Income Tax Appellate Tribunal - Pune
Chitalkar Milk Products Pvt. Ltd.,, ... vs Assistant Commissioner Of ... on 27 June, 2018
आयकर अऩीऱीय अधधकरण "बी" न्यायऩीठ ऩण
ु े में ।
IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH, PUNE
श्री डी. करुणाकरा राव, ऱेखा सदस्य, एवं श्री ववकास अवस्थी, न्याययक सदस्य के समक्ष ।
BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM
आयकर अऩीऱ सं. / ITA No.764/PUN/2016
यनधाारण वषा / Assessment Year : 2011-12
Chitalkar Milk Products Pvt. Ltd.,
A/p. Deulgaon Siddhi, Tal.-Nagar,
Distt.-Ahmednagar
PAN : AACCC7753M
.......अऩीऱाथी / Appellant
बनाम / V/s.
Assistant Commissioner of Income Tax,
Ahmednagar Circle, Ahmednagar
......प्रत्यथी / Respondent
Assessee by :NONE
Revenue by : Shri Mukesh Jha
सन
ु वाई की तारीख / Date of Hearing : 26-06-2018
घोषणा की तारीख / Date of Pronouncement : 27-06-2018
आदे श / ORDER
PER VIKAS AWASTHY, JM :
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-2, Pune dated 02-12-2015 for the assessment year 2011-12.
2ITA No. 764/PUN/2016, A.Y. 2011-12
2. The notice of appeal was first issued to the assessee through RPAD on 21-12-2017 for 29-01-2018. On the said date the Bench did not function and the appeal was adjourned to 11-04-2018. On 11-04-2018 none appeared on behalf of the assessee, hence, the appeal was adjourned to 26-06-2018. A fresh notice was issued to the assessee on 12-04-2018 for 26-06-2018. The notice of appeal was duly served as is evident from the acknowledgment card available on record. On 26-06-2018 despite service of notice none has appeared on behalf of the assessee nor any letter seeking adjournment has been filed by the assessee. It appears that the assessee is not keen to pursue the appeal. In such circumstances, we proceed to decide the appeal with the assistance of ld. DR and on the basis of material available on record.
3. The brief facts of the case as emanating from records are : The assessee is engaged in the business of collecting milk from local farmers and selling the same to M/s. Parag Milk Products Ltd. The assessee is also processing the milk for sale in retail. The assessee filed its return of income for the impugned assessment year on 21-09-2009 declaring loss of Rs.29,17,325/-. A survey action u/s. 133A was carried out in the case of assessee on 04-02-2011. During the course of scrutiny assessment proceedings, the Assessing Officer observed that the assessee has received subsidy from NABARD amounting to Rs.28,06,200/- in the period relevant to the assessment year under appeal. The assessee treated the subsidy as capital receipt. The Assessing Officer held the subsidy as revenue in nature and added the same in the income returned by the assessee. 3 ITA No. 764/PUN/2016, A.Y. 2011-12
Aggrieved by the assessment order dated 28-10-2013, the assessee filed appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) by placing reliance on the decision of Hon‟ble Supreme Court of India in the case of Sahney Steel & Press Works Ltd. etc. etc. Vs. Commissioner of Income Tax reported as 228 ITR 253 upheld the findings of Assessing Officer and dismissed the appeal of assessee. Now, the assessee is in second appeal before the Tribunal assailing the findings of Commissioner of Income Tax (Appeals) on following grounds :
"1. The learned CIT (Appeals), Pune has erred on facts and in law in confirming the addition made by the AO amounting to Rs.28,06,200/- to the Returned Income of the Appellant.
2. The learned CIT (Appeals), Pune has erred on facts and in law that subsidy received is Revenue in nature and not Capital in nature, as claimed by the appellant.
3. The appellant craves leave to add, delete any grounds of appeal or to place further facts and evidence in support of its claim, contention before or during the course of hearing of appeal."
4. Shri Mukesh Jha representing the Department submitted that the assessee has failed to furnish complete details of subsidy i.e. object of scheme, nature, benefit conferred etc. either before the Assessing Officer or before the First Appellate Authority. During assessment proceedings the Assessing Officer only submitted that the subsidy amounts has been credited to the respective asset accounts on proportionate basis and hence the subsidy is capital in nature. During First Appellate proceedings, the Commissioner of Income Tax (Appeals) specifically asked the assessee to 4 ITA No. 764/PUN/2016, A.Y. 2011-12 furnish the complete details of subsidy received, copy of approval and copy of correspondence and agreements and the terms and conditions of the subsidy. However, the assessee has failed to furnish requisite documents in support of his contentions. The Commissioner of Income Tax (Appeals) in the absence of any cogent evidence to substantiate the subsidy received by the assessee as capital receipt has rightly upheld the findings of Assessing Officer in treating the subsidy as revenue in nature.
5. We have heard the submissions made by ld. DR and have perused the orders of authorities below. The only addition assailed by the assessee in appeal is with respect to subsidy Rs.28,06,200/- being treated as revenue receipt. The Commissioner of Income Tax (Appeals) upheld the findings of Assessing Officer in holding the amount of subsidy as capital in nature by placing reliance the decision of Hon‟ble Supreme Court of India in the case of Sahney Steel & Press Works Ltd. etc. etc. Vs. Commissioner of Income Tax (supra).
6. We observe that the scheme of subsidy was never furnished by the assessee before the authorities below. Thus, the authorities below had no occasion to examine the purpose of subsidy granted by NABARD. The Hon‟ble Apex Court has held that „purpose test‟ has to be applied before deciding the nature of subsidy received. In the absence of examination of a vital document which describes the nature and purpose of subsidy it would not be proper to hold the subsidy either revenue or capital in nature. Under such circumstances we deem it appropriate to remit this issue back to the file of Assessing Officer with a direction to assessee to furnish the 5 ITA No. 764/PUN/2016, A.Y. 2011-12 scheme under which subsidy has been received by the assessee from NABARD. The Assessing Officer after considering the same and after allowing reasonable opportunity of hearing to the assessee shall decide this issue afresh, in accordance with law.
7. In the result, the appeal of assessee is allowed for statistical purpose in the terms aforesaid.
Order pronounced on Wednesday, the 27th day of June, 2018.
Sd/- Sd/-
(डी. करुणाकरा राव/D. Karunakara Rao) (ववकास अवस्थी / Vikas Awasthy)
ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER
ऩुणे / Pune; ददनाांक / Dated : 27th June, 2018
RK
आदे श की प्रयिलऱवऩ अग्रेवषि / Copy of the Order forwarded to :
1. अऩीऱाथी / The Appellant.
2. प्रत्यथी / The Respondent.
3. आयकर आयुक्त (अऩीऱ) / The CIT(A)-2, Pune
4. आयकर आयुक्त / The CIT-I, Pune
5. ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, "बी" बेंच, ऩुणे / DR, ITAT, "B" Bench, Pune.
6. गाडड फ़ाइऱ / Guard File.
//सत्यावऩत प्रयत // True Copy// आदे शानुसार / BY ORDER, यनजी सधचव / Private Secretary, आयकर अऩीऱीय अधधकरण, ऩुणे / ITAT, Pune