer held that the assessee is not eligible for exemption u/s. 10(30) - HELD THAT - CIT(A) has not committed any error in allowing the appeals of the assessee by following the earlier order of the Tribunal in assessee s own case 2018 (1) TMI 788 - ITAT COCHIN . Being so, we do not find any infirmity in the order of the CIT(A) and the same is confirmed. Thus, this ground of appeals of the Revenue is dismissed. Income earned from sale of import licenses as central income - HELD THAT - As in assessee s own case 2018 (1) TMI 788 - ITAT COCHIN import license were obtained by the assessee company on account of a scheme for promoting tea exports. The income from sale of import licenses received on account of export of tea is an integral part of plantation operation of the company. The assessee company undertakes exports taking into consideration the import license benefits. Therefore, the import licenses benefits are clearly part of the tea income. The assessee company has not claimed the income as exempt income (agricultural income) but as a part of the combined operation and hence the CIT(A) was correct in treating the said income as tea income as per Rule 8.
Issues Involved:
1. Allowability of claim of deduction under Section 10(30) of the Income Tax Act. 2. Treatment of income earned from the sale of import licenses. 3. Deletion of addition being share of loss from floral extraction operation expenditure. 4. Classification of various incomes as part of tea operations under Rule 8 of the Income Tax Rules. Detailed Analysis: 1. Allowability of Claim of Deduction under Section 10(30) of the Income Tax Act: The assessee claimed a deduction under Section 10(30) for subsidies received from the Tea Board under the Special Purpose Tea Fund Scheme. The Assessing Officer (AO) denied the exemption, stating the scheme was not notified by the Central Government. The CIT(A) allowed the claim, relying on the ITAT's earlier decision in the assessee's favor, which held that the subsidy for replantation and rejuvenation of tea plants was a capital receipt, not a revenue receipt. The Tribunal confirmed the CIT(A)'s order, dismissing the Revenue's appeal on this ground. 2. Treatment of Income Earned from the Sale of Import Licenses: The AO treated the income from the sale of import licenses as central income, arguing that it was an incentive not derived from the export of tea. The CIT(A) reversed this, citing the ITAT's previous ruling that such income is integral to the plantation operations and should be treated as tea income under Rule 8. The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal on this issue. 3. Deletion of Addition Being Share of Loss from Floral Extraction Operation Expenditure: The AO disallowed the loss from floral extraction operations, stating it was agricultural income and not business income. The CIT(A) deleted the disallowance, but the Tribunal found the CIT(A)'s order cryptic and lacking proper reasoning. The issue was remitted back to the CIT(A) for a detailed, speaking order. 4. Classification of Various Incomes as Part of Tea Operations under Rule 8: The assessee claimed various incomes as part of tea operations, which the AO treated as non-operating income. The CIT(A) provided partial relief based on the ITAT's earlier decisions but confirmed the balance amounts for both assessment years. The Tribunal noted that detailed submissions by the assessee were not considered by the CIT(A). Thus, the issue was remitted back to the CIT(A) for fresh consideration with the new details provided by the assessee. Conclusion: The appeals by both the Revenue and the assessee were partly allowed for statistical purposes, with certain issues remitted back to the CIT(A) for further consideration and detailed orders. The Tribunal emphasized the need for a speaking order from the CIT(A) on the remitted issues.
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