TMI Blog2017 (5) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... for purchase of the computers. Thus we do not find any reason to interfere in the order of ld. CIT(A) - Decided against revenue Addition of depreciation on the plant & machinery purchased from the amount withdrawn from the account maintained with NABARD - Held that:- We note that the Hon’ble Apex Court in the case of Garden Silk Weaving Factory vs. CIT (1991 (3) TMI 1 - SUPREME Court ) has held that the depreciation is not a expenditure but an allowance. Thus, in our considered view, we are inclined to hold that the depreciation is an allowance and therefore the same is out of the purview of section 33AB(6) of the Act. Thus we do not find any reason to interfere in the order of ld. CIT(A).- Decided against revenue - ITA No. 844/Kol /2014 - - - Dated:- 3-5-2017 - Shri N. V. Vasudevan, Judicial Member And Shri Waseem Ahmed, Accountant Member By Appellant : Shri Anand KR. Singh, JCIT-DR By Respondent : Mrs. Nilma Joshi, FCA ORDER Per Waseem Ahmed, Accountant Member This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-IV, Kolkata dated 15.01.2014. Assessment was framed by DCIT, Circle-4 Kolkata u/s 143(3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010 for AY 2006-07. Humbly following the decision of the jurisdictional Tribunal, I delete the addition of ₹ 25,63,853/- on account of Cess on Green Leaf made by the AO. the AO is directed accordingly. Ground (A) of the appeal is allowed. The Revenue, being aggrieved, is in appeal before us on the following ground:- 1. The Ld. CIT(A) erred in law as well as on facts in holding that Cess on green leaf is an allowable expenditure, ignoring the fact that it is directly attributable to core agriculture activities which is taxable under state agriculture income tax, beyond the purview of Central Income tax and on the same issue SLP is pending in the case of AFT Industries. 5. Ld. DR vehemently supported the order of AO whereas Ld. AR relied on the order of ld. CIT(A). 6. We have heard rival contentions of both the parties and perused the materials available on record. The issue in the instant case relates to disallowance of cess expenditure claimed by the assessee. The Hon ble jurisdictional High Court has decided the issue in favour of the assessee in the case of Commissioner of Income Tax vs. A.F.T Industries Ltd. (2004) , 270 ITR 167 (Cal) but against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue and we dismiss the same. 7. Second issue raised by Revenue in this appeal is that Ld. CIT(A) erred in allowing the deduction of ₹ 1,21,206/- out of the withdrawal from the account maintained with NABARD which is against the provision of Sec. 33AB(4) of the Act. 8. The assessee has withdrawn a sum of ₹ 1,21,206/- for the purchase of office equipment from the account maintained with NABARD in the year under consideration. The Assessing Officer observed that the amount can be withdrawn from the NABARD account under the specified circumstances as mentioned u/s 33AB(4) of the Act. The instant withdrawal from the NABARD account is not in accordance with the provision of Sec. 33AAB(4) of the Act and therefore the same was disallowed by AO and added to the total income of assessee. 9. Aggrieved, assessee preferred an appeal before Ld. CIT(A). The assessee before Ld. CIT(A) submitted that the amount was withdrawn in accordance with the Tea Development Account Scheme, 1990 vide para-9 clause-(k) which reads as under:- 9. Withdrawal and utilization of the amounts deposited A depositor shall be entitled to withdraw the amount deposited or such part thereof a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in holding that purchase of computer and its ancillaries for ₹ 1,21,206/- out of withdrawal from credit available with NABARD accounts scheme was allowable, ignoring the fact that s per provisos of section 33AB(4) purchase of computer is not allowable from the withdrawal from credit available with NABARD scheme as plant Machinery. 10. Before us Ld. DR heavily relied on the order of AO whereas Ld. AR reiterated same submissions as made before Ld. CIT(A) and he also relied on the order of Ld. CIT(A). 11. We have heard rival contentions of both the parties and perused the materials available on record. The issue in the instant case relates to purchase of office equipments out of money withdrawn from the account maintained with NABARD. As per the AO the amount can be withdrawn from the NABARD account in the circumstances as specified u/s 33AB(4) of the Act which are enumerate below:- [Tea development account [,coffee development account and rubber development account]. 33AB. (1). .. (2). (3). [(4). Notwithstanding anything contained in sub-section (33), where any amount standing to the credit of the assessee in the special a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account or the [***] Deposit Account shall not be allowed to be withdrawn except for the purposes specified in the scheme or, as the case may be, in the deposit scheme] or in the circumstances specified below:- (a) Closure of business; (b) Death of an assessee; (c) Partition of a Hindu undivided family; (d) Dissolution of a firm; (e) Liquidation of a company From the provisions of section 33AB(3) of the Act, we find that the assessee is entitled to utilize the amount withdrawn from the account maintained in NABARD for the purposes as specified in the scheme. And in the instant case the assessee has utilized the fund as per the scheme. It is also important to note that the provisions of section 33AB(4) of the Act also provides the assessee to utilize the money for purchase of the computers. Thus we do not find any reason to interfere in the order of ld. CIT(A) Therefore, there is no merit in this ground of appeal raised by the Revenue, hence, we dismiss the same. 12. Next issue raised by Revenue in this appeal is that Ld. CIT(A) erred in deleting the addition made by the AO for ₹ 9,48,088/- on account of depreciation on the plant machin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ground (C) is allowed. The Revenue, being aggrieved, is in appeal before us on the following ground:- 3. The Ld. CIT(A) erred in law in holding that depreciation on plant machinery purchased out of NABARD scheme was allowable, ignoring the fact that depreciation on Plant Machinery acquired from withdrawal from NABARD scheme was not allowable as per provisions of section 33AB(4). 15. Before us both parties relied on the order of Authorities Below as favourable to them. 16. We have heard rival contentions and perused the materials available on record. The issue in the instant case relates to the amount of depreciation claimed by assessee in respect of plant and machinery purchased out of the money withdrawn from the account maintained with NABARD. We note that the Hon ble Apex Court in the case of Garden Silk Weaving Factory vs. CIT reported in 189 ITR 512 (SC) has held that the depreciation is not a expenditure but an allowance. Thus, in our considered view, we are inclined to hold that the depreciation is an allowance and therefore the same is out of the purview of section 33AB(6) of the Act. Thus we do not find any reason to interfere in the order of ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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