Super Crop Safe Limited Vs ACIT (ITAT Ahmedabad)
In a recent ruling, the Income Tax Appellate Tribunal (ITAT) Ahmedabad, in the case of Super Crop Safe Limited vs. ACIT (Assessment Year 2018-19), largely upheld the Assessing Officer’s (AO) decision to proportionally allocate employee benefit expenses to the agricultural activities of Super Crop Safe Limited. The Tribunal, however, deleted the allocation of finance costs and set aside the matters of depreciation and certain ‘other expenses’ for re-verification by the AO. The disallowance of Section 80JJA deduction was also set aside for re-examination.
The appeal was filed by Super Crop Safe Limited (hereinafter referred to as “the assessee”) against the order of the National Faceless Appeal Centre (CIT(A)) dated July 29, 2024, which had dismissed the assessee’s appeal.
Background of the Case
Super Crop Safe Limited, engaged in the manufacturing of bio-fertilizers and pesticides, also cultivates ‘Mycorrhizal Fungal Infected Root’ for in-house use and sale. For the Assessment Year 2018-19, the assessee declared an income of Rs. 1,98,72,520. The case was selected for scrutiny due to a large agricultural income disclosure of Rs. 4,18,84,350, against which only Rs. 50,53,607 was shown as expenses. This resulted in an expense-to-revenue ratio of 12.06% for agricultural operations, significantly lower than the 92.06% for the assessee’s overall operations.
