Th] August, 2011 In Cit v. M/S. Monsanto India Ltd. (Income Taxappeal

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1618 OF 2016 Pr. Commissioner of Income Tax-10 .. Appellant v/s. M/s. Monsanto India Ltd. .. Respondent Mr. Arvind Pinto for the appellant Mr. Nishant Thakkar a/w Ms. Jasmine Amalsadvala, Mr. Hiten ChandeI/b PDS Legal for the respondent CORAM : AKIL KURESHI & M.S. SANKLECHA, J.J. P.C. DATED : 23[rd] JANUARY, 2019 1.This Appeal under Section 260-A of the Income Tax Act, 1961(the Act) challenges the order dated 14[th] December, 2014 passed by the Income Tax Appellate Tribunal (the Tribunal). This appeal relates toAssessment Year 2006-07. 2.The Revenue urges the following substantial questions of law forour consideration :- “(i) Whether on the facts and in the circumstances of the caseand in law, the Tribunal was correct in treating its commercialincome of the sale of hybrid seeds, as agricultural income exempt under Section 10(1) of the Act? (ii)Whether on the facts and in the circumstances of the caseand in law, the Tribunal erred in concluding that the allocationof corporate expenses as an estimated rate of 10% made by thecompany had a scientific basis; where no evidence was producedbefore either the AO or the appellate authorities as against theAO's allocation being based on the turnover of the units? 3.Regarding question no.(i) :- (a)We note that the impugned order of the Tribunal dismissed theRevenue's appeal before it on the above issue following an order of thisco-ordinate bench for Assessment Year 2000-01 in respect of the samerespondent assessee. It also notes the binding order of this Court dated 5[th] August, 2011 in CIT Vs. M/s. Monsanto India Ltd. (Income TaxAppeal No.633 of 2010 and other connected appeals) raising the sameissue, which were dismissed by this Court. (b)Therefore, as the impugned order has followed the decision ofthis Court, no fault can be found with the same. This in the absence of the Revenue pointing out any difference in facts and / or in law. (c)In the above view, the question as proposed does not give rise to any substantial question of law. Thus, not entertained. 4.Regarding question no.(ii) :- (a)The impugned order of the Tribunal allowed the assessee's appeal with regard to allocation of expenses amongst its two 80IB units. Theimpugned order records the fact that corporate expenses could not beidentified as being incurred in any particular 80IB unit. In the abovecircumstances, the impugned order of the Tribunal noted the fact thatin Note 4 b of the Notes to Accounts, had declared that 10% of thecorporate expenses were allocated between the two units in the ratio ofproduction hours utilized by the two plants. The impugned order alsorecords the fact that for the earlier assessment year i.e. A.Y. 2004-05,the Assessing Officer himself under Section 143(3) of the Act allocatedthe common corporate expenses at 10% between the two 80IB units.In the above view, the impugned order of the Tribunal concluded thatas the respondent has provided a scientific basis for allocation ofexpenses and therefore disregarded the allocation of expenses on thebasis of turnover. (b)Mr. Pinto, learned Counsel for the Revenue invites our attentionto the order of the CIT(A), wherein it has been recorded that therespondent has not furnished the basis of allocation at 10% of“corporate expenses” between the two units. This resulted in hisacceptance of the allocation on the basis of turnover by the AssessingOfficer. (c)However, we find that the impugned order of the Tribunal records the fact that the basis of allocation of corporate expenses hadbeen declared by the respondent in Note 4B of its Notes to Accounts.Thus, it is not a case of the respondent not formulating the basis of itsallocation. The Tribunal found that the basis of allocation adopted bythe respondent is more scientific than the allocation being done on thebasis of turnover. Thus, a possible view. (c)However, we find that the impugned order of the Tribunal records the fact that the basis of allocation of corporate expenses hadbeen declared by the respondent in Note 4B of its Notes to Accounts.Thus, it is not a case of the respondent not formulating the basis of itsallocation. The Tribunal found that the basis of allocation adopted bythe respondent is more scientific than the allocation being done on thebasis of turnover. Thus, a possible view. (d)In the above view, the question as proposed does not give rise toany substantial question of law. Thus, not entertained. 5.Accordingly, the appeal is dismissed. (M.S. SANKLECHA, J.) (AKIL KURESHI, J.)