Commissioner Of Income Tax v. M/S Haryana Warehousing Corporation

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.590 of 2010 Date of decision: 9.2.2011 Commissioner of Income Tax. Vs. M/s Haryana Warehousing Corporation. -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTALHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Yogesh Putney, Sr. Standing Counselfor the appellant. for the appellant. Mr. Rajesh Garg, Advocatefor the respondent.for the respondent. --- ADARSH KUMAR GOEL, J. This appeal has been preferred by the revenue underSection 260-A of the Income Tax Act, 1961 (for short, “the Act”)against the order of the Income Tax Appellate Tribunal,Chandigarh in I.T.A. No.53/Chandi/2009 for the assessment year2002-03 proposing to raise following substantial questions of law:- “(a)Whether on the facts and circumstances of the case,the ld. ITAT has erred in not taking into considerationthe fact that the assessee has in fact reduced itstaxable income under the head “surplus fromprocurement of wheat account” by notionally debitingan amount of Rs.10,90,82,220/- as “storage charges”and crediting the same to the exempt “Warehousingthe ld. ITAT has erred in not taking into considerationthe fact that the assessee has in fact reduced itstaxable income under the head “surplus fromprocurement of wheat account” by notionally debitingan amount of Rs.10,90,82,220/- as “storage charges”and crediting the same to the exempt “Warehousing (b) (c) (d) charges” whereas it has not been controverted byassessee at any stage that no such rent/storagecharges has actually been received by it from FCI andthat except for the nomenclature, it also relates to the“surplus from procurement of wheat account.” Whether on the facts and circumstances of the case,the ld. ITAT has erred in dismissing the appeal of theRevenue and thereby allowing the contention of theassessee that income of Rs.10,90,82,220/- claimedexempt under section 10(29), is income received fromthe FCI for the storage of food grains and not atrading receipt as held by the Assessing Officerwhereas the Hon’ble Punjab & Haryana High Court inassessee’s own case in ITR No.120 of 1998 dated06.09.2006 and ITR No.63 of 1998 dated 31.10.2006has already decided that such an income is a tradingreceipt and hence not exempt u/s 10(29) of theIncome Tax Act”. Whether on the facts and circumstances of the case,the ld. ITAT was justified in not adjudicating the basicquestion of fact that the income of the assesseeclaimed to be relating to storage charges by theassessee is in the nature of trading receipt or storageincome within the meaning of section 10(29) and notfollowing the ratio laid down by the Hon’ble Punjab &Haryana High Court in assessee’s own case in ITRNo.120 of 1998 dated 06.09.2006 and ITR No.63 of1998 dated 31.10.2006 and also the ratio of theHon’ble Supreme Court in the case of Orissa StateWarehousing Corporation vs. CIT. 237 ITR 589”Whether on the facts and circumstances of the case,the ld. ITAT was right in not appreciating the fact thatRevenue has never deviated from its stand of denying exemption u/s 10(29) of the Income Tax Act, 1961 toany income not being in the nature of “storagecharges” since assessment year 1992-93 except forthe fact that the nature of income of Rs.10,90,82,000/-was for the first time discovered after detailed enquirythat the same was not in the nature of “storagecharges” and which was accordingly deniedexemption u/s 10(29) of Income tax Act, 1961 alongwith other income relating to procurement of wheataccount.”. Learned counsel for the assessee fairly states that thematter is covered in favour of the revenue by earlier order of thisCourt dated 8.9.2010 in I.T.A. No.157 of 2005TheCommissioner of Income Tax, Panchkula v. M/s HaryanaState Coop. Supply and Marketing Federation Limited,Panchkula. exemption u/s 10(29) of the Income Tax Act, 1961 toany income not being in the nature of “storagecharges” since assessment year 1992-93 except forthe fact that the nature of income of Rs.10,90,82,000/-was for the first time discovered after detailed enquirythat the same was not in the nature of “storagecharges” and which was accordingly deniedexemption u/s 10(29) of Income tax Act, 1961 alongwith other income relating to procurement of wheataccount.”. Learned counsel for the assessee fairly states that thematter is covered in favour of the revenue by earlier order of thisCourt dated 8.9.2010 in I.T.A. No.157 of 2005TheCommissioner of Income Tax, Panchkula v. M/s HaryanaState Coop. Supply and Marketing Federation Limited,Panchkula. Accordingly, the questions raised in the appeal aredecided in favour of the revenue and against the assessee andthe appeal is allowed. (ADARSH KUMAR GOEL) JUDGE February 09, 2011ashwani ( AJAY KUMAR MITTAL ) JUDGE