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TMI Blog2017 (9) TMI 1600X X X X Extracts X X X X X X X X Extracts X X X X ..... rein and the decision rendered thereon would apply with equal force for assessment year 2005-06 also except with variance in figures, if any. 2.1. Brief facts of this issue is that the assessee is engaged in the manufacturing and growing of tea including instant tea. The assessee company has 17 tea gardens of which 12 gardens are in Doars, 3 in Darjeeling and 2 in Assam. The assessee has blending unit in Siliguri and in instant tea unit at Matelli, Jalpaiguri. The assessee made payment of Rs. 1,18,20,026/- on account of Cess on green leaf and claimed the same as deduction. The ld. AO observed that in view of the judgment of Guwahati High Court in the case of Jorahat Group Ltd. vs. Agricultural ITO reported in 226 ITR 622, the cess on green leaf is deductible from the agricultural income only and not from the composite income. The assessee contended that the Hon'ble Jurisdictional High Court in the case of CIT vs. A.F.T. Industries Ltd. reported in 270 ITR 167 (Kol) has decided that the same was to be fully allowed from the composite income only. The Ld. AO however proceeded to make disallowance of the same in the assessment. The assessee submitted that the State of West Bengal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein it was held as under: "The respondent-assessee had paid cess on green leaf to the Government of Assam which was levied under Assam Taxation (On Specified Land) Act, 1990. In its income tax return, it had claimed the same as deduction which has been allowed by the High Court. The relevant discussion in this behalf is as under: "However, the learned Tribunal had held that the deduction is eligible after computing the income under Rule 8 and the apportionment is to be made only after the income is so computed. Such apportionment cannot be made before the deduction. Rule 8 of the Income Tax Rules, 1962 requires that the computation is to be made as if by fiction the entire income out of the tea grown and manufactured as income assessable under the Income Tax Act, 1961. In view of Rule 8, the income so computed is to be apportioned 60:40 of which 40 is assessable to tax apportionment of the 60% of the income so computed shall again be required to be computed under the Agricultural Income Tax Act. On the other hand, this 60% is exposed and becomes exigible to tax under the Agricultural Income Tax Act, without being required to be assessed under the said Act by reason of the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years, the Tribunal had deleted the disallowance. We find that this issue has been allowed in favour of the assessee year on year. Accordingly, we do not find any justifiable reason to interfere with the order of the Ld. CIT(A) as he has rightly followed the decision of the Tribunal in assessee's own case. Accordingly, ground no. 2 raised by the Revenue in this regard for both the years are dismissed. 4. Disallowance of depreciation on assets acquiring with NABARD fund - Rs. 13,36,356/- Ground No. 3 of assessment year 2003-04 The Ld. AO observed that the assessee acquired an office asset out of withdrawals from NABARD and claimed depreciation on such assets. The Ld. AO by referring to Section 33AB(6) of the Act had stated that utilization of the amount standing to the credit of the Tea Deposit Account for any 'expenditure' in connection with business should not be allowed in computing the income chargeable under the head 'profits and gains from business and profession'. The Ld. AO however fairly observed that this issue has been deleted by this Tribunal in assessee's own case for assessment year 2001-02 in I.T.A. No. 2557/Kol/2004 dated 10.06.2005 and that this disallowance is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,36,356/- on assets acquired by utilizing the amount withdrawn from NABARD deposit. 4.3. The Ld. CIT(A) appreciated the contention of the assessee and by placing reliance on the decision of this Tribunal in assessee's own case for assessment year 2001-02 (supra) deleted the disallowance of Rs. 13,36,356/- on account of depreciation. Aggrieved the Revenue is in appeal before us on the following grounds: 3. That on the facts and circumstances of the case the Ld. CIT(A) erred on facts as well as in law in holding that addition of Rs. 13,36,356/- as depreciation on assets purchased out of withdrawals from NABARD ignoring the fact that on this issue decision is pending before High Court. 4.4. We have heard the Ld. AR. We find that the issue, as rightly pointed out by the lower authorities in their respective orders, is already decided in favour of the assessee by the order of this Tribunal in assessee's own case in I.T.A. No. 2557/Kol/2004 dated 10.06.2005 wherein it was held as under: 5. The Learned Counsel for the assessee drew our attention to page 16 of the paper book filed which is Annexure-I enclosure to Clause -9 of form 3AC for the year ending on 31st March, 2001 of the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the assessee and he gave stress on Clause 8 of Section 33AB and submitted that as the assets sold or transferred within a period of 8 years from the year of acquisition is to be treated as profit and gains, Clause 4 is not applicable to the case of the assessee. He further drew our attention to page 4 of the assessment order wherein the A.O. has noted the contention of the assessee along with quarries raised by him the course of assessment proceedings. Besides this, he also cited case law reported in 37 ITR 66 in order to show that the Hon'ble Supreme Court in the case of Indian Molasses Co. Pvt. Ltd. vs. CIT has held that expenditure means what is to be paid out or away and is something going inrretrievably and thus, depreciation cannot be an expense. 6. On hearing the rival submissions and going through the case laws, we find force in the arguments made by the learned Counsel on behalf of the respondent assessee and we very much appreciate the conclusion arrived at by the Ld. CIT(A) while deleting the addition. Going through the provisions of law and appreciating the Scheme of NABARD the Ld. CIT(A) has rightly allowed the depreciation on the assets purchased fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee stated that it had inadvertently included such loss in computing the composite income and the said error was brought to the notice of the Ld. AO vide letter dated 21.12.2005 and requested him to rectify the said mistake and compute the total income in accordance with the law. The assessee stated that filing the revised return arose only in a case an assessee discovers any omission or any wrong statement in the return furnished. In this case, there is no omission or any wrong statement in the return filed and, therefore, there is no requirement under the law to file a revised return to rectify such mistake. The assessee further stated that the requirement of filing of revised return arises where the assessee makes a fresh claim for deduction after the return is filed. In such cases the Ld. AO has no power to entertain such claim otherwise than by way of a revised return. In support of it he referred to the decision of the Hon'ble Supreme Court in the case of Goetze (India) Limited Vs. CIT (284 ITR 323). In the said case, the Hon'ble Supreme Court made it clear that the said decision was restricted to the power of Assessing Officer to entertain the claim for deduction otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itting the assessee to raise the additional ground in accordance with the law. 5.2. The Ld. CIT(A) duly appreciated the entire contentions of the assessee and directed the Ld. AO to consider the loss on account of instant tea amounting to Rs. 55,85,662/- to the computation of the composite income and exclude the same from the business income computed after application of Rule 8(1) of the Rules. Aggrieved, the revenue is in appeal before us on the following grounds: 4. That on the facts and circumstances of the case, the Ld. CIT(A) erred on facts as well as in law in allowing the loss of Rs. 55,85,662/- incurred on instant tea export to be set off from the business income as arrived at after application of Rule 8 while holding the claim made by the appellant is not a fresh claim but only amounts to rectification and therefore, does not require submission of a revised return. 5.3. We have heard the Ld. AR. We find that the detailed submissions made by the assessee were duly appreciated by the Ld. CIT(A) in his order and has been dealt with in detail in his order. We find that the assessee had only sought for rectification of a particular claim vide its letter dated 21.12.2005 bef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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