The Commissioner Of Incometaxi v. Forest Development Corporation Of Maharashtra Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH : NAGPUR INCOME TAX APPEAL NO. 2 OF 2010 -(The Commissioner of IncomeTaxI vs. Forest Development Corporation of Maharashtra Ltd.) Office Notes, Office Memoranda ofCoram, appearances, Court's orders or directions and Registrar's orders. Court's or Judge's orders CORAM : B.P. DHARMADHIKARI &S.B. SHUKRE, JJ.APRIL 06, 2015. Heard Shri Parchure, learned counsel for theappellant and Shri Thakar, learned counsel for therespondent. The Income Tax Appellate Tribunal (ITAT)by impugned order dated 30.06.2009 foundinterference by Commissioner of Income-Tax (CIT)under Section 263 of the Income Tax Act, 1961,unwarranted. Shri Parchure, learned counsel submits thatCIT has intervened under Section 263 of the Act onlybecause of its finding that while completing assessmentfor the Assessment Year 2004-05, the Assessing Officer(AO) omitted to look into correctness or otherwise ofthe apportionment of common expenses to agriculturaland non agricultural segments. Shri Parchure, learnedcounsel submits that CIT has found that AO has actedmechanically in the matter. According to the learnedcounsel, percentage of apportionment between twoexpenditures was different in every year, therebynecessitating application of mind to relevant facts and as assessment order does not disclose this approach, itis vitiated. He further submits that CIT has placed backthe matter for fresh consideration and, therefore, noprejudice is caused to the assessee. Shri Thakar, learned counsel, has invited ourattention to previous history. According to him, sinceAssessment Year 1996-97, this practice is in vogue andthe percentage of agricultural and non agriculturalreceipt is worked out and in that proportion expensesare also bifurcated under these two heads. He submitsthat as the system is well settled, in return filed, theapportionment was accordingly shown and it has beenaccepted by the Assessing Officer. As such, there wasno scope for intervention under Section 263 of the Act.He has also relied upon the Division Bench judgment ofRajasthan High Court in the case of Commissioner ofIncome Tax vs. Rajasthan Financial Corporation,reported at (1998) ITR 246 (RAJ). With the assistance of respective counsel, wehave perused the papers. The facts show thatproportion of agricultural and non agricultural income/receipts has been used even while working out theapportionment of expenditure under that head. Theprevious history not in dispute shows that since 1996-97, the said method is being adopted. It is not indispute that in return filed by the assessee (StateGovernment Corporation), the receipts wereaccordingly mentioned and expenditure for thosereceipts was accordingly apportioned and appropriated.This return has been accepted. As such, it cannot be said that the assessment order does not show anyapplication of mind. The perusal of above mentioned judgmentshows the limited scope available to CIT whileexercising jurisdiction under Section 263 of the IncomeTax Act, 1961. Here, a long settled practice has beenlost sight of and without observing anything in concreteabout irrelevance of the method or apportionmentbeing followed, matter has been sent back. Had CITnoted some facts which necessitated departure fromthis method, its intervention could have beenunderstood. However, that is not the position here. In this situation, we do not see any error inthe Appellate order of ITAT. No case is made out andno substantial question of law arises. Appeal isrejected. No order as to costs. JUDGEJUDGE *GS.