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TMI Blog2022 (7) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable - As assessee placed reliance on the decision in the case of Neeraj Vanijya Pvt. Ltd. [ 2008 (10) TMI 723 - ITAT KOLKATA] - We find that the contention of the assessee is covered by the said decision and respectfully following the same, we allow this ground in favour of the assessee. Contribution to molasses reserve while arriving at book profit u/s 115JB - HELD THAT:- Since we have already dealt with the issue relating to applicability of section 115JB in the case of assessee whereby we have held that it is not applicable, this ground become infructuous and accordingly is disposed off as infructuous. Small contributions to local people and institution on request of employees and business associates - allowable as business expenses u/s 37(1) or not? - Counsel submitted that inadvertently these were accounted under the head charity and donation in the books of account which cannot be the basis for their disallowance - HELD THAT:- We note that the expenses are towards the community and social welfare activities which have taken place in the vicinity of work area of the assessee but the ld. AO is of the view that this expenditure is not related to the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up for hearing before the Bench. We note that Cross-objection is an independent appeal under Rule 22 of the Income-tax (Appellate Tribunal) Rules, 1963 (ITAT Rules) which is reproduced as under 22. A memorandum of cross-objections filed under sub-section (4) of section 253 shall be registered and numbered as an appeal and all the rules, so far as may be, shall apply to such appeal. [emphasis supplied by us by underline] 2.1. The Cross-objection involves substantial relief which is not meant only to support order of ld. CIT(A) about the relief allowed. The Cross-objection has been admitted as an appeal which warrants its due adjudication. The grounds of cross-objection filed by the assessee were directed to be submitted in concise form which is placed on record vide letter dated 19.08.2019. Accordingly, the revised and concise grounds of cross-objection to be adjudicated upon are reproduced as under: A. Grounds to support order of CIT(A): 1. Learned CT (A) has rightly deleted addition in respect of liabilities for business expenses amounting to Rs.69,54,123/- , the order of Ld. CIT(A) may be confirmed on this issue. (original ground no.A.1) B. Grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation allowable, correctly on (A) new assets and (b) on correct WDV of molasses tanks, as claimed before lower authorities. 7) For that appellant seeks kind permission of the Hon ble Tribunal, to raise new contentions and new grounds of appeal, if required, in interest of justice. 3. Before us, Shri D.K. Kothari, AR represented the assessee and Smt. Ranu Biswas, ACIT represented the Revenue. 4. Brief facts of the case are that assessee is a limited company and is in the business of manufacturing of sugar. It has its registered office at Kolkata and factory at Sasa Musa, Dist. Gopalganj, Bihar. Assessee filed its return of income on 30.09.2014 reporting total income as nil . Statutory notices were issued which were complied by the assessee. In the course of assessment proceedings, ld. AO asked the assessee to furnish working of book profit under the provisions of section 115JB of the Act, to which assessee submitted that it is not liable to pay tax on book profit and the provisions of section 115JB of the Act are not applicable in its case. Ld. AO determined the business income at Rs. 20,12,960/- after making certain additions and disallowances. Assessee had rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal. 8. We note that ld. counsel has submitted paper books in three volumes which are placed on record. A synopsis for each of the ground taken in the cross-objection is also placed in the paper book at page no. 194 to 196. Considering the said synopsis, we deal with each of the ground in the cross-objection as under: 8.1. Ground No. 1 is general in nature and, therefore, is not adjudicated upon. On ground no. B.2.a, in respect of non-applicability of provisions of section 115JB of the Act, ld. counsel reiterated the submissions made before the authorities below which are not reproduced for the sake of brevity. Ld. Counsel however placed reliance on the recent judgment of Co-ordinate Bench of ITAT, Kolkata in the case of The United Provinces Sugar Co. Ltd. vs ITO in ITA No. 1956/Kol/2018 for A.Y. 2013-14 dated 01.04.2021 which has dealt on the identical issue. Ld. Counsel laid emphasis on the contention that the authorities below ought to have followed the binding precedents, rule of consistency and applied view in favour of the assessee to allow the claim and not to deny the relief by ignoring the binding precedents. He also submitted that there are no contrary jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (+) 4,47,51,901 Less: Deductions/Relief: Excise duty paid u/s 43B upto 05.08.12 1,64,69,750 Gratuity paid 16,38,428 Leave Salary paid 2,28,809 Bonus paid 7,01,931 Excise duty on closing stock of previous years paid during the year 1,73,47,476 Normal Depreciation as per TAR Annex-II 11834475 Less: Depreciation on Molasses tank 125272 1,17,09,203 Additional Depreciation u/s 32(1)(iia) as per TAR 16,31,468 Loss: Being Unabsorbed depreciation kept apart c/f 4,97,27,065 -49,75,164 Gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. AO may be directed to exclude the amount of capital receipt (credited in the profit loss account) in view of judgments of Calcutta ITAT in case of Balrampur Chini Mills Ltd. and Pratappur Sugar Ind. Ltd. 2. Facts of the case are that the business of the assessee company was production and sale of sugar and its by-product molasses. The assessee filed its return showing nil income on I.12.2003. The return was processed u/s 143(1) on 20.4.2004. The case was selected for scrutiny. Notices u/s. 143(2) and 142(1) alongwith a questionnaire were issued. The Assessing Officer observed in this case that the assessee while computing book profit had reduced capital receipt on account of expansion of sugar mill under sugar incentive scheme, 1993 of Rs.10,60,588/-. The Assessing Officer did not accept the assessee s contention in respect of reducing the capital receipt following the judgment of the Hon ble Supreme Court in the case of Apollo Tyres Ltd. -Vs- CIT 255 ITR 273, Therefore, he completed the assessment determining income u/s. 115JB. Aggrieved by the order of the Assessing Officer the assessee preferred appeal before the Ld. CIT(A). The Ld. CIT(A) in First appeal, confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5JB of the Act, when the GTI and total income of the assessee are Nil and no taxes payable, is adjudicated in favour of the assessee, respectfully following the decision of Hon ble Jurisdictional High Court on this issue. 9.4. Considering the facts on record and respectfully following the binding judicial precedents including that in the assessee s own case all of which referred above, we hold that provisions of section 115JB of the are not applicable in the case of the assessee when the GTI and total income of the assessee are Nil and no taxes payable. Accordingly, the ground of appeal of the assessee is allowed. 10. Coming to ground no. B.2.b where the assessee has claimed that it is not a dividend paying company and, therefore, for this reason also section 115JB is not applicable, ld. Counsel of the assessee placed reliance on the decision of Co-ordinate Bench of ITAT, Kolkata in the case of Neeraj Vanijya Pvt. Ltd. vs ITO in ITA No. 1504/Kol/2008 for A.Y. 2005-06, dated 31.10.2008. We find that the contention of the assessee is covered by the said decision and respectfully following the same, we allow this ground in favour of the assessee. 11. Ground no. B.3 relates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amt of contribution paid to SDO gopalganj for Republic day 26th Jan 4,000.00 08.02.12 Amt paid through mr. kamran for garyakhal Yojna 250.00 14.02.12 Amt of donation paid to Viplav Pustakalaya, Gopalganj 2,000.00 15.02.12 Amt paid to poor person thr Mr. jamaluddin 100.00 29.03.12 Amount paid to student, teacher of Madarsa on the death anniversary of Late Hajjin Sogra Begum 1,814.00 29.3.12 Amt of charity to needy 180.00 31.3.12 Amount paid thr Mr. kamran for Champaran mahautsav 2,500.00 31.3.12 Amt of Charity paid to Debri Madarsa 420.00 Kolkata office: Amt of Charity paid to needy, poor, orphans and handicaped persons during the year 2011-12 Amount paid towards donation to inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of depreciation actually allowed in earlier years, if any. There has not been any release from molasses storage tank fund by the concerned authorities. As depreciation has not been claimed / allowed the actual cost may be carried forwarded as W.D.V. for allowing depreciation in future. Molasses storage tank reserve amount is diverted at source by way of overriding title as held by the Supreme Court. Therefore, depreciation on molasses tanks is allowable because entire cost has been met by us. We claimed and AO allowed depreciation till assessment year 1988-89 and thereafter depreciation was not claimed and allowed, although, details were furnished in depreciation chart every year and amount allowable on molasses tank disallowed by reducing total depreciation allowable. Therefore, written down value c/f from assessment year 1988-89 and cost of additions for molasses tanks added thereafter is WDV eligible for depreciation allowance. The information is as follows: WDV c/f from AY 1988-89 6,80,362 Additions in PY relevant to AY: 1989-90 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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