ORDER SHEET ITA 408 OF 2000 IN HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax) ORIGINAL SIDE C.I.T. CENTRAL - II, CALCUTTA Versus KOTHARI PLANTATION & INDUSTRIES LTD. BEFORE: Hon'ble JUSTICE GIRISH CHANDRA GUPTA Hon'ble JUSTICE ARINDAM SINHA Date : 14th May, 2015. For appellant : Mr.M.P.Agarwal,Advocate For Respondent/assessee : Mr.S.Das,Advocate Court : subject matter of challenge in appeal is judgement and order dated 22nd May, 2000 passed by learned Income Tax Appellate Tribunal pertaining to assessment year 1990-91 preferred by revenue. appeal was admitted on 3rd June, 2014 on following grounds: For that Tribunal erred in law holding that replantation subsidy received by assessee from Tea Board is to be taken into 2 consideration for computing profits of eligible business for purpose of determining deduction under Section 32AB of Income Tax Act, 1961 notwithstanding specific provisions contained in clauses (a) and (b) sub-section (3) of Section 32AB of said Act for computing profits of eligible business. Mr.Agarwal, learned advocate for revenue submitted that view taken both by CIT(Appeal) and learned Tribunal is patently contrary to common sense and law. He contended that benefit contemplated under section 32AB is applicable only to such income which is chargeable to tax as would appar from opening sentence of section itself which provides as follows : 32AB.(1) Subject to other provisions of this section, where assessee, whose total income includes income chargeable to tax under head Profits and gains of business or profession , has, out of such income He submitted that applicability of section 32AB cannot even remotely be suggested to income which is not chargeable to tax. question in case is, whether replantation subsidy received by assessee is eligible for benefit under section 32AB. He drew our attention to section 10(30) which provides as follows : in case of assessee who carries on business of growing and manufacturing tea in India, amount of any subsidy received from or through Tea Board under any such scheme for replantation or 3 replacement of tea bushes(or for rejuvenation or consolidation of areas used for cultivation of tea) as Central Government may, by notification in Official Gazette, specify : Provided that assessee furnishes to (Assessing) Officer, along with his return of income for assessment year concerned or within such further time as (Assessing) Officer may allow, certificate from Tea Board as to amount of such subsidy paid to assessee during previous year. Section 10 enumerates income not includable in total income. Clause 30 of Section 10 relates to replantation subsidy. He contended that point was decided way back in year 1993 by Supreme Court in case of Escorts Ltd.& Anr. v. Union of India & Ors. reported in (1993) 199 ITR 43 (SC) wherein Their Lordships held as follows : There is fundamental, though unwritten, axiom that no Legislature could have at all intended double deduction in regard to same business outgoing; and, if it is intended, it will be clearly expressed. In other words, in absence of clear statutory indication to contrary, statute should not be read so as to permit assessee two deductions both under section 10(2)(vi) and section 10(2)(xiv) of 1922 Act or both under section 32(1)(ii) and section 35(1)(iv) of 1961 Act. use of words in respect of same previous year in cluase (d) of proviso to section 10(2)(xiv) of 1922 Act and section 35(2)(iv) of 1961 Act is to indicate that there is 4 basic scheme, unspoken but clearly underlying Acts, that two allowances cannot be and are not intended to be granted in respect of same asset or expenditure. These provisions mandate that assessee should, in case where assessee qualifies for both allowances, be granted special allowance for scientific research and not routine annual one for depreciation. Mr.Das, learned advocate for assessee submitted that point is covered in favour of assessee by earlier judgement of this Court in case of Britannia Industries Ltd. v. Joint Commissioner of Income Tax reported in (2005) 143 Taxman 325 (Cal) wherein following view was taken : While applying particular provision of statute in particular fact, statute has to be given its due; we cannot ignore any expression used in statute. It has to be reconciled and given its due meaning. word eligible qualifying business in clause (ii) of section 32AB(1) since defined in section 32AB(2)(i) seems to be determining factor which cannot be ignored. Income from eligible business does not qualify as to under what head income from eligible business would be eligible for deduction. In absence of any qualification clause and use of expression eligible business defined in section 32AB(1) makes clear distinction and expresses intention of Legislature which deviated from expression used in sections 32AB(1)(a) and (b). distinction sought to be made by Mr.Agarwal to support views taken by Gauhati High Court and Calcutta High 5 Court in CIT v. Dinjoye Tea Estate (P)Ltd.(1997)224 ITR 263 and CIT v. Warren Tea Ltd.(2001) 251 ITR 382 do not seem to be sound proposition. decision of Calcutta High Court in CIT v. Warren Tea Ltd.(2001) 251 ITR 382 followed decision of Gauhati High Court in CIT v. Dinjoye Tea Estate (P)Ltd.(1997) 224 ITR 263 is no more good law in view of decision in Apollo Tyres Ltd. v. CIT (2002) 255 ITR 273 (SC), following which Calcutta High Court had expressed its opinion in Assam Brook Ltd. v. CIT (2004) 267 ITR 121. Apex Court was clear in laying down principle in Apollo Tyres Ltd. v. CIT (2002) 255 ITR 273 which cannot have different meaning. second submission advanced by Mr.Das was that tax effect at relevant point of time operative under Section 268A was Rs.3 lakhs whereas amount of subsidy received by assessee in this case is below Rs.3 lakhs. Mr.Agarwal, learned advocate for Revenue replied that judgment in case of Britannia Industries Ltd. cited by Mr.Das is distinguishable on facts. In so far as second submission is concerned, he submitted that there were other questions involved in appeal involving expenditure of sum of Rs.31 lakhs approximately and expenditure of sum of Rs.5.65 lakhs approximately. appeal, however, on those questions was not admitted and Hon ble Court admitted appeal only on ground indicated above. Therefore, theory of tax effect has no manner of application. 6 We have considered rival submissions and are of opinion that submissions advanced by Mr.Agarwal have to be accepted for following reasons. judgment in case of Britannia Industries Ltd. has no manner of application because question in that case related to income arising out of following heads; In present case, Tribunal had found that assessee was not entitled to deduction under section 32AB in respect of income from house property, dividend income, bank interest and long-term capital gains as these incomes did not form part and parcel of business carried on by assesse. It cannot be disputed that all heads of income which fell for consideration in that case were chargeable to tax. Whereas we are concerned with income which is not chargeable to tax, therefore, that judgment has no manner of application. In any case, assessee cannot be heard to say that he should be allowed double deduction as held by Apex Court in case of Escorts Ltd.(supra). submission as regards tax effect is also without any substance because appeal preferred by Revenue indeed related to other questions as indicated above but appeal was admitted with regard to this question. Therefore, it cannot be said that even under section 268A and assuming everything in favour of assessee, appeal was incompetent going by circular issued by CBDT, which was in force at time when appeal was preferred. 7 Both submissions advanced by Mr.Das have thus failed. question for reasons discussed above is answered in favour of revenue. appeal is thus allowed. (GIRISH CHANDRA GUPTA, J.) (ARINDAM SINHA, J.) ssaha/sb AR(CR) C.I.T. Central - II, Calcutta v. Kothari Plantation & Industries Ltd