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TMI Blog2016 (6) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee had claimed deduction under the provisions of section 80IB(11A) of the Act. The Assessing Officer held that the assessee is not engaged in the integrated business of handling, storage and transportation of food grains. The assessee is neither having labourers on its payroll nor the assessee is having own fleet of vehicles for transportation. Therefore, the assessee does not fulfill the requisite conditions for claiming deduction u/s. 80IB(11A) of the Act. The Assessing Officer disallowed the deduction of Rs. 12,03,353/-. Apart from the above, the Assessing Officer made certain other disallowances / additions in the income returned by the assessee. Aggrieved by the assessment order dated 30-12-2010, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) rejected the contentions of the assessee with regard to claim of deduction u/s. 80IB(11A) and partly allowed the appeal of the assessee by deleting certain other disallowances/additions made by the Assessing Officer. Against the findings of Commissioner of Income Tax (Appeals), both, the assessee and the Revenue are in appeal before the Tribunal. 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sting season. Accordingly, the requirement of transport vehicles goes up when there is frequent purchase of food grains. The ld. Counsel referred to profit and loss account for the year ending 31-03-2008 at page 44 of the paper book to show that the assessee has claimed warehousing receipts and expenses towards the transportation. The Counsel further referred to page 138 of the paper book to show that the assessee has claimed loading and unloading expenses. The ld. Counsel referred to letter written by the assessee to the Assessing Officer on 06-12-2012 at page 105 of the paper book. The ld. Counsel submitted that the assessee had submitted the list of vehicles along with the name of owners, details of transportation expenses and completion certificate of warehousing building. The ld. Counsel further submitted that as regards labour charges, the same are collected by the agency directly from the respective parties, although, the labour arrangements for loading and unloading at the warehouse is made by the assessee. To substantiate the payment of transportation expenses, the ld. Counsel referred to the ledger account for the period 01-04-2007 to 31-03-2008 at page 144 of the paper b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and meat products or poultry or marine or dairy products or from the integrated business of handling, storage and transportation of foodgrains, shall be hundred per cent of the profits and gains derived from such undertaking for five assessment years beginning with the initial assessment year and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains derived from the operation of such business in a manner that the total period of deduction does not exceed ten consecutive assessment years and subject to fulfilment of the condition that it begins to operate such business on or after the 1st day of April, 2001. Provided that the provisions of this section shall not apply to an undertaking engaged in the business of processing, preservation and packaging of meat or meat products or poultry or marine or dairy products if it begins to operate such business before the 1st day of April, 2009." 8. A bare perusal of the provisions of section show that deduction u/s. 80IB(11A) is available in the case of an undertaking deriving profit from the 'integrated' business of handling, storage and transportation of food grains. The vital wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has been included in the bill for storage as the bill for storage is inclusive of labour charges. On the other hand, the A.O. has pointed out that the said bills issued by the assessee for warehousing does not contain charges for handling and no separate bills are issued for handling charges and hence the handling charges are also not credited to profit & loss account. As regards transportation facility, the appellant has claimed that it has hired vehicles for transportation of food grains whenever required by the farmers and has debited the said expenses in the books of accounts. The A.O. has claimed that the appellant has not earned any transportation receipt from farmers and has not credited the same in the profit & loss account. In this regard, it has been noticed that the appellant has claimed the expenditure of transportation at Rs. 1,20,000/- on estimate basis at Rs. 10,000/- per month on the basis of self made vouchers. In view of the above facts, it has been observed that the assessee has not proved beyond doubt that it has provided handling services to the farmers as the contention of the assessee that he has employed skilled labour for handling the food grains is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed trucks. A perusal of records show, that the assessee has claimed ad hoc expenditure of Rs. 10,000/- per month for transportation that to on the basis of internal vouchers. The assessee has not placed on record any agreement/ arrangement with the transporters for the transportation of food grains nor any bills/invoices have been produced to substantiate the payment for transportation. Although, the assessee has placed on record a report from the Joint Monitoring Committee to show that the warehouses owned by the assessee are as per Govt. specifications, but this is not sufficient to claim deduction u/s. 80IB(11A). From the documents on record the only indelible inference that can be drawn is that the assessee is providing warehousing facilities for storage of food grains. The assessee has not been able to show from the records that the activities of handling, storage and transportation of food grains allegedly carried out by the assessee are part of one composite activity and are integrated in any manner. The assessee has failed to substantiate handling and transportation component of integrated business. 12. In so far as the objection of the Revenue for non-filing of Audit repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Income Tax (Appeals) cannot be considered as sufficient cause when the Assessing Officer has specifically taken a ground to disallow deduction to the assessee for non-filing of Audit report before him. The assessee has been negligent and callous in pursuing his cause before the authorities below. 15. Thus, in the facts of the case and documents on record, we are of the considered opinion that the assessee has failed to show that he is engaged in the integrated business of handling, storage and transportation of food grains and thus, the assessee is not eligible for claim deduction u/s. 80IB(11A) of the Act. 16. In the result, the appeal of the assessee is dismissed. ITA No. 863/PN/2012 (Revenue's Appeal) 17. The Revenue in its appeal has assailed the order of Commissioner of Income Tax (Appeals) in deleting the disallowance made by Assessing Officer u/s. 40(A)(3) on account of cash payment made by the assessee. The Revenue has also assailed the findings of Commissioner of Income Tax (Appeals) in treating Shri Prashant Jakite, Shri Sonaji Trimbakrao Bedke, Shri Sheikh Rashid Shaikh Chand and Shri Siddheshwar Kondiba Sontakke as agents of the assessee through whom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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