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Joint Commissioner of Income-Tax (OSD) Versus M/s. Jagadamba Tea Co. Pvt. Ltd.

2015 (12) TMI 103 - ITAT KOLKATA

Addition made for bogus liability - CIT(A) deleted the addition - Held that:- AO has just made addition on estimate basis without giving any basis or finding as can be observed from the observation of the AO. Even otherwise, the CIT(A) after going through the remand report of the AO dated 09.11.2009 noted that the assessee company filed partywise details of liabilities for expenses, liabilities for others, liabilities for garden and liabilities on account of trade deposits and advances. The AO d .....

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Addition made by AO on account of expansion of maintenance of new extension as capital in nature - CIT(A) deleted the addition - Held that:- We find that the assessee has incurred expenses for maintenance of existing bushes which involved planting, growing and nurturing of such tea bushes which are entirely necessary for basic operation and manufacturing and production of tea. The assessee produced copy of ledger account before CIT(A) from where he observed that these expenses were incur .....

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e from other sources by CIT(A) - Held that:- We find that the CIT(A) has merely directed the AO to compute the business income after applying the provisions of Rule 8 of the I. T. Rules. However, we are of the view that the CIT(A) has no power under the Act to set aside the issue but in our view, we direct the same accordingly. This issue of revenue's appeal is allowed for statistical purposes. - Decided in favour of revenue for statistical purpose. - ITA No. 1047/Kol/2012 - Dated:- 14-9-2015 - .....

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. At the outset, it is noticed that this appeal of revenue is barred by limitation by 25 days and revenue has filed Condonation petition supported by affidavit stating some reasons. Then this fact was confronted to Ld. Sr. counsel for the assessee Shri Subhas Agarwal, he fairly conceded that he has no objection if delay is condoned and appeal is admitted. Hence, we admit the appeal and adjudicate the same. 3. The first issue in this appeal of revenue is against the order of CIT(A) deleting the a .....

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₹ 30 lakhs out of current liabilities of ₹ 1,32,65,506/- on estimate basis by observing in para 4 as under: "4. No details of liability of ₹ 1,32,65,506/- was filed. So, on estimate basis a sum of ₹ 30,00,000/- is treated as bogus liability." Aggrieved, assessee preferred appeal before CIT(A), who after obtaining remand report from AO dated 09.11.2009 deleted the addition by stating that the assessee company has produced complete details about liabilities shown .....

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has just made addition on estimate basis without giving any basis or finding as can be observed from the observation of the AO, which is reproduced in para 4 above. Even otherwise, the CIT(A) after going through the remand report of the AO dated 09.11.2009 noted that the assessee company filed partywise details of liabilities for expenses, liabilities for others, liabilities for garden and liabilities on account of trade deposits and advances. The AO during remand proceeding could not point out .....

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this appeal of revenue is against the order of CIT(A) in deleting the addition made by AO on account of expansion of maintenance of new extension as capital in nature amounting to ₹ 2,27,765/-. For this, revenue has raised following ground no.2: "2. That on the facts and circumstances of the case, Ld. CIT(A) erred in law in directing the AO to delete the addition of ₹ 2,27,765/- on account of expansion and maintenance of new extension though the expenditure is capital in nature .....

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s capital in nature. So, this amount is disallowed." Aggrieved, assessee preferred appeal before CIT(A), who after seeking remand report from AO deleted the addition by observing that the expenses debited under the head expansion and maintenance of new extension in the ledger account. The expenses are in the nature of payments made to casual workers for uprooting, leveling and cutting jungle and weeding out unnecessary weeds. The payments are also made for the purpose of cultivation and fil .....

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and nurturing of such tea bushes which are entirely necessary for basic operation and manufacturing and production of tea. The assessee produced copy of ledger account before CIT(A) from where he observed that these expenses were incurred for payment of casual workers for uprooting, leveling and cutting jungle and weeding out unnecessary things and accordingly, these expenses are in the nature of revenue expenditure and cannot be held to be capital in nature. We concur with the finding of CIT(A .....

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