Market Committee, Pehowa V. ACIT, Kurukshetra

ITA 1268/CHANDI/2010

• Counselvise Citation: 126821514 RSA 2010
• Duration Of Justice: 1 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 29-12-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 08-11-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: R K AGGARWAL; B S SAINI
• Keywords: Capital asset; Depreciation; Charitable institution; Benefit of exemption; Revenue expenditure; Capital expenditure
• Section: 32; 145; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI H.L.KARWA, HONBLE VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO.1268 /CHD/2010 (ASSESSMENT YEAR : 2005-06) MARKET COMMITTEE, VS. THE A.C.I.T., PEHOWA. CIRCLE, KURUKSHETRA. PAN: AAALM0385L ITA NO.1251/ CHD/2010 (ASSESSMENT YEARS : 2007-08) THE A.C.I.T., VS. MARKET COMMITTEE, CIRCLE, KURUKSHETRA. PEHOWA. AND ITA NO.1272 /CHD/2010 (ASSESSMENT YEAR : 2005-06) MARKET COMMITTEE, VS. THE A.C.I.T., BABAIN CIRCLE, KURUKSHETRA. (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI R.K.AGGARWAL & B.S.SAINI DEPARTMENT BY : SHRI N.K.SAINI, DR DATE OF HEARING : 29.12.2011 DATE OF PRONOUNCEMENT : 4.1.2012 O R D E R PER H.L.KARWA, V.P. : MOST OF THE ISSUES IN THE PRESENT BUNCH OF APPEALS ARE COMMON. THEREFORE, WE FIND IT CONVENIENT TO DISPOSE OFF THE PRESENT BUNCH OF APPEALS BY THIS CONSOLIDATED ORDER. 2. FIRSTLY, WE WILL TAKE UP THE APPEAL OF THE ASSES SEE IN ITA NO.1268/CHD/2010, WHICH IS DIRECTED AGAINST THE ORD ER OF THE CIT (APPEALS), KARNAL DATED 30.8.2010 RELATING TO ASSES SMENT YEAR 2005-06. IN THIS APPEAL THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL : 2 1. THE LEARNED CIT (APPEALS) ERRED IN LAW WHILE BY GIVING DIRECTION TO A.O. FOR VERIFICATION WHICH IS ALREADY ALLOWED BY A.O. AND HIGH COURT OF PUNJAB & HARYANA (CHD.) 2. THE LEARNED CIT (APPEALS) ERRED IN LAW BY DISALLOWING EXPENDITURE GIVEN TO BOARD AS PER PROVISION OF THE BOARD FOR BUDGET WHICH IS ALSO ALLOWED IN THE CASES OF THE MARKET COMMITTEES OR TRUST BY THE ITAT, CHANDIGARH. 3. AT THE TIME OF HEARING, S/SHRI R.K.AGGARWAL & B. S.SAINI COUNSEL FOR THE ASSESSEE DID NOT PRESS FOR GROUND NO.1 OF T HE APPEAL AND ACCORDINGLY, WE DISMISS THE SAME AS NOT PRESSED. 4. AS REGARDS GROUND NO.2, THE FACTS AS STATED BY T HE ASSESSEE ARE THAT THE ASSESSEE PAID A SUM OF RS.2.40 CRORES AS ADVANC E TO HSAMB FOR CARRYING OUT CERTAIN WORKS. THE ASSESSEE SOUGHT TO CLAIM THE AFORESAID PAYMENT TO HSAMB TOWARDS CAPITAL WORKS AS APPLICATI ON OF INCOME ON ITS OBJECTS SO AS TO MEET THE STATUTORY REQUIREMENT OF APPLICATION OF 85% OF IT IS INCOME TO ENJOY THE BENEFIT OF EXEMPTION U NDER SECTION 11. IT SEEMS THAT THE ASSESSEE HAS NOT BEEN ABLE TO MAKE O UT A PROPER CASE BEFORE THE DEPARTMENTAL AUTHORITIES. THE DEPARTMENT AL AUTHORITIES PROCEEDED ON THE BASIS THAT THE ASSESSEE WAS SEEKIN G DEDUCTION OF THE SAID AMOUNT AS EXPENDITURE. THEY HELD THAT THE ASS ESSEE WAS NOT ENTITLED TO DEDUCTION FOR THE REASONS GIVEN IN THE APPELLATE ORDER PASSED BY THE CIT (APPEALS). IT WAS MADE OUT BEFORE US THAT THE ASSESSEE WAS NOT SEEKING DEDUCTION FOR A SUM OF RS.2.40 CRORES PAID AS ADVANCE TO HSAMB TOWARDS CAPITAL WORKS. ACCORDING TO THE ASSE SSEE, IT WAS CLAIMING THAT THE AFORESAID AMOUNT SHOULD BE TREATE D AS APPLICATION OF INCOME FOR MEETING STATUTORY REQUIREMENT OF APPLICA TION OF 85% OF ITS INCOME SO AS TO BE ELIGIBLE FOR EXEMPTION OF ITS EN TIRE INCOME. THIS ASPECT OF THE MATTER HAS NEITHER BEEN EXAMINED BY T HE ASSESSING OFFICER NOR BY THE CIT (APPEALS) AS THE ASSESSEE WAS NOT AB LE TO PROPERLY PRESENT ITS CASE BEFORE THEM. IN THIS VIEW OF THE MATTER, WE CONSIDER IT 3 APPROPRIATE TO SET ASIDE THE ORDERS OF THE ASSESSIN G OFFICER AND THE CIT (APPEALS) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE AS TO WHETHER THE ASSESSEE HAS GIVEN ADVANCE OF RS.2.40 CRORES TO HSAMB TOWARDS CAPITAL WORKS AND, IF SO, WHETHER IT CAN BE CONSIDERED AS APPLICATION OF INCOME FOR MEET ING THE STATUTORY REQUIREMENT OF APPLICATION OF 85% OF ITS INCOME. T HE ASSESSING OFFICER SHALL DISPOSE OFF THE MATTER AFRESH IN ACCORDANCE W ITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUND NO.2 OF APPEAL TAKEN BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 5. NOW WE WILL TAKE UP APPEAL OF THE REVENUE IN ITA NO.1251/10, WHICH IS DIRECTED AGAINST THE ORDER OF THE CIT (APP EALS), KARNAL DATED 2.6.2008 RELATING TO ASSESSMENT YEAR 2005-06. IN T HIS APPEAL THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL : I). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN ALLOWING DEPRECIATION ON CAPITAL ASSETS, WHEN CAPIT AL EXPENDITURE RELATING TO ACQUISITION OF SUCH ASSETS HAD ALREADY BEEN ALLOWED AS APPLICATION OF INCOME FOR THE PURPOSE OF ALLOWING EXEMPTION UNDER SECTION 11 OF I NCOME TAX ACT, 1961 AND AS SUCH FURTHER ALLOWING OF DEPRECIATION ON THESE CAPITAL ASSETS WILL AMOUNT TO DOUBLE DEDUCTION FOR THE SAME EXPENDITURE. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS FURTHER ERRED IN ALLOWING DEPREC IATION ON THE CAPITAL ASSETS IN THE LIGHT OF THE HON'BLE A PEX COURT DECISION IN THE CASE OF ESCORTS INDIA LTD. (1 99 ITR 43), WHEREIN IT HAS BEEN HELD THAT IN THE ABSENCE O F CLEAR STATUTORY INDICATION TO THE CONTRARY, THE STATUTE S HOULD NOT BE READ AS TO PERMIT AN ASSESSEE TWO DEDUCTIONS ON THE SAME EXPENDITURE. III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF INTEREST I NCOME ACCRUED ON ADVANCE MADE TO HARYANA STATE ELECTRICIT Y BOARD, RELYING ON THE COMMUNICATION DATED 20.01.200 3 OF THE HARYANA GOVERNMENT THAT PRINCIPAL AMOUNT OF FDR S OF MARKET COMMITTEES WITH HSEB BE RETURNED TO THE CONCERNED MARKET COMMITTEES, BUT IGNORING THE REMAI NING PART OF THE COMMUNICATION WHICH SAYS THAT THE MATTE R 4 REGARDING INTEREST ON THESE DEPOSITS WILL BE CONSID ERED AFTER REPAYMENT OF PRINCIPAL, WHICH MEANS THAT RIGH T OF INTEREST ON THE ADVANCE/DEPOSIT MADE BY THE ASSESSE E WITH HSEB DID NOT STAND WAIVED AND AS SUCH THE SAME HAD ACCRUED TO THE ASSESSEE DURING THE YEAR. IV) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF INTEREST A CCRUED ON ADVANCE MADE BY THE ASSESSEE TO OTHER MARKET COMMITTEES BY ACCEPTING THE CONTENTION OF THE ASSES SEE THAT IT WAS MAINTAINING CASH SYSTEM OF ACCOUNTING A ND NO INTEREST INCOME WAS RECEIVED DURING THE YEAR, IGNOR ING THE FACT THAT, AS IS CLEAR FROM THE AUDIT REPORT AND FI NAL ACCOUNT, THE ASSESSEE HAD FOLLOWED MIXED SYSTEM OF ACCOUNTING AND NOT CASH SYSTEM. 6. AS REGARDS GROUND NO. (I) & (II) OF THE APPEAL, THE ASSESSING OFFICER DISALLOWED THE DEPRECIATION OF RS.25,36,932 /- FOR THE REASON THAT THE ASSESSEE HAD ALREADY CLAIMED DEPRECIATION AS AP PLICATION OF MONEY AND, THEREFORE, ALLOWING DEPRECIATION ONCE AGAIN UN DER SECTION 32 WOULD AMOUNT TO DOUBLE DEDUCTION. 7. ON APPEAL, THE CIT (APPEALS) HELD AS UNDER : 8. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE ASSESSEE. THE INCOME OF THE ASSESSEE WAS EXEMPT FROM INCOME TAX UPTO A.Y. 2002-03 AS PER SECTION 10(20) IN THE STATUS OF LOCA L AUTHORITY, WHEREAS, FROM A.Y. 2003-04, I.E. W.E.F. 1.4.2002 THE ASSESSEE HAS BEEN EXCLUDED FROM THE DEFINITION OF LOCAL AUTHORITY AND THEREFORE, FROM ASSESSMENT YEAR 2003-04, ASSESSEE HAS CLAIMED THE STATUS OF CHARITABLE TRUST TAXABLE AS AOP, WHERE TH E EXEMPTION IS ALLOWED AND INCOME IS TAXED AS PER SECTION 11 TO 13 OF THE IT ACT. THE ASSESSEE ACQUIRED VARIOUS DEPRECIABLE ASSETS WHICH PERTAIN T O A.Y. 2002-03 AND EARLIER YEARS OR A.Y. 2003-04 AND SUBSEQUENT YEARS. THE INCOME OF THE ASSESSEE WAS COMPLETELY EXEMPT BECAUSE ASSESSEE WAS NOT TAXABLE AT ALL AS PER SECTION 10(20) UPTO A.Y. 2002-03 AND THEREFORE, ANY CAPITAL EXPENDITURE OR REVENUE EXPENDITURE, EVERYTHING WAS ALLOWED TO THE ASSESSEE AND NO TAX WAS LEVIED AND THEREFORE, THE CAPITAL EXPENDITURE WAS AUTOMATICALLY TREATED AS ALLOWED, HENCE NO FURTHER DEPRECIATION ON ANY SUCH ASSET CAN BE ALLOWED BECAUSE NEITHER THE INCOME NOR THE LOSS WAS ASSESSABLE UPTO A.Y. 2002-03. FOR THE ASSETS ACQUIRED IN A.Y. 2003-04 AND SUBSEQUENT YEARS, IF THE EXPENDITURE WAS FOR THE OBJECTS OF THE ASSESSEE , THEN IT WAS ALLOWED AS APPLICATION OF INCOME AND 5 THERE WAS NO QUESTION OF MAKING ANY DISTINCTION BETWEEN CAPITAL EXPENDITURE AND REVENUE EXPENDITURE AND THEREFORE, CAPITAL EXPENDITURE WAS 100% ALLOWED AS DEDUCTION OUT OF THE INCOME OF THE ASSESSEE. THEREFORE, ANY FURTHER DEPRECIATION CLAI M WILL AMOUNT TO CLAIM FOR DOUBLE DEDUCTION WHICH IS NOT ALLOWABLE. IF THE EXPENDITURE WAS NOT FOR THE OBJECTS OF THE ASSESSEE, THEN IT WAS NOT ALLOWABLE IRRESPECTIVE OF THE FACT WHETHER IT IS CAPITAL EXPENDITURE OR REVENUE EXPENDITURE AND THEREFORE, NO DEPRECIATION CAN ALSO BE ALLOWED ON SUCH ASSET WHICH IS NOT ACQUIRED FOR THE OBJECTIVE. THEREFORE , NO DEPRECIATION IS ALLOWABLE ON ANY ASSET AS CLAIME D BY THE ASSESSEE, HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS REJECTED. 8. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE AFORESAID FINDINGS OF THE CIT (APPEALS). 9. WE FIND THAT SIMILAR ISSUE CAME UP FOR CONSIDERA TION BEFORE THE ITAT A BENCH, CHANDIGARH IN THE CASE OF ACIT, KUR UKSHETRA VS. MARKET COMMITTEE, ISHMAILABAD IN ITA NO.1248/CHD/20 10 RELATING TO ASSESSMENT YEAR 2005-06. THE TRIBUNAL VIDE ITS ORD ER DATED 25.11.2011 FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICTIONA L HIGH COURT IN THE CASE OF CIT VS. MARKET COMMITTEE, PIPLI BEARING ITA NO.535 OF 2009 HELD AS UNDER : 9 WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CONSIDERED THEIR SUBMISSIONS. IN CIT V. MARKET COMMITTEE, PIPLI (SUPRA) THE HON'BLE JURISDICTIONAL HIGH COURT HAS REJECTED SIMILAR PLEA AS RAISED BY THE DEPARTMENT BEFORE US, WITH THE FOLLOWING OBSERVATIONS:- IN THE PRESENT CASE, THE ASSESSEE IS NOT CLAIMING DOUBLE DEDUCTION ON ACCOUNT OF DEPRECIATION AS HAS BEEN SUGGESTED BY LD. COUNSEL FOR THE REVENUE. THE INCOME OF THE ASSESSEE BEING EXEMPT, THE ASSESSEE IS ONLY CLAIMING THAT DEPRECIATION SHOULD BE REDUCED FROM THE INCOME FOR DETERMINING THE PERCENTAGE OF FUNDS WHICH HAVE TO BE APPLIED FOR THE PURPOSE OF THE TRUST. THERE IS NO DOUBLE DEDUCTION CLAIMED BY THE ASSESSEE AS CANVASSED BY THE REVENUE. JUDGMENT OF THE HON'BLE SUPREME COURT IN ESCORTS LTD. AND ANOTHER (SUPRA) IS DISTINGUISHABLE FOR THE ABOVE REASONS. IT CANNOT BE HELD THAT DOUBLE 6 BENEFIT IS GIVEN IN ALLOWING CLAIM FOR DEPRECIATION FOR COMPUTING INCOME FOR PURPOSE OF SECTION 11. THE QUESTIONS PROPOSED HAVE, THUS, TO BE ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 10. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HON' BLE JURISDICTIONAL HIGH COURT IN CIT V. MARKET COMMITTEE, PIPLI (SUPRA), BOTH THE GROUNDS OF APPEA L TAKEN BY THE DEPARTMENT ARE DISMISSED. RESULTANTLY , APPEAL FILED BY THE DEPARTMENT IS DISMISSED. 10. THE ABOVE ORDER OF THE TRIBUNAL IS SQUARELY APP LICABLE TO THE FACTS OF THE PRESENT CASE AND THEREFORE, RESPECTFULLY FOL LOWING THE SAME WE DISMISS BOTH THE GROUNDS OF APPEAL. 11. NOW WE WILL TAKE UP GROUND NOS.(III) AND (IV)OF THE APPEAL. THE ASSESSING OFFICER HAS DISCUSSED THE ISSUE IN PARA 5 .4 OF THE ASSESSMENT ORDER DATED 4.3.2010. 12. PARA 5.4 OF THE ASSESSMENT ORDER READS AS UNDER : 5.4 DEPOSIT WITH ELECTRIC BOARD AND OTHER MARKET COMMITTEE PERUSAL OF RECORD REVEALS THAT THE ASSESSEE HAS SHOWN DEPOSITS WITH THE HSEB AN AMOUNT OF RS.4,88,00,000/- AND RS.1,76,00,000/- TO MARKET COMMITTEE PUNDRI AND MARKET COMMITTEE SIRSA. SINCE NO INTEREST INCOME ON THE INVESTMENT MADE WAS DECLARED BY THE ASSESSEE, SO ASSESSEE WAS ASKED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT WHY THE INTEREST ON THE RECEIPT BASIS ON THE DEPOSI TS WITH THE HSEB AND THE OTHER MARKET COMMITTEES MAY NOT BE ADDED BACK TO THE INCOME OF THE ASSESSEE, BU T THE ASSESSEE REPLIED VIDE LETTER DATED 4.03.2010 TH AT THE ADVANCES MADE TO THE OTHER MARKET COMMITTEE AND HSEB WAS AS PER INSTRUCTION OF THE BOARD THAT FIRST RECOVER PRINCIPAL THEN INTEREST WHICH WAS ON THE BASIS OF CASH METHOD OF ACCOUNTING WHICH IS ALS O ALLOWED BY THE HON'BLE ITAT CHANDIGARH AND THE NEW DELHI IN THE CASES OF THE SAME MARKET COMMITTEE CASES FOR THE ASSTT. YEAR 2006-07. THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTED AS THE ASSESSEE IS FOLLOWING MIXED SYSTEM OF ACCOUNTING AND NOT PURELY CASH SYSTEM OF ACCOUNTING AND THE DECISION OF ITAT HAS NOT BEEN ACCEPTED BECAUSE APPEAL ON THIS ISSUE HAS BEEN FILED BEFORE THE HON'BLE PAPER BOOK & HR. HIGH COURT HENCE INTEREST @ OF 10% ON RS.4,88,00,000/- + 1,76,00,000/- = 6,64,00,000 7 WORKS OUT TO RS.66,40,000/- IS CHARGED AND ADDED TO THE INCOME OF THE ASSESSEE. 13. ON APPEAL, THE CIT (APPEALS) DELETED THE IMPUGN ED ADDITION. 14. AFTER HEARING THE RIVAL SUBMISSIONS WE FIND THA T THE ISSUE IS SQUARELY COVERED BY THE DECISION OF ITAT A BENCH, CHANDIGARH DATED 25.11.2011 IN THE CASE OF ACIT, KURUKSHETRA VS. MAR KET COMMITTEE, THANESAR, KURUKSHETRA IN ITA NO.1252/CHD/2010 RELAT ING TO ASSESSMENT YEAR 2005-06. WHILE DECIDING A SIMILAR ISSUE THE T RIBUNAL RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE FOLLOWING OBSERVATIONS: 31. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CONSIDERED THEIR SUBMISSIONS. SECTION 145 OF THE IN COME- TAX ACT MANDATES THAT THE INCOME CHARGEABLE AS PRO FITS AND GAINS OF THE BUSINESS AND PROFESSION OR AS IN COME FROM OTHER SOURCES SHALL BE COMPUTED IN ACCORDANCE WITH EITHER CASH OR MERCANTILE SYSTEM OF ACCOUNTING REGU LARLY EMPLOYED BY THE ASSESSEE. IT IS THUS NOT OPEN TO T HE ASSESSEE TO ADOPT ANY METHOD OF ACCOUNTING OTHER TH AN CASH OR MERCANTILE SYSTEM OF ACCOUNTING. COPIES OF AUDIT REPORT HAVE NOT BEEN MADE AVAILABLE TO US. WE ARE THEREFORE UNABLE TO RECORD ANY SPECIFIC FINDING AS TO WHETHER THE ASSESSEE HAS MAINTAINED ITS ACCOUNTS ON THE BASIS OF CASH OR MERCANTILE SYSTEM OF ACCOUNTING. AS REGARDS THE ACCRUAL OF INTEREST TO THE ASSESSEE, TH E CASE OF THE DEPARTMENT IS THAT THE GOVT. OF HARYANA HAS NOT WAIVED INTEREST AND THEREFORE IT CANNOT BE SAID THA T THE ASSESSEE IS NOT ENTITLED TO INTEREST. IN THIS CONN ECTION, THE AGREEMENT UNDER WHICH THE LOAN WAS GIVEN AND THE CORRESPONDENCE ENTERED INTO BY THE ASSESSEE NEED TO BE EXAMINED. THIS HAS ALSO NOT BEEN DONE EITHER BY TH E AO OR BY THE LD. CIT(A). IN THIS VIEW OF THE MATTER, WE CONSIDER IT APPROPRIATE TO SET ASIDE THE ORDER PASS ED BY THE AO AND THE LD. CIT(A) IN THIS BEHALF AND RESTO RE THE MATTER TO THE FILE OF AO FOR FRESH DECISION IN CONF ORMITY WITH THE LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. GROUND NOS. 3 AND 4 TAKEN BY THE DEPARTMENT ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 15. THE FACTS OF THE PRESENT CASE ARE SIMILAR AND T HEREFORE, FOLLOWING THE ABOVE ORDER OF THE TRIBUNAL WE RESTORE THE MATT ER TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION IN CONFORMITY WITH THE LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASS ESSEE. GROUND 8 NOS.(III) AND (IV) TAKEN BY THE DEPARTMENT ARE ALLO WED FOR STATISTICAL PURPOSES. 16. IN ITA NO.1272/CHD/2010 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT (APPEALS) ERRED IN LAW WHILE BY GIVING DIRECTION TO A.O. FOR VERIFICATION WHICH IS ALREADY ALLOWED BY A.O. AND HIGH COURT OF PUNJAB & HARYANA(CHD.). 2. THE LEARNED CIT (APPEALS) ERRED IN LAW BY DISALLOWING EXPENDITURE GIVEN TO BOARD AS PER PROVISION OF THE BOARD FOR BUDGET WHICH IS ALSO ALLOWED IN THE CASES OF THE MARKET COMMITTEES OR TRUST BY THE ITAT, CHANDIGARH. 17. AT THE TIME OF HEARING, S/SHRI R.K.AGGARWAL & B .S.SAINI COUNSEL FOR THE ASSESSEE DID NOT PRESS FOR GROUND NO.1 OF T HE APPEAL AND ACCORDINGLY, WE DISMISS THE SAME AS NOT PRESSED. 18. VIDE GROUND NO.2 OF THE APPEAL THE ASSESSEE HAS CHALLENGED THE ACTION OF THE CIT (APPEALS) IN DISALLOWING THE EXPE NDITURE OF RS.55,42,577/-. IT IS CLAIMED BY THE ASSESSEE THAT IT HAD PAID A SUM OF RS.55,42,577/- AS ADVANCE TO HSAMB FOR CARRYING OUT CERTAIN WORKS. THE ASSESSEE SOUGHT TO CLAIM THE AFORESAID PAYMENT TO HSAMB TOWARDS CAPITAL WORKS AS APPLICATION OF INCOME ON ITS OBJEC TS SO AS TO MEET THE STATUTORY REQUIREMENT OF APPLICATION OF 85% OF ITS INCOME TO ENJOY THE BENEFIT OF EXEMPTION UNDER SECTION 11. 18.1 IT IS RELEVANT TO STATE THAT WE HAVE DECIDED A SIMILAR GROUND IN ITA NO.1268/CHD/2010 IN THE CASE OF MARKET COMMITTE E, PEHOWA VS. ACIT. IN THE DETAILED REASONS GIVEN THEREIN WE HA VE RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH CERTAIN D IRECTIONS AND GUIDELINES. IN THAT VIEW OF THE MATTER, WE SET ASI DE THE ORDERS OF THE ASSESSING OFFICER AND THE CIT (APPEALS) AND RESTORE THE MATTER TO THE 9 FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE AS TO WHETHER THE ASSESSEE HAS GIVEN ADVANCE OF RS.55,42,577/- TO HSAMB TOWARDS CAPITAL WORKS AND, IF SO, WHETHER THE SAME CAN BE C ONSIDERED AS APPLICATION OF INCOME FOR MEETING THE STATUTORY REQ UIREMENT OF APPLICATION OF 85% OF ITS INCOME. THE ASSESSING OF FICER SHALL DISPOSE OFF THE MATTER AFRESH IN CONFORMITY WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THIS GROUN D OF APPEAL TAKEN BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 19. IN THE RESULT, ALL THE APPEALS ARE ALLOWED PART LY FOR STATISTICAL PURPOSES AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH DAY OF JANUARY, 2012. SD/- SD/- (MEHAR SINGH) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED 4 TH JANUARY, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH