TMI Blog2016 (5) TMI 1303X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Appeals) on issue are well reasoned and thus, no interference is called for - Decided in favour of assessee Depreciation on windmills - Held that:- In view of the documents on record it is clearly evident that the assessee had purchased windmill from NMCOML during the financial year 2007-08 we do not find any infirmity in the findings of Commissioner of Income Tax (Appeals) in accepting the claim of depreciation of the assessee. - Decided in favour of assessee Disallowance on account of Employees’ contribution to Provident Fund and ESIC and Labour Welfare Fund - assessee had made contributions in the respective funds after the due date as specified under the provisions of relevant Acts - Held that:- Although the contribution to the above funds were made after due date as specified under the relevant Acts, but before the due date of filing of return of income under the Income Tax Act. This fact has not been disputed by the Department. The Hon'ble Supreme Court of India in the case of Commissioner of Income Tax Vs. Alom Extrusions Ltd. (2009 (11) TMI 27 - SUPREME COURT ) has held that the contributions made after due date as prescribed under the Provident Fund Act but befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are not willful or deliberate. Thus, the delay in filing of cross objection is condoned and the same is admitted to be heard and disposed off on merits. 3. The brief facts of the case as emanating from records are: The assessee is engaged in the business of producing animal feed, feed supplement, edible oils, fuel pellets and wind power generation. The assessee in its return of income for the impugned assessment years had claimed deduction u/s. 80JJA on profits and gains from the business of bio degradable waste. Further, the assessee had purchased windmill from M/s. Nav Maharashtra Chakan Oil Mills Limited (hereinafter referred to as NMCOML ). In the financial year 2007-08 the assessee claimed deduction u/s. 80IA(4) amounting to ₹ 34,89,416/- on windmill. The Assessing Officer rejected both the above mentioned claims of the assessee. Apart from the above, the Assessing Officer made disallowance in respect of payments made by assessee towards Employee s contribution to Provident Fund and ESIC after due date specified under the respective Acts and certain other expenses. Aggrieved by the assessment orders in the respective assessment years, the assessee preferred ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ESIC Maharashtra labour welfare fund paid before the due date of filing the return of income was allowable as deduction u/s.36(1)(va) of the Act relying upon a distinguishable decision of the Apex Court and without appreciating that the assessee had not made the payments within the due date as prescribed in the Explanation under sec.36(1)(va) of the Act. 5) The appellant craves leave to add, alter or amend any or all the grounds of appeal. Identical grounds have been raised by the Revenue in both the assessment years under appeal. 5. Shri Hitendra Ninawe representing the Department submitted that the Commissioner of Income Tax (Appeals) has erred in allowing deduction of ₹ 89,24,682/- (for assessment year 2008-09) and ₹ 1,99,06,881/- (for assessment year 2009-10) u/s. 80JJA of the Act. The Commissioner of Income Tax (Appeals) has failed to appreciate that baggasse/husk is not a waste but a by-product generated by agriproduce processing industries and is a basic raw material for many industrial products apart from being used as fuel by the industries to run boilers. The ld. DR submitted that the groundnut husk, kharadi husk is a residual product generated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the issue relating to deduction u/s. 80JJA in respect of profits and gains from the business of collecting and processing bio degradable waste is squarely covered by the judgment of Hon'ble Bombay High Court in the case of Commissioner of Income Tax Vs. Smt. Padma S. Bora reported as 29 taxmann.com 230 (Bombay). The Commissioner of Income Tax (Appeals) had granted relief to the assessee by placing reliance on the decision of Tribunal in the case of DCIT Vs. Smt. Padma S. Bora reported as 133 TTJ 108 (Pune-Trib.). The order of the Tribunal was upheld by the Hon'ble Jurisdictional High Court vide judgment dated 03-12-2012 subsequent to the order of Commissioner of Income Tax (Appeals). 8. In respect of depreciation on windmill, the ld. AR submitted that the assessee had made payments towards the purchase consideration through banking channel. The ld. AR referred to the ledger account at pages 121 and 122 of the paper book to show the dates and mode of payment of purchase consideration of windmill. The ld. AR also placed on record sales tax entitlement certificate to avail sales tax benefit on windmill and a copy of application to Maharashtra Energy Development Agency (ME ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 1 relates to claim of deduction u/s. 80JJA of the Act allowed by the Commissioner of Income Tax (Appeals). The assessee company is engaged in the business of manufacturing pellets for fuel from bio degradable waste. The assessee is collecting bio-degradable waste such as groundnut husk, baggase from nearby areas and after processing the same the assessee is making small sizes fuel pellets to be used as fuel. The Assessing Officer rejected the claim of the assessee on the ground that the baggase and groundnut husk are not bio degradable waste but a by-product. The Assessing Officer held that the assessee does not satisfy the conditions for claiming deduction u/s. 80JJA of the Act and rejected the claim of the assessee. The Commissioner of Income Tax (Appeals) after appreciating the facts of the case and in view of the decision of Tribunal in the case of DCIT Vs. Smt. Padma S. Bora (supra) accepted the claim of the assessee. 12. Before us the ld. AR has placed on record the judgment of Hon'ble Bombay High Court in the case of Commissioner of Income Tax Vs. Smt. Padma S. Bora (supra) wherein the Hon'ble Jurisdictional High Court has upheld the findings of Tribunal. The q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent assessee has collected bagasse from sugar factories after having made payment for the same. Therefore, the aforesaid requirement of collecting as provided under Section 80JJA of the Act is satisfied. It is a undisputed finding of fact that the collected bagasse has been used by the respondent assessee to make briquettes for fuel as that indeed is the business of the respondent-assessee. The reliance upon the circular No.772 dated 23/12/1998 by the appellant is misplaced. The aforesaid Circular does not restrict its benefits only to local bodies. In any event the circular cannot override the clear words of Section 80JJA of the Act which provides deduction in respect of profits and gains derived from the business of collecting and processing/treating of bio- degradable waste i.e. bagasse into briquettes for fuel. In these circumstances, we find no fault with the order of the Tribunal both on facts as well as in law. 13. Thus, in view of the facts of the case and the judgment of Hon'ble High Court in the case of Commissioner of Income Tax Vs. Smt. Padma S. Bora (supra) we are of the considered view that the assessee is eligible to claim deduction u/s. 80JJA. The fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case, the appellant has been using the windmills, sales bill has been issued in its favour, it has consumed electricity for its own manufacturing process. The facts brought on record clearly indicate that the appellant has acquired the possession over the windmills and has been producing electricity for its own consumption and the asset is utilized. The A.O. has not questioned this aspect during the assessment proceedings. It is in this context that the Apex Court's decision of Mysore Minerals Ltd. Vs. CIT cited supra becomes important and which has' held that the term 'owned' as occurring in section 32(1) must be assigned a wider meaning. Anyone in possession of property in his own title exercising such dominion over the property as would enable others being excluded therefrom and having right to use and occupy the property and/or to enjoy its usufruct in his own right would be the owner of the building though a formal deed of title may not have been executed and registered as contemplated by Transfer of Property Act, Registration Act etc. The very concept of depreciation suggest that the tax benefit on account of depreciation legitimately belongs to one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Alom Extrusions Ltd. (supra) has held that the contributions made after due date as prescribed under the Provident Fund Act but before the due date of filing of return of income, the assessee is eligible to claim deduction thereof. The Hon'ble Jurisdictional High Court in the case of Commissioner of Income Tax Vs. Ghatge Patil Transport Ltd. (supra) while dealing with the similar issue has held that the contribution towards the employees share of provident fund etc. is allowable if deposited before the due date of filing of return of income. The relevant extract of the findings of Hon'ble High Court is reproduced here-in-blow: 13. In that judgment, this Court held that no substantial questions of law would arise since section 43B is inserted in the I.T. Act with effect from 1st April, 1984 by which the mercantile system of accounting with regard to tax, duty and contribution to welfare funds stood discontinued. Under section 43B of the I.T. Act, it became mandatory for the assessee to account for such payment including to welfare funds not on mercantile basis but on cash basis. The judgment further mentions that this situation continued between 1 st April, 1984 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Alom Extrusions Ltd. (supra). The Tribunal in the case at hand relied upon the said judgment. There is no reason to fault the order passed by the Tribunal. We are of the view that the decision of the Supreme Court in Alom Extrusions Ltd. applies to employees' contribution as well as employers' contribution. Question Nos.2, 3 4 are accordingly answered in favour of the assessee and against the revenue. 16. Thus, in view of the undisputed fact and the decision of Hon'ble Jurisdictional High Court the ground no. 4 raised in the concise grounds of appeal by the Department is dismissed being devoid of any merit. 17. In the result, both the appeals of the Revenue are dismissed. CO No. 29/PN/2015 (A.Y. 2008-09) 18. The assessee in its cross objection has assailed the findings of Commissioner of Income Tax (Appeals) by raising the solitary issue in confirming disallowance of deduction u/s. 80IA(4) amounting to ₹ 34,89,416/-. The similar ground has been raised by the assessee in its appeal for the assessment year 2009-10 as ground no. 2. Wherein, the assessee has challenged the findings of Commissioner of Income Tax (Appeals) in confirming the disallo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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