2012 (1) TMI 248 - AT - Income Tax

Revenue's Appeal Partially Allowed for Statistical Purposes, Other Grounds Dismissed

D.C.I.T., Circle-4, Kolkata Versus Jayshree Tea & Industries Ltd., Kolkata

The Tribunal partially allowed the Revenue's appeal for statistical purposes regarding the deletion of expenses under 'Other Repairs', remitting the issue ... Expenditure towards community development - Held that:- Exact nature of the expenditure is not clear either from assessment order or from the CIT(A)or the ld. CIT(A) for assessee has not filed any paper book describing the exact nature of the expenditure we set aside the orders of the CIT(A) and remit back the issue to the file of AO for fresh adjudication and decide the same as per law after giving a reasonable opportunity of being heard to assessee. Issues:1. Deletion of addition of &8377; 1,63,53,280/- on account of cess on green leaf.2. Deletion of disallowance of &8377; 12,87,900/- on account of notional interest on sticky loan.3. Deletion of disallowance of &8377; 38,66,258/- on account of depreciation on plant and machinery.4. Deletion of disallowance of &8377; 10,00,000/- from expenses under the head 'Other Repairs'.5. Addition of &8377; 76,08,652/- on account of expenses to ascertain book profit.Deletion of Addition on Cess on Green Leaf:The Revenue appealed against the deletion of &8377; 1,63,53,280/- addition on cess on green leaf. The Revenue argued that the expenses were related to agricultural operations and cited a pending SLP before the Supreme Court. The Tribunal dismissed this ground as it was covered by a previous ITAT order in the assessee's case.Deletion of Disallowance on Notional Interest:The Revenue contested the deletion of &8377; 12,87,900/- disallowance on notional interest on a sticky loan. The Tribunal upheld the CIT(A)'s decision, stating it was consistent with a previous ITAT order in the assessee's case.Deletion of Disallowance on Depreciation:The Revenue challenged the deletion of &8377; 38,66,258/- disallowance on depreciation on plant and machinery. The Tribunal found no infirmity in the CIT(A)'s order, as it followed a Madras High Court judgment. Consequently, this ground was dismissed.Deletion of Disallowance on Other Repairs:The Revenue disputed the deletion of &8377; 10,00,000/- disallowance from expenses under 'Other Repairs'. The Tribunal noted the nature of the expenditure towards community development and remitted the issue back to the AO for fresh adjudication due to lack of clarity on the exact nature of the expenditure.Addition on Expenses for Book Profit:The Revenue appealed against the deletion of &8377; 76,08,652/- addition on expenses to ascertain book profit. The Tribunal upheld the CIT(A)'s decision, citing a judgment of the Madras High Court. Consequently, this ground was dismissed.In conclusion, the Tribunal partially allowed the Revenue's appeal for statistical purposes regarding the deletion of &8377; 10,00,000/- from expenses under 'Other Repairs', remitting the issue back to the AO for fresh adjudication. The other grounds raised by the Revenue were dismissed based on previous ITAT orders and the application of relevant case law.