TaxTMI 
TaxTMI 
2025 (4) TMI 2069
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....non acceptance of cultivation of mushrooms as agricultural income, as the necessary features/characteristics ton treating it as agricultural income do not exist for mushroom cultivation. 2. Whether the CIT(A) has erred in deleting addition made on account of disallowance to the tune of Rs. 64,26,27,000/- u/s 35AD where the AO held that chain cold storage is merely on addition to the exiting production plant 3. Whether on the facts and circumstances of case and in law, the CII (A) has erred in allowing the addition of final account & book profit after the financial accounts were audited and finalized and signed on 27.08.2013 and approved, in the continuation of Decision of Hon'ble Supreme court in the case of Apollo Tyres Ltd. 122 Taxmann 562. 4. The Ld. CIT(A) has erred in accepting an perverse claim that during the finalization of accounts, it came to the notice of the company that sale has been purportedly recognized because if it was noticed during finalization on 27.08.2013, it would not have been approved ard signed by all the parties including auditor & board of directors involved. 5. The assessee craves leave, to add, alter or amend an....
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....gh court held in the case of the assessee in the AY-2012-13 that income-from growing mushrooms is agricultural income in view of the Special bench decision of Inventaa Industries. 10. We have heard the rival submission and have carefully perused the materials on record. In view of the discussion as above and the judgment of the Hon'ble Delhi High Court in the case of the assessee itself in AY 2012-13, this issued is covered in favour of the assessee. Following respectfully the decision of the hon'ble High Court income from growing mushroom are held to be exempt income u/s 10(1) being agricultural income and we uphold the decision of the CIT(A) directing the AO to delete the addition so made. The ground of the Revenue is thus dismissed. 11. With respect to the Ground no. 2 regarding disallowance of Rs 64,26,27,000/- u/s 35AD of the Act, the facts in brief are that the assessee has claimed a weighted deduction @ 150% of the value of plant and machinery for installation of cold chain storage facility at Gujarat Plant as per the provisions of Section 35AD(1A) of the Act. The AO held that the food processing business of the assessee was already in existence and a new facility ....
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..... We find that Section 35AD(1A) as on 01.04.2013 provided for 150% weighted deduction of the expenditure incurred for plant and machinery in specified businesses on fulfilment of certain conditions. The setting up and operating a cold chain facility is such a specified business mentioned in section 35AD(8)(c)(i). The conditions to be fulfilled for claiming such deduction for setting cold chain facility are as under: i) it should not be set up by splitting up or reconstruction of a business already in existence. ii) It is not set up by the transfer of previously used machinery for any purpose. 18. We find that the assessee has purchased all new machinery for setting up the cold chain facility in addition to the existing business. The Assessing Officer has nowhere stated or made a case that the Cold Chain Facility was formed by splitting up or reconstruction of the old business. We are therefore of the considered view that the assessee has complied with all the conditions and thus, the deduction claimed u/s 35AD(1A) has been rightly allowed by the CIT(A). The ground of the Revenue is thus dismissed. 19. With respect to ground no. 3 and 4 regarding rejection of....
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.... by ICAI provides that if at the time of raising any claim, it is unreasonable to expect ultimate collection, revenue recognition should be postponed." Further as per AS-4 on "Contingencies and Events occurring after the Balance Sheet date" issued by ICAI states that the assets and liability should be adjusted for the events occurring after the balance sheet date. Thus, it was compulsory for the assessee to de-recognize the revenue booked on sale of plant and machinery to M/s Simplot because the party had already filed a suit for recovery of its claim against the assessee in Arbitration Court of Singapore. The ld AR further informed that the Singapore Arbitration Court passed an award vide its order dated 23/03/2020 wherein the assessee has been asked to pay damages of USD 16,70,998/- to Simplot (Refer para 902 page 174 of the Arbitration Order). Further, the Arbitration Court held that the assessee should bear 90% of the Arbitration cost and the claimant should bear 10% (Para 955 Page 189 of the Arbitration Order). 24. The ld AR further submitted that even if it is assumed that the restated financials were not adopted in the AGM of the assessee company, then while considering t....
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....he purpose of computing book profit under the provisions of Section 115JB of the Act. The profit computed by the assessee in the restated financial statements is not in violation of any provisions of the Companies Act. Further, the said financial statements bears the signature of board of directors and the statutory auditor of the assessee company which denotes that the said financials have been prepared taking into consideration accounting policies and accounting standards suggested under the said Act. The fact that the amount of Rs. 34.15 crores has not accrued to the assessee as income, has nowhere been denied by the AO in the assessment order. Further, there is no accounting standard which suggests that the income which has not accrued/earned by the assessee should be considered as its profit/turnover in its financial statements. The AO himself has also not considered said amount as income of the assessee while computing the taxable income as per the normal provisions of the Act. Even if for the sake of argument, it is assumed that the restated financials were not adopted in the AGM of the assessee company, then while considering the original financials of the assessee....
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....e it is not allowable u/s 36(1)(va), it cannot be held allowable 43B which is a section restricting allowability of otherwise allowable payment/expenses? 3. Whether on the facts and circumstances of case and in law, the CIT(A) has not erred in deleting the addition on account of miscellaneous expenses as despite being provided repeated opportunity the vouchers could not be produced for verification? 4. The assessee craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing." 29. Ground No. 1 pertaining to exemption claimed u/s 10(1) for agricultural income from mushroom cultivation has been discussed elaborately and decided by us in favor of the assessee while deciding Ground No. 1 in A.Y 2003-14. Respectfully following the same, we direct the Assessing Officer to delete the addition of Rs. 12,97,58,000/- claimed u/s 10(1) of the Act. The ground of appeal of the Revenue is thus dismissed. 30. The ground no 2 is with regard to disallowance of Rs. 21,94,347/- claimed u/s 36(1)(va) for delay in deposit of employees' contribution to PF and ESI. The issue of ESI/PF is decided against the assessee by the hon'ble Supreme C....