TaxTMI 
TaxTMI 
2017 (1) TMI 314
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....ing in animal feeds, food supplements, edible oils, fuel pellets and generation of wind power etc. The company is having its major parts at Sangli and is having solvent extractions, refineries and animal feed plants. It filed its return of income on 14-10-2010 declaring total income of Rs. 1,70,58,190/-. During the course of assessment proceedings the Assessing Officer noticed that the assessee has claimed deduction u/s.80JJA amounting to Rs. 2,32,74,413/- being profit and gains from business of biodegradable waste. According to the Assessing Officer the waste to which section 80JJA would apply is only the bio-degradable waste which is generated out of various activities of the urban population within the municipal limit and not any waste which is generated in rural areas or has no direct nexus with the activities of the urban population in municipal limits. Referring to provisions of section 80JJA and Circular No.712 dated 23-12-1998 and Circular No.779 dated 14- 09-1999 issued by CBDT the Assessing Officer held that for claiming deduction u/s.80JJA the conditions envisaged should be satisfied. However, in the instant case the assessee has not satisfied most of the conditions beca....
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....hat the issue stands decided in favour of the assessee by the decision of the Tribunal in assessee's own case for A.Y.2 008-09 and 2009-10. 10. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the issue relating to denial of deduction u/s.80JJA had come up before the Tribunal in assessee's own case in the 2 preceding assessment years. The Tribunal after considering the rival arguments made by both the sides decided the issue in favour of the assessee and dismissed the ground raised by the Revenue on this issue by observing as under : "11. The first issue raised by the Department in ground no. 1 relates to claim of deduction u/s. 80JJA of the Act allowed by the Commissioner of Income Tax (Appeals). The assessee company is engaged in the business of manufacturing pellets for fuel from bio degradable waste. The assessee is collecting bio-degradable waste such as groundnut husk, baggase from nearby areas and after processing the same the assessee is making small sizes fuel pellets to be used as fuel. The A....
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....e as waste is evident from Circular dated 4/2/2006 issued by the Sugar Commissioner, Maharashtra State, Pune. Besides the ITC classification of the Exim policy also classifies bagasse as a waste of sugar industry under Chapter 23 Heading 23.20 thereof. Further, the Central Excise Tariff Act 1985 also regards bagasse as waste of sugar manufacture and is classified under Chapter 23 heading 23.01 of the Central Excise Tariff Act, 1985. We do not agree with the submissions of the appellant's Counsel that collection would mean collecting free of charge and not by purchasing the same. The word "collecting" means to gather; to fetch. It is a neutral word and does not mean collection for consideration or collection without consideration. It is an admitted/undisputed position that the respondent assessee has collected bagasse from sugar factories after having made payment for the same. Therefore, the aforesaid requirement of collecting as provided under Section 80JJA of the Act is satisfied. It is a undisputed finding of fact that the collected bagasse has been used by the respondent assessee to make briquettes for fuel as that indeed is the business of the respondent-assessee. The reli....
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....ar under consideration on the basis of the disallowance made in A.Y. 2009-10 since the 2 windmills are not owned by the assessee. The assessee explained that the windmill was purchased from M/s Nav Maharashtra Chakan oil Mills (NMCOML) and the sale bill has been issued in its favour and the windmill was in its possession and it was being used as an owner to the exclusion of all others. 14. The Assessing Officer observed that the monthly 'windmill reading sheets' for the electricity generation produced by the assessee showed the name of the owner as NMCOML. The Assessing Officer also found that the windmill was not registered or transferred in the name of assessee and. the electricity generated is purchased by the assessee from NMCOML by means of book entries. The Assessing Officer held the transaction of transfer by way of the purchase of windmill by the assessee to be a sham transaction. The Assessing Officer, therefore, disallowed the depreciation on the two windmills amounting to Rs. 4,38,400/- as neither the asset stood in the name of the assessee nor put to use by the assessee during the year, 15. Before CIT(A) it was submitted that the windmill was purchased and....
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....ll tax matters by recognizing the beneficial owner for liability as well as any deduction. It took the view that, such view is clear, equitable and consistent with justice and such a view cannot be lightly dismissed, while the Finance Act, 1987 recognised beneficial ownership for computation of property income for income-tax, capital gains tax, wealth-tax and gift-tax, the need for clarification in respect of depreciation allowance was overlooked. The controversy got settled in respect of right to depreciation for beneficial owner in the decision of the Supreme Court in the case of Mysore Minerals Ltd. cited supra and also relied upon by the appellant. The concept of ownership in different context now gets reconciled consistent with earlier decision in the case of R.B. Jodha Mal Kuthiala Vs CIT cited supra and CIT Vs Poddar Cement Pvt. Ltd. (1997) 226 ITR 625 (SC). Hence, in view of these precedents, the Karnataka High Court had little difficulty in granting depreciation in respect of a property where the assessee had the use of the property, though title vested with a cooperative society in the case of Surana Pharmaceuticals P. Ltd. Vs CIT (2000) 243 ITR 248 (Kar). The same view i....
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....t of godown-cum-showroom purchased but, not registered in its name. 5.4 In view of the above facts and the ratio of the judicial citations the disallowance made by the A.O. with respect to the depreciation on windmills amounting to Rs. 21,92,000/- is liable to be deleted. Ground No.4 raised by the appellant is allowed. 5.3 In view of the above, as the facts and the legal position has not undergone any change in the year under consideration, the ground being the same as in A.Y. 2009-10, following the decision taken by me for the above year, the ground raised in this regard is liable to be allowed for the year under consideration also. 5.4 In view of the above, ground of appeal No.4 raised by the appellant is allowed." 17. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 18. The Ld. Counsel for the assessee at the outset submitted that the Tribunal in assessee's own case for A.Y. 2008-09 and 2009-10 has decided the issue in favour of the assessee and the grounds raised by the Revenue have been dismissed. Therefore, this being a covered matter the grounds raised by the Revenue on this issue should be dismissed. 19. The Ld. Departmenta....
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....ashtra State, Mumbai clearly shows the modification carried out in respect of the undertaking eligible to claim sales tax benefit. The said modification as per the certificate issued by the sales tax department is effective from 05-12-2007 in favour of the assessee. The ld. AR also referred to Memorandum of Understanding dated 01-06- 2007 between NMCOML and the assessee with regard to transfer of windmill and mobility in respect thereof at pages 137 to 143 of the paper book, as well as the letter written by NMCOML dated 01-06-2007 addressed to Enercon for transfer of A.M.C. in the name of the assessee at page 130 of the paper book. Thus, from the perusal of documents on record it is clearly evident that the assessee had purchased windmill from NMCOML during the financial year 2007-08 and is eligible to claim depreciation on the windmill. The Commissioner of Income Tax (Appeals) has accepted the depreciation claim of the assessee after considering the facts of the case and documents on record. The Commissioner of Income Tax (Appeals) has observed as under: "5.3 In the present case, the appellant has been using the windmills, sales bill has been issued in its favour, it has ....
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....ised by the appellant is allowed." The ld. DR has not been able to controvert the findings of First Appellate Authority. Thus, in view of the documents on record we do not find any infirmity in the findings of Commissioner of Income Tax (Appeals) in accepting the claim of depreciation of the assessee. Accordingly, ground nos. 2 and 3 raised by the Department in the respective appeals are dismissed being devoid of any merit. 15. The third issue raised by the Department in ground no. 4 is with respect to disallowance on account of Employees' contribution to Provident Fund and ESIC and Labour Welfare Fund as the assessee had made contributions in the respective funds after the due date as specified under the provisions of relevant Acts. The ld. AR has contended that although the contribution to the above funds were made after due date as specified under the relevant Acts, but before the due date of filing of return of income under the Income Tax Act. This fact has not been disputed by the Department. The Hon'ble Supreme Court of India in the case of Commissioner of Income Tax Vs. Alom Extrusions Ltd. (supra) has held that the contributions made after due date as prescribed u....
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.... not otherwise. It transpires that Industry once again made representations to the Ministry of Finance to remove this anomaly. The result was that an amendment was inserted which came into force with effect from 1st April, 2004 and two changes were made in section 43B firstly by deleting the second proviso and further amendment in the first proviso which reads as under:- "Provided that nothing contained in this section shall apply in relation to any sum which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return." 15. In this manner, the amendment provided by Finance Act, 2003 put on par the benefit of deductions of tax, duty, cess and fee on the one hand with contributions to various employees' welfare funds on the other. All this came up for consideration before the Hon'ble Supreme Court in the case of Alom Extrusions Ltd. (supra). The Tribunal in the case at hand relied upon the said ....
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....lls, then there was no positive income earned by the assessee from the windmill till the year under consideration. Relying on the decision of Hon'ble Supreme Court in the case of Pandian Chemicals Ltd. Vs. CIT reported in 262 ITR 278 and Sterling Foods Ltd. reported in 237 ITR 579 and Liberty India Ltd. reported in 317 ITR 218 he held that sales tax entitlement do not constitute profit and gains derived from the assessee's industrial undertaking for the purpose of computing deduction u/s.80IA(4). He accordingly disallowed claim of deduction of Rs. 7,91,827/-. 25. Before CIT(A) the assessee submitted that the windmill owned was engaged in the activity of generation of power and therefore any income of the activity of the undertaking qualifies for deduction u/s.80IA(4) of the Act. Therefore, the assessee is entitled to deduction u/s.80IA(4). Further, there was no sale of sales tax benefit during the year under consideration. 26. Based on the arguments advanced by the assessee the Ld.CIT(A) allowed the claim of deduction by observing as under : "5.2 The facts brought on record have been considered and perused carefully. The only issue disputed relates to the disallowance of t....
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....ssessee's own case in the immediately 2 preceding assessment years. The Tribunal restored the issue to the file of the Assessing Officer with the following direction : "20. The assessee has claimed deduction u/s. 80IA(4) on the entire sale proceeds which include sales tax incentive. The ld. AR of the assessee fairly conceded that the assessee is not eligible to claim deduction u/s. 80IA(4) on the sales tax incentive receipts in view of the decision of Co-ordinate Bench of the Tribunal in the case of Lap Finance and Consultancy P. Ltd. Vs. Addl. Commissioner of Income Tax (supra). However, the assessee is claiming deduction u/s. 80IA(4) in respect of remaining amount. In support of his submissions the ld. AR has drawn support from the decision of Pune Bench of the Tribunal in the case of Serum International Ltd. Vs. Addl. CIT in ITA Nos. 290 to 292/PN/2010 for the assessment years 2004- 05 to 2006-07 decided on 28-09-2011. We are of the considered view that this issue needs a revisit to the file of Assessing Officer. The Assessing Officer shall re-examine the claim of assessee in respect of deduction u/s. 80IA(4) in the light of decision of Pune Bench of the Tribunal in the case ....
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.... the assessee is in appeal before us. 37. The Ld. Counsel for the assessee at the outset filed a chart showing the details of payment of employees' contribution to PF and ESIC. Referring to the said chart he submitted that the entire payment has been made before the due date of filing of return of income. Referring to the decision of Hon'ble Bombay High Court in the case of Ghatge Patil Transports Ltd. reported in 368 ITR 749 he submitted that since the assessee has made the payments before the due date of filing of the return, there cannot be any disallowance. Further, identical issue has been decided by the Tribunal in assessee's own case for A.Yrs. 2008-09 and 2009-10. He accordingly submitted that the ground raised by the assessee should be allowed. 38. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). 39. We have considered the rival arguments made by both the sides, perused the orders of the AO and CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer disallowed an amount of Rs. 3,74,577/- being employees' contribution to PF....