TaxTMI 
TaxTMI 
2011 (5) TMI 1092
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....isposed off by a consolidated order. ITA No.2243/Kol/2010 (by the Revenue) (A.Yr.2002-03): 2. There is a delay of 65 days in filing of the appeal by the Revenue for which the revenue has filed a condonation petition explaining the reasons for such delay. After considering the submissions by the Revenue the delay is condoned. 3. The Revenue has taken the following grounds :- "1. That on the facts and circumstances of the case, Ld.CIT(A), Kolkata has erred in law in allowing share and shade maintenance, nursery in filling and planting tea expenses amounting to Rs. 25,14,062/- as revenue expenses instead of capital expenses held by the A.O. on the basis of the decision of the Calcutta High Court in the case of Tasati Tea Ltd.....
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....AO has treated expenses aggregating to Rs. 25,14,062/- as capital expenditure and has alleged that the appellant did not file any evidence to suggest that there has been no extension plantation. It was contended by the appellant that the allegation of the A.O. is contrary to the facts and evidences already on record. The appellant had filed copies of reports submitted to the Tea Board proving that there was no extension plantation. It was submitted that the shade & shade maintenance expense were incurred for providing shade to the tea bushes spread through out the garden and has got no connection either with the extension plantation or replantation. A small expenditure of Rs. 6,385/- was incurred on tea nursery maintenance. The expenditure ....
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....ea. An area already abandoned, if replanted would be an expansion of the area under cultivation for the previous year concerned. The maintenance of an area already under cultivation cannot be treated to be an expansion of plantation nor can it be treated to be an investment or expansion adding to the capital already invested. On the other hand, it would be maintenance of the plantation itself and, therefore, is a revenue expenditure. It was submitted by the appellant that the reports of Tea Board submitted before the AO will prove that during the year under consideration there was no extension planting in the case of appellant and the expenses were incurred for maintenance of existing area under cultivation. It was pleaded by the appellant ....
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....activity and partly manufacturing activity. Income on account of foreign exchange fluctuation arises out of activity that is only incidental to the cultivation of tea. Thus foreign exchange fluctuation cannot be governed by rule 8." 9.1. On appeal the ld. CIT(A) has deleted the same by observing as under :- "15. I have considered the submission of the appellant and perused the assessment order. On careful consideration of the facts, I am of the opinion that the foreign exchange gain of Rs. 1,45,308/- is assessable as income from business because the said gain has arisen from the amounts receivable form the sundry debtors to whom tea was exported in earlier years. Thus, there is a direct nexus between the gain and the business ac....
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.... scrutiny assessment disallowed the same by observing as under :- "During the course of hearing it is gathered that the assessee claimed expenses of Rs. 23,53,863/- on account of Training and education expenses under the head Employees' welfare expenses account. The A/R was requested to furnish details of such expenses along with the name of the persons to whom such training was imparted and break up of expenses under this head. Vide letter dated 12/12/2006 a copy of resolution passed in the meeting of the Board of Directors dated 25/5/2001 was filed wherein it was resolved as follows :- "Resolved that the Board of Directors of the Company hereby accords its consent to the sponsorship of Mr.Abhyuday Prashad for overseas st....
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....hat after the completion of the studies Mr.Prashad has joined the company and performed the function of an executive director. Therefore, he requested to allow the same as business expenditure. 16. The ld. DR for the Revenue relied on the orders of the Revenue authorities and further pointed out that though the assessee has submitted that Mr.Prashad is giving advice from time to time during his studies also but there is no evidence to this effect. Therefore, he requested to uphold the action of the Revenue authorities. 17. After hearing the rival submissions and on perusal of the materials available on record, though Shri Prashad has joined the company as executive director after his completion it is observed that there is no substant....