TaxTMI 
TaxTMI 
2026 (7) TMI 513
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....ome Tax Act, 1961 [for short 'the Act'] the appellant-assessee has proposed the following substantial questions of law arising out of the order dated 14.05.2025 passed by the Income Tax Appellate Tribunal, Ahmedabad [for short 'the Tribunal'] in ITA No. 1552/AHD/2024 for the Assessment Year 2018-19: "A. Whether on the facts and in the circumstances of the case and in law, Income-tax Appellate Tribunal, was right in law in upholding the allocation of employees benefit costs of Rs. 25,88,39,481/- on proportionate basis of revenue ignoring the evidence/material & nature activities carried on by different employees? B. Whether on the facts and in the circumstances of the case, the conclusion reached by Income-tax Appellate Tri....
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....perations was 12.06% only, whereas, the ratio of total expense to total revenue for the entire operation of the assessee was 92.06%. The Assessing Officer, therefore, re-worked the allocation of Employees Benefit Expenses amounting to Rs. 2,58,39,481/-, Finance costs, Depreciation and amortization expenses and other costs totaling to Rs. 12,85,71,594/- and, after re-working, allocated the total expenses of Rs. 1,17,09,303/- towards agricultural expenses and agricultural income was accordingly re-worked and excess agricultural income of Rs. 66,55,696/- was added to the total income. 3.5 The assessee had also claimed deduction under section 80JJA of the Act which was also disallowed by the Assessing Officer. 3.6 Being aggrieved, the ass....
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....s specialized one wherein skilled and qualified persons were engaged for growing/inspection/maintenance etc. From the nature of agricultural activity as explained by the assessee, it is apparent that the process was not only specialized but also labour intensive as the upper growth of each plant had to be cut off and that such activity couldn't have been carried out with manpower of only 8 employees over an area of 18512 sq.mt (4.57 acre). With such specialized and labour-intensive deployment of manpower, the salary expenses and daily wages as allocated to agricultural activity is found to be too low, considering the total employee benefit expense incurred by the assessee. Therefore, the allocation of employee benefit expense on pr....
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....aced before the Assessing Officer while giving a reply dated 06.09.2023 to justify auditor's remuneration at Para 7.5 on Page 114 of the paper-book. 4.2 It was therefore, pointed out that only one file pertained to the agricultural operations whereas, 70 box files pertained to non-agricultural activities and therefore, the Assessing Officer was not justified in making allocation of the expenses on the basis of the revenue and the Tribunal ought to have remanded the matter to justify the explanation along with other heads of expenses for ascertaining the expenses for agricultural activity carried out by the assessee. 5. Having heard the learned advocate for the appellant, we are of the opinion that the Tribunal has arrived at a finding....