COMMISSIONER OF INCOME TAX, HISAR V. MARKET COMMITTEE, NARNAUND

ITA/523/2010

AI Insights

The case involves the Commissioner of Income Tax appealing against the decisions of the Income Tax Appellate Tribunal, New Delhi, concerning the Market Committee, Narnaund. The appeals pertained to the assessment year 2006-07 and involved questions about the application of market fees and the allowance of depreciation on capital assets. The main legal issues revolved around whether the payment of 30% of market fees to the Haryana Agriculture Marketing Board constituted an application of income, and whether depreciation was allowable on capital assets that had already been deducted as application of income. The High Court of Punjab and Haryana dismissed the appeals, referencing prior judgments that had addressed similar issues.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 727610 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 18-11-2010
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax, Hisar v. Market Committee, Narwana, Commissioner of Income Tax, Karnal v. Market Committee, Pipli
• Laws Referred To: Income Tax Act, 1961, Agricultural Marketing Board Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: YOGESH PUTNEY
• Keywords: Capital asset; Charitable purpose; Depreciation; Income Tax; Losses carry forward; Market fees; Unabsorbed depreciation
• Section: 11; 13; 80; 70; 260-A

Judgement Text

"IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.523 of 2010 & connected cases being I.T.A. No.524, 525 & 529 of 2010 Date of decision: 18.11.2010 The Commissioner of Income Tax. -----Appellant. Vs. Market Committee, Narnaund. -----Respondents CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Yogesh Putney, Sr. Standing Counsel for the appellant. --- ADARSH KUMAR GOEL, J. 1. This order will dispose of I.T.A. Nos.523 to 525 and 529 of 2010 as common questions of law are involved in all the appeals. 2. I.T.A. No.523 of 2010 has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, New Delhi dated 1.9.2009 in I.T.A. No.2814/Del/09 for the assessment year 2006-07 proposing to raise following substantial questions of law:- “i) Whether on the facts and in the circumstances of the case, the learned ITAT was justified in allowing payment of 30% of Market fees earned by it paid to I.T.A. No.523 of 2010 the Haryana Agriculture Marketing Board as application of income for charitable purpose, despite the finding that 30% of the market fee has to be paid to the said Board as a statutory obligation under the Agricultural Marketing Board Act, and therefore, it is not application of income, but it is sharing of income by an overriding title as per the Act by which the Market Committee is governed? ii) Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that depreciation was allowable on the capital asset, when deduction for capital expenditure incurred for acquisition of these capital assets has already been allowed as application of income of the trust? iii) Whether the ITAT’s decision to allow double deduction on depreciation when capital expenditure on the asset has already been allowed is justified in the light of apex Court’s decision in Escorts Ltd. Vs. UOI 199 ITR 43 to the effect that in the absence of clear statutory indication to the contrary, the statute should not be read as to permit an assessee two deductions on the same expenditure? iv) Whether on the facts and in the circumstances of the case, the Ld. ITAT was justified in restoring the issue to the file of the Assessing Officer to allow the set-off of B/F unabsorbed depreciation and losses of earlier years, despite the fact that depreciation per se is not allowable on capital assets when deduction for capital expenditure has already been allowed as application of income in earlier years and when the provisions of sections 70 to 80 of the Income Tax Act have not specifically provided for carry forward and set off 2 I.T.A. No.523 of 2010 losses or unabsorbed depreciation in the case of income assessed u/s 11 to 13 of the Act?” 3. Learned counsel for the revenue fairly states that as far as question No.(i) is concerned, the same is covered against the revenue by judgment of this Court dated 5.7.2010 in I.T.A. No.151 of 2010 Commissioner of Income Tax, Hisar v. Market Committee, Narwana and question Nos.(ii) to (iv) are covered against the revenue by judgment of this Court dated 5.7.2010 in I.T.A. No.535 of 2009 Commissioner of Income Tax, Karnal v. Market Committee, Pipli. 4. Accordingly, the appeals are dismissed. 5. A photocopy of this order be placed on the files of each connected case. (ADARSH KUMAR GOEL) JUDGE November 18, 2010 (AJAY KUMAR MITTAL) ashwani JUDGE 3 "