TMI Blog2016 (5) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... as the assessee has otherwise complied with all the requirements to claim deduction u/s. 35AD of the Act. Therefore, we conclude by holding that the order of CIT(A) deserves to be affirmed, which we hereby do. - Decided in favour of assessee - ITA No. 5057/MUM/2014 - - - Dated:- 29-4-2016 - Shri G. S. Pannu, Accountant Member And Shri Amarjit Singh, Judicial Member For the Petitioner : Shri Madhur Agarwal For the Respondent : Shri Omprakash Meena ORDER Per G. S. Pannu, AM The captioned appeal by the Revenue is directed against the order of CIT(A)-17, Mumbai dated 07.05.2014, pertaining to the Assessment Year 2010-11, which in turn has arisen from the order passed by the Assessing Officer dated 15.02.2013 under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AD of the Act of ₹ 2,89,54,750/- on account of incurrence of capital expenditure on construction of SILO (warehouse). The Assessing Officer show caused the assessee to justify its claim u/s. 35AD of the Act for the reason that assessee was not in the business of setting up and operating cold chain or warehousing facility for agricultural produce which was a requirement of Sec. 35AD of the Act. Before the Assessing Officer, the assessee made detailed submissions which have been reproduced in the assessment order, whereby factually it was asserted that during the year under consideration assessee had set up a warehousing facility for storage of agricultural produce and that this facility was utilized for captive purposes instead of rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Assessing Officer that the deduction is not allowable to the assessee because it is not in the business of setting up and operating warehousing facility. In a detailed discussion in paras 2.3.2 to 2.3.3 CIT(A) has considered the aforesaid objections and disagreed with the Assessing Officer, and ultimately upheld assessee s claim for deduction u/s. 35AD of the Act. 5. Before us, the Revenue is in appeal on the basis of the aforestated Grounds of appeal wherein the challenge to the order of the CIT(A) is on a limited platform. The grievance of the Revenue, as manifested in the Grounds of appeal, is that deduction u/s. 35AD of the Act is not allowable in the instant case because capital expenditure has been incurred for setting up of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity for storage of agricultural produce and for this purpose a SILO (warehouse) was constructed by incurring capital expenditure of ₹ 2,89,54,750/- for storing castor seeds. 8. We have carefully considered the rival submissions. The crux of the controversy in the present appeal revolves around the provisions of Sec. 35AD of the Act which prescribed for deduction in respect of any expenditure of capital nature incurred on specified business. Sub-section (1) of Sec. 35AD of the Act postulates that an assessee shall be allowed deduction in respect of any expenditure of capital nature incurred, wholly and exclusively, for the purposes of any specified business carried on during the year in which such expenditure is incurred. Sans other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties for whom it undertook job work of crushing castor seeds. In the background of such factual analysis, assessee explained before the lower authorities that it has thus saved on storage costs which it had to incur in the past. The aforesaid factual matrix is not in dispute. Insofar as the stand of the Revenue is concerned, as manifested in the Grounds of appeal, the same is to the effect that usage of such warehousing facility does not amount to specified business within the meaning of Sec. 35AD of the Act. 9. In our considered opinion, the objection raised by the Revenue is misplaced both on facts and also in law as reflected by the phraseology of Sec. 35AD of the Act. Quite clearly, the rationale of the deduction prescribed in Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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