Pr. Commissioner Of Income Tax, Panchkula v. M/S Haryana Agro Industries Corporation Ltd

ITA No. 212 of 2019 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITA No. 212 of 2019 (O&M)Date of Decision: 24.9.2019 Pr. Commissioner of Income Tax, Panchkula .......Appellant Vs. M/s Haryana Agro Industries Corporation Ltd. .......Respondent CORAM: HON’BLE MR. JUSTICE AJAY TEWARIHON'BLE MR. JUSTICE HARNARESH SINGH GILL Present: - Mr. Yogesh Putney, Senior Standing Counsel and Mr. Ajiteshwar Singh, Junior Standing Counselfor the appellant. ***** AJAY TEWARI, J. (ORAL) This appeal has been filed under Section 260-A of the Income Tax Act, 1961 ('Act' for short) against the order of Income Tax Appellate Tribunal accepting the appeal of the assessee. The assessee Haryana Agro Industries Corporation Limited carrying on the manufacturing and sale of feed, pesticides, storage of agricultural produce and trading of the agricultural implements and other agricultural related activities. As part of its business it procures wooden crates and poly covers for open plinth storage of food grains. As per its accounting policy, it had been writing off 25% of the cost of these wooden crates and poly covers on the ground that these wooden crates and poly covers had a life of about 3 to 4 years. In the assessment year 2012-2013, ITA No. 212 of 2019 (O&M)-2- the case of the assessee was taken up for scrutiny and among other queries put to it, the A.O. sought justification for treating the expense on poly covers and wooden crates in the manner that it was being done by the assessee. Not being satisfied with the explanation (mentioned above), the A.O. considered the acquisition of poly covers and wooden crates as a capital asset and decided to give to the assessee the benefit of 10% of depreciation. The assessee filed an appeal before the Commissioner who dismissed the same.Its subsequent appeal having been allowed, as mentioned above, the Revenue is before this Court. Learned counsel for the appellant has sought to justify the finding of the Commissioner and the A.O. on the ground that the wooden crates are akin to furniture since they are used to place the stock of food grains. However, as regards poly covers, there is no such finding by anyone. In our considered opinion, the argument qua wooden crates is also misconceived. The open plinth storage, as its name suggests, is a process when there is not adequate warehousing to stock food grains and they are stored on wooden crates and covered with poly covers to save them from the vagaries of the weather. It has not been found as a fact that the wooden cartes or poly covers actually last for 10 years or that the accounting policy consistently followed by the assessee is wrong in any manner. In our experience, the fact is that such poly covers and wooden crates live out their life within 3 to 4 years as claimed by the assessee. Once that is so, the argument that this has to be treated as a capital asset for the purpose of depreciation, cannot be accepted since the acquisition of wooden ITA No. 212 of 2019 (O&M)-3- crates and poly covers would not give any enduring benefit to the assessee. The questions of law do not arise. The appeal is dismissed. (AJAY TEWARI) JUDGE (HARNARESH SINGH GILL) September 24, 2019JUDGE GurpreetWhether speaking /reasoned : YesWhether Reportable : No