Agricultural Market Committee, Mahaboobnagar, Hyderabad V. ADIT (Exemptions)-I, Hyd, Hyderabad

ITA 1048/HYD/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4298 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 18-04-2019
• Assessment Year: 2004-2005
• Appeal Filed On: 21-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R MOHANKUMAR
• Assessee Lawyers: S RAMA RAO
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN , ACCOUNTANT MEMBER ITA NO. 1 048 / HYD/201 6 ASSESSMENT YEAR: 20 0 4 - 0 5 AGRICULTURAL MARKET COMMITTEE, H YDERABAD. PAN A ABTA 2586L VS. ASST. DIRECTOR OF INCOME - TAX (EXEMPTIONS) I, HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: S H RI S. RAMA RAO REVENUE BY: S HRI R. MOHAN KUMAR DATE OF HEARING: 1 8 / 0 4 / 201 9 DATE OF PRONOUNCEMENT: 10 / 0 5 /201 9 O R D E R PER S. RIFAUR RAHMAN , AM: T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 9 , HYDERABAD, DATED, 28 / 03 /201 6 FOR AY 20 0 4 - 05. 2. ON PERUSAL OF RECORD, WE FIND THAT THE THERE WAS A DELAY OF 3 DAYS IN FILING THIS APPEAL BEFORE US. TO THIS EFFECT, THE ASSESSEE FILED AN AFFIDAVIT WHEREIN IT WAS AFFIRMED THAT DUE TO INSUFFICIENT STAFF, PREPARATION OF APPEAL PAPERS AND CONTACTI NG THE ADVOCATE WAS DELAYED, DUE TO WHICH, THERE WAS A DELAY OF THREE DAYS IN FILING THE APPEAL. IT WAS HUMBLY SUBMITTED THAT THE DELAY IS FOR THE REASONS SUBMITTED WHICH ARE BEYOND THE CONTROL OF THE ASSESSEE AND IS NOT INTENTIONAL. IT WAS, THEREFORE, PRA YED THAT THE SAID DELAY MAY BE CONDONED AND ADMIT THE APPEAL FOR HEARING. I.T.A. NO. 1048 /HYD/1 6 AGRICULTURAL MARKET COMMITTEE, MAHABOOBNAGAR 2 3. AS THE ASSESSEE W AS PREVENTED BY SUFFICIENT REASON FOR NOT FILING THE APPEAL WITHIN THE DUE DATE, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING AND ADJUDICATION. 4. BRIEF FACTS OF THE CASE ARE, ASSESSEE IS A LOCAL AUTHORITY, WHOSE INCOME WAS EXEMPT U/S 10(2 2 ) OF T HE INCOME - TAX ACT, 1961 (IN SHORT THE ACT) UPTO THE AY 2002 - 03. SUBSEQUENTLY, THE LOCAL AUTHORITIES ARE SUBJECTED TO TAX IN VIEW OF THE AMENDMENT MADE TO SECTION 10(22) W.E.F. 01/04/2003. ACCORDINGLY, NOTICE U/S 142(1) WAS ISSUED. ORIGINALLY, THE ASSESS MENT WAS COMPLETED U/S 143(3) OF THE ACT ON 18/10/2006 DETERMINING THE TOTAL TAXABLE INCOME OF RS. 2,17,296/ - . 5. THE LD. AR SUBMITTED THAT THE AO WHILE CONSIDERING THE GROSS RECEIPTS OF THE ASSESSEE, HAS TAKEN MARKET FEE OF RS. 20,11,154/ - , LATE FEES OF RS. 3,42,620/ - AND TOTAL GROSS RECEIPTS CONSIDERED BY THE AO IS RS. 23,69,094/ - TO ARRIVE AT THE TAXABLE INCOME OF RS. 2,17,286/ - . HE BROUGHT TO OUR NOTICE, THE INCOME AND EXPENDITURE ACCOUNT OF THE ASSESSEE, AS PER WHICH, THE GROSS INCOME WAS AS UNDER: 1. MARKET FEES RS. 20,11,154 2. LICENCE FEES RS. 15,320 3. LATE FEE RS. 75 4. RECOVERIES RS. 42,555 5. RENTS RS. 2,22,472 ------------------- RS. 25,91,576 ============ 5.1 HE SUBMITTED THAT AO, INSTEAD OF TAKING THE LA TE FEE OF RS. 75, HAS TAKEN RS. 3,42,620/ - , WHICH INCLUDES RECOVERIES OF RS. 3,42,555/ - . THE RECOVERIES ARE NOTHING, BUT, EXPENDITURE INCURRED BY THE ASSESSEE ON BEHALF OF EMPLOYEES. THE CORRESPONDING EXPENDITURES ARE SHOWN IN THE EXPENDITURE, WHICH ARE AS UNDER: I.T.A. NO. 1048 /HYD/1 6 AGRICULTURAL MARKET COMMITTEE, MAHABOOBNAGAR 3 1. MC ADVANCE RS. 40,000 2. FESTIVAL ADVANCE RS. 11,700 3. EDN. ADVANCE RS. 14,000 4. MARRIAGE ADVANCE RS. 25,000 5. HBA RS.2,50,000 6. PRINTING OF BOOKS RS. 18,850 5.2 HE SUBMITTED THAT THIS MISTAKE WAS APPARENT IN THE ASSESSME NT ORDER. HE PRAYED THAT THIS MISTAKE MAY BE RECTIFIED BY THE HONBLE BENCH AND HE DID NOT PRESS ANY OTHER GROUND EXCEPT RELEVANT GROUND NO. 4 FOR THE ABOVE ISSUE. 6. LD. DR, ON THE OTHER HAND, RELIED ON THE ORDERS OF REVENUE AUTHORITIES. 7. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS POINTED OUT BY THE LD. AR, THERE IS A MISTAKE APPARENT ON RECORD IN THE ASSESSMENT ORDER THAT AO CONSIDERED GROSS INCOME, WHICH INCLUDES RECOVERIES. THE INCOME AND EXPENDITURE ACCOUNT CLEARLY INDICATES THAT ASSESSEE HAS INCURRED CERTAIN EXPENDITURE FOR THE WELFARE OF THE EMPLOYEES AND MADE RECOVERIES FROM THEM TO THE EXTENT OF RS. 3,42,555/ - , WHICH MAY BE DELETED FROM THE GROSS INCOME CALCULATED BY THE AO TO ARRIVE AT THE TAXABLE INCOME. AT THE SAME TIME, WE NOTICE THAT AO WHILE CALCULATING GROSS INCOME, HAD CONSIDERED LICENCE FEE AS NIL AND RENTAL INCOME AT RS. 15,320/ - , WHEREAS, AS PER THE INCOME AND EXPENDITURE ACCO UNT, LICENCE FEE IS RS. 15,320/ - AND RENTAL INCOME IS RS. 2,22,472/ - . NO DOUBT, THIS MISTAKE WAS NOT REFERRED BY THE LD. AR OF THE ASSESSEE OR LD. DR. FOR ARRIVING AT THE PROPER TAXABLE INCOME, WE DIRECT THE AO TO INCLUDE RENTAL INCOME OF RS. 2,22,472/ - A ND EXCLUDE RECOVERIES, AS DIRECTED BEFORE , TO ARRIV E AT THE CORRECT TAXABLE INCOME OF THE ASSESSEE. ACCORDINGLY, GROUND RAISED BY THE ASSESSEE ON THIS ISSUE IS ALLOWED. I.T.A. NO. 1048 /HYD/1 6 AGRICULTURAL MARKET COMMITTEE, MAHABOOBNAGAR 4 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT O N 10 TH MAY , 201 9. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER SD/ - ( S. RIFAUR RAHMAN ) ACCOUNTANT MEMBER HYDERABAD, DATED 10 TH MAY , 201 9. KV COPY FORWARDED TO: 1. AGRICULTURAL MARKET COMMITTEE, C/O SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3 - 6 - 643, STREET NO. 9, HIMAYATNAGAR, HYDERABAD 500 029. 2 . A D IT (EXEMPTIONS) - I , AYAKAR BHAVAN, HYD . 3 . CIT (A) - 9 , HYDERABAD 4. CIT (EXEMPTIONS) , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE