The ACIT, 1(1), V. M/s Krishi Upaj Mandi Samiti,

ITA 128/IND/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1541 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-10-2009
• Assessment Year: misc
• Appeal Filed On: 05-02-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K KARAN
• Assessee Lawyers: S S MUNDRA; GIRDHAR GARG CAS
• Keywords: Depreciation; Validity of assessment; Capital expenditure; Set aside
• Section: 143(3); 37; 263

Judgement Text

PAGE 1 OF 18 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : AAALK0283B I.T.A.NO. 128/IND/2007 A.Y. : 2003-04 ACIT, M/S. KRISHI UPAJ MANDI SAMITI, 1(1), VS PIPARIYA, BHOPAL ITARSI M.P. APPELLANT RESPONDENT PAN NO. : AAALK0334J I.T.A.NO. 76/IND/2008 A.Y. : 2004-05 ACIT, M/S. KRISHI UPAJ MANDI SAMITI, 1(1), VS LAXMIGANJ, MANDI, PIPARIYA, BHOPAL APPELLANT RESPONDENT PAN NO. : AAALK0283B I.T.A.NO. 271 & 272/IND/2009 A.Y. : 2003-04 & 2006-07 ACIT, M/S. KRISHI UPAJ MANDI SAMITI, 1(1), VS PIPARIYA, BHOPAL APPELLANT RESPONDENT PAGE 2 OF 18 PAN NO. : AAALK0283B C.O. NOS. 54 & 55/IND/2009 271 & 272/IND/2009 (ARISING OUT OF I.T.A.NOS. 271 & 272/IND/09) A.YS. : 2003-04 &2006-07 M/S. KRISHI UPAJ MANDI SAMITI, ACIT, PIPARIYA, VS 1(1), BHOPAL CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI V.K.KARAN, DR ASSESSEE BY : SHRI S.S.MUNDRA AND SHRI GIRDHAR GARG, CAS O R D E R PER BENCH AS ALL THESE APPEALS BELONG TO THE SAME ASSESSEE AN D INVOLVE COMMON ISSUES, HENCE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE . 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. FIRST, WE SHALL TAKE UP REVENUES APPEAL IN I.T.A.N O. 128/IND/2007 FOR THE ASSESSMENT YEAR 2003-04. PAGE 3 OF 18 4. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE VERY O UT-SET, SUBMITTED THAT THE IMPUGNED ASSESSMENT ORDER HAD BE EN CANCELLED BY THE LD. CIT BY PASSING AN ORDER U/S 263 DATED 13.3.2008 , WHICH HAD BEEN ACCEPTED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT SUBSEQUENTLY, THE A.O. HAD PASSED ORDER U/S 143(3) READ WITH SECTION 263 ON 02.12.2008, WHICH WAS ALSO SUBJECT MATTER OF APPEAL BEFORE THE TRIBUNAL VIDE I.T.A.NO. 271/IND/2009. ACCORDINGLY, HE CONTENDED T HAT HOW THIS APPEAL WAS INFRUCTUOUS. THE LD. DEPARTMENTAL REPRESENTATI VE ALSO AGREED. 5. IN THIS VIEW OF THE MATTER, WE DISMISS THIS APPEAL AS INFRUCTUOUS. 6. IN THE RESULT, THIS APPEAL OF THE REVENUE IS DISMIS SED. 7. NOW, WE SHALL TAKE UP REVENUES APPEAL IN I.T.A.NO. 76/IND/2008 FOR ASSESSMENT YEAR 2004-05. 8. GROUND NO.1 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 24,66, 077/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXCESS CLAIM OF ROAD DEVELOPMENT. 9. THE FACTS, IN BRIEF, ARE THAT THE IMPUGNED DISALLOW ANCE HAD BEEN MADE BY THE ASSESSING OFFICER FOR THE REASON THAT T HIS REPRESENTED EXCESS CONTRIBUTION OVER THE SPECIFIED LIMITS. THE LD. CIT , HOWEVER, FOUND THAT PAGE 4 OF 18 THE IMPUGNED SUMS COMPRISED OF 85 % OF 50 % OF MAN DI FEE TOWARDS ROAD DEVELOPMENT AND 15% OF 50 % OF MANDI FEE ON AC COUNT OF AGRICULTURE RESEARCH AND INFRASTRUCTURE DEVELOPMENT FUND, WHICH WAS AS PER NOTIFICATION ISSUED BY THE M.P. GOVERNMENT. HE NCE, HE DELETED THE DISALLOWANCE. AGGRIEVED BY THIS, THE REVENUE IS IN APPEAL BEFORE US. 10. LD. DEPARTMENTAL REPRESENTATIVE NARRATED THE FACTS AND PLACED STRONG RELIANCE ON THE ORDER OF THE ASSESSING OFFIC ER. 11. THE LEARNED COUNSEL, AT THE VERY OUT-SET, SUBMITTED THAT ON MERITS, THIS ISSUE WAS ALSO COVERED BY THE DECISIO N OF THE ORDER OF THE TRIBUNAL IN I.T.A.NO. 236 & 253/IND/2006 ORDER DATE D 12.10.2007 AND DREW OUR ATTENTION TO PAGE NOS. 6 TO 9 OF THE TRIBU NALS ORDER. 12. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 13. WE FIND THAT IDENTICAL ISSUE AROSE BEFORE THE TRIBU NAL IN THE CASE OF KRISHI UPAJ MANDI SAMITI , KATNI, IN I.T.A.NO. 2 36/JAB/2006, WHEREIN THE TRIBUNAL ACCEPTED THE CLAIM OF THE ASSESSEE BY HOLDING AS UNDER :- 12. WE HAVE CAREFULLY CONSIDERED THE ISSUE. THE VI EW OF THE A.O. THAT THE PAYMENT MADE TO THE BOARD FOR ROA D DEVELOPMENT AND AGRICULTURE RESEARCH WAS FOR CAPITA L EXPENDITURE AND HENCE NOT ALLOWABLE U/S 37 OF THE A CT, CANNOT BE CONSIDERED CORRECT BECAUSE THE PAYMENT WA S MADE PAGE 5 OF 18 AS A STATUTORY LIABILITY AS PER SECTION 43 OF THE R ELEVANT ACT. SIMILARLY, BOARD FEES WERE ALSO MADE AS PER PROVISI ONS OF THE RELEVANT STATUTE AND WAS ALLOWABLE EXPENDITURE. THE A.O. IS, THEREFORE, NOT CORRECT TO DISALLOW THE SAM E ON THE GROUND THAT THE PAYMENT IN QUESTION WAS IN THE NATU RE OF APPLICATION OF INCOME. IN OUR CONSIDERED OPINION, T HE ORDER OF THE LD. CIT(A) DESERVES NO INTERFERENCE. THE APP EAL OF THE DEPARTMENT IS, THEREFORE, DISMISSED. 14. THE FACTS ARE IDENTICAL AND THERE BEING NO CHANGE I N LAW, HENCE, WE, RESPECTFULLY FOLLOWING THIS DECISION, DISMISS T HIS GROUND OF REVENUE. 15. GROUND NO. 2 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 5,64,2 24/-/- ON ACCOUNT OF EXCESS AMOUNT OF BOARD FEE. 16. THE LEARNED COUNSEL FOR THE ASSESSEE, CONTENDED THA T THIS ISSUE WAS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL IN I.T.A.NO. 277 & 278/IND/2008 ORDER DATED 24.10.2008 AND DREW OUR ATTENTION TO PAGE 16 TO 18. THE LD. DEPARTMENTAL RE PRESENTATIVE ALSO AGREED. PAGE 6 OF 18 17. WE FIND THAT IDENTICAL ISSUE AROSE BEFORE THE TRIBU NAL IN I.T.A.NOS. 277 & 278/IND/08, AND THE TRIBUNAL AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES, HELD AS UNDER :- 15. ON CONSIDERATION OF RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE ISSUE IS SQUARELY COVERED IN FAVO UR OF THE ASSESSEE BY THE ORDER OF ITAT, JABALPUR BENC H IN THE CASE OF KRISHI UPAJ MANDI SAMITI & OTHERS (SUPRA) IN WHICH, IN PARA 12 THE TRIBUNAL HELD WE HAVE CAREFULLY CONSIDERED THE ISSUE. THE VIEW OF TH E AO THAT THE PAYMENT MADE TO THE BOARD FOR ROAD DEVELOPMENT AND AGRICULTURAL RESEARCH WAS FOR CAPITAL EXPENDITURE AND HENCE NOT ALLOWABLE U/S 37 OF THE ACT, CANNOT BE CONSIDERED CORRECT BECAUSE TH E PAYMENT WAS MADE AS STATUTORY LIABILITY AS PER SEC. 43 OF THE RELEVANT ACT. SIMILARLY, BOARD FEES WERE ALSO MADE AS PER PROVISIONS OF THE RELEVANT STATUTE AND WAS ALLOWABLE EXPENDITURE. THE AO IS THEREFORE, NOT CORRECT TO DISALLOW THE SAME ON THE GROUND THAT THE PAYMENT IN QUESTION WAS IN THE NATURE OF APPLICATION OF INCOME. IN OUR CONSIDERED OPINION, THE ORDER OF THE LD. CIT(A) DESERVES NO INTERFERENC E. THE APPEAL OF THE DEPARTMENT IS THEREFORE, DISMISSED. WE FIND THAT THE CASE OF THE ASSESSEE IS ON IDENTIC AL FACTS BECAUSE THE BOARD FEES IS PAID AS PER SEC. 43 OF MP KRISHI UPAJ MANDI ADHINIYAM WHICH IS STATUTORY LIABILITY OF THE ASSESSEE TO PAY IN ORDER TO ACHIEV E ITS OBJECTIVES. IT IS THEREFORE, ALLOWABLE DEDUCTION AS WAS SPENT WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE. AS PER SEC. 36(1)(XII), A NY EXPENDITURE INCURRED BY THE CORPORATION OR BODY CORPORATE BY WHATEVER NAME CALLED CONSTITUTED OR ESTABLISHED BY CENTRAL, STATE OR PROVINCIAL ACT FOR THE OBJECTS AND PURPOSES AUTHORIZED BY THE ACT FOR WHIC H, IT WAS ESTABLISHED SHALL BE ALLOWED AS DEDUCTION. T HE PAGE 7 OF 18 LD. CIT(A) MISUNDERSTOOD THIS ISSUE BY TREATING THE BOARD FEES TO BE THE TRANSFER OF FUNDS. IN THE AFOR ESAID SEC. 36(1)(XII), IT IS SPECIFICALLY MENTIONED THAT THE EXPENDITURE INCURRED COULD HAVE ANY NAME WHATSOEVER THEREFORE, THE LD. CIT(A) SHOULD HAVE CONSIDERED THE ISSUE IN THE BROAD PERSPECTIVE CONSIDERING THE NATURE AND FUNCTIONING OF THE ASSES SEE INSTITUTION UNDER THE SPECIAL ACT. IN VIEW OF THE ABOVE, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND ENTIRE ADDITION IS DELETED. THIS GROUND O F APPEAL OF THE ASSESSEE IS ALLOWED. 18. RESPECTFULLY FOLLOWING THE RATIO OF THIS DECISION, WE HOLD THAT THE ORDER OF THE CIT(A) IS CORRECT IN LAW. HENCE, W E DISMISS THIS GROUND OF THE REVENUES APPEAL. 19. GROUND NO. 3 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 8, 77,432/- ON ACCOUNT OF 8 % PENSION FUND. 20. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAG ED IN FACILITATING OF SALE/MARKETING OF AGRICULTURE PRODU CTS. AS PER THE REGULATION AND POLICY OF CENTRAL/STATE GOVERNMENT, THE ASSESSEE TRANSFERRED 8 % OF LICENCE/MARKET FEE TO RESERVE FU ND CREATED FOR THE PURPOSE OF PAYMENT OF PENSION TO EMPLOYEES OF THE S TATE BOARD SERVICE AND MANDI SAMITI. THE ASSESSEE OUT OF SUCH PROVISIO N REMITTED 1/3 RD TO THE MANDI SAMITI BOARD AND KEPT 2/3 RD OF SUCH FUNDS WITH ITSELF. THE A.O. PAGE 8 OF 18 HELD THAT NO ACTUAL PAYMENT TOWARDS PENSION HAD BEE N MADE, HENCE, THE ASSESSEES SHARE OUT OF SUCH TRANSFER COULD NOT BE CONSIDERED AS AN ASCERTAINED LIABILITY OF REVENUE NATURE. ACCORDINGL Y, HE DISALLOWED A SUM OF RS. 8,77,432/-, BEING THE ASSESSEES SHARE. AGGR IEVED BY THIS, THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A), WHO AFTER PERUSING THE RULES & REGULATIONS OF M.P. KRISHI UPA J MANDI ADHINIYAM & RULES, HELD THAT SUCH SUM WAS ALLOWABLE AS DEDUCT ION. AGGRIEVED BY THIS, REVENUE IS IN APPEAL BEFORE US. 21. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE VERY O UT-SET, SUBMITTED THAT INDORE BENCH OF THE TRIBUNAL IN THE CASE OF KRISHI UPAJ MANDI SAMITI, BURHANPUR VS. ITO IN I.T.A.NOS. 277 & 278/IND/2008 ORDER DATED 24.10.2008 HAD RESTORED THIS ISSUE TO T HE FILE OF A.O. AND DREW OUR ATTENTION TO RELEVANT PART OF PARA 9 AT PA GES 13 & 14 OF THE SAID ORDER. HE ALSO SUBMITTED THAT IN ANOTHER CASE OF KR ISHI UPAJ MANDI SAMITI, THE AMOUNT OF SUCH PROVISION HAD BEEN HELD AS ALLOWABLE BY THE TRIBUNAL. HOWEVER, HE COULD NOT PLACE A COPY OF SUC H ORDER ON RECORD. 22. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER H AND, PLACED RELIANCE ON THE ORDER OF THE A.O. 23. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. PAGE 9 OF 18 24. THOUGH THE ASSESSEE HAS CONTENDED THAT THIS ISSUE W AS COVERED IN FAVOUR OF THE ASSESSEE ON MERITS BY AN ORDER OF THE TRIBUNAL. HOWEVER, THE ASSESSEES COUNSEL HAS NOT PLACED COPY OF THE S AID ORDER ON RECORD AND THE COPY OF THE ORDER OF THE TRIBUNAL, WHICH HAS BE EN PLACED ON RECORD SHOWS THAT THIS ISSUE HAS BEEN RESTORED TO THE FILE OF THE A.O. ,FOR CONSIDERATION OF CERTAIN ASPECTS AND ADJUDICATION O F THE ISSUE AFRESH AS PER LAW. THE RELEVANT FINDINGS OF THE ORDER OF THE TRIB UNAL IN I.T.A.NO. 277 & 278/IND/2008 ARE AS UNDER :- AS REGARDS PART OF GROUND NO.9 WITH REGARD TO AARA KSHIT NIDHI, IT IS STATED TO BE CONTRIBUTION MADE FOR MEE TING THE FUTURE LIABILITY ON ACCOUNT OF PENSION, GRATUITY ET C. THE ASSESSEE IS ADMITTEDLY MAINTAINING CASH SYSTEM OF ACCOUNTING AND AS SUCH, AUTHORITIES BELOW WERE JUST IFIED IN HOLDING THAT THE PROVISION COULD NOT HAVE BEEN ALLO WED UNLESS THE LIABILITY AROSE. THE AUTHORITIES BELOW H AS HOWEVER NOT CONSIDERED THE RULE REFERRED TO BY LD. COUNSEL FOR ASSESSEE IN HIS ARGUMENTS AND HAVE ALSO NOT GIVEN A NY FINDING IF THE ASSESSEE SPENT ANY ACTUAL AMOUNT ON THIS HAND UNDER THE YEAR APPEAL BECAUSE ON PROVISION BASIS TH IS YEAR, THE ASSESSEE MIGHT HAVE MADE CLAIM IN EARLIER YEAR FOR WHICH, THE AMOUNT COULD HAVE BEEN SPENT BY THE ASSE SSEE. LD. COUNSEL FOR ASSESSEE HAS FILED COPY OF THE LETT ER DATED 9.7.8 (PB-34) THROUGH WHICH ASSESSEE WAS DIRECTED T O KEEP AARAKSHIT NIDHI IN SUCH A FIND FOR THE PURPOSE OF M AKING THE PAYMENTS. LD. COUNSEL FOR ASSESSEE ALSO REFERRED TO THE PAGE 10 OF 18 PROCEDURE FOR KEEPING ACCOUNTS ON THIS ISSUE. HOWEV ER, WE FIND THAT THE SAME IS NOT CONSIDERED BY THE AUTHORI TIES BELOW. THIS ISSUE THEREFORE, REQUIRES RECONSIDERATION AT T HE LEVEL OF THE AO. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE AND RESTORE THE ISS UE TO THE FILE OF THE AO FOR RECONSIDERATION IN THE LIGHT OF THE SUBMISSION MADE BY THE LD. COUNSEL FOR ASSESSEE. TH E AO SHALL GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. AS A RESULT, PART OF THIS GROUND OF T HE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. A SSESSEE MAY PROVIDE ADEQUATE MATERIAL BEFORE THE AO IN SUPPORT OF THE CONTENTION. 25. ACCORDINGLY, WE, RESPECTFULLY FOLLOWING THE DECISI ON OF COORDINATE BENCH, RESTORE THIS ISSUE TO THE FILE OF THE A.O. FOR ADJUDICATION AFRESH THEREOF IN IDENTICAL MANNER. TH US, THIS, GROUND OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. 26. GROUND NO. 4 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF EXCESS CLAIM OF DEP RECIATION AMOUNTING TO RS. 19,81,381/-. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE CLAIMED DEPRECIATION AT RS.25,89,577/-. 27. THE A.O., HOWEVER, HELD THAT PRIOR TO ASSESSMENT YE AR 2002-03, THE ASSESSEE WAS NOT FILING RETURN OF INCOME AND AS PER PROVISIONS OF LAW, PAGE 11 OF 18 THE DEPRECIATION WAS TO BE ALLOWED ON W.D.V. AS ON 1.4.2002 BY DEEMING THAT THE DEPRECIATION ON ASSETS ACQUIRED PRIOR TO T HAT DATE HAD BEEN ACTUALLY ALLOWED PLUS ALL THE ADDITIONS MADE THEREA FTER. ACCORDINGLY, HE REWORKED OUT QUANTUM OF DEPRECIATION AT RS. 6,08,18 9/- AND DISALLOWED EXCESS DEPRECIATION OF RS. 19,81,381/-. THE ASSESSE E, BEING AGGRIEVED, PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO AFTE R CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, HELD THAT THE ASSESSEE HAD CLAIMED DEPRECIATION CORRECTLY ON W. D. V. OF ASSETS AS ON 01.04.2002, HENCE, HE DELETED THE ADDITION. AGGRIEVED BY THIS, THE REVENU E IS IN APPEAL BEFORE US. 28. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE FACT WHETHER THE VALUE OF ASSETS SHOWN AS ON 1.4.2002 WA S W.D.V. OR HISTORICAL COST, NEEDED VERIFICATION AS THE A.O. HA D WORKED OUT THE CORRECT DEPRECIATION AS PER DETAILS OBTAINED BY HIM FROM TH E ASSESSEE. 29. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, ARGUED THE MATTER AT LENGTH AND BESIDES PLACING STRONG REL IANCE ON THE ORDER OF THE LD. CIT(A). 30. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND ORDERS OF THE AUTHORITIES BE LOW. IT IS NOTED THAT THE DISPUTE IS REGARDING THE ACTUAL NATURE OF VALUE OF ASSETS SHOWN AS ON 1.4.2002 I.E. WHETHER ITS W.D.V. OR HISTORICAL COST , SO AS TO WORK OUT THE PAGE 12 OF 18 CORRECT QUANTUM OF DEPRECIATION ALLOWABLE TO THE AS SESSEE. IT IS ALSO NOTED THAT BALANCE SHEETS OF YEARS PRIOR TO FINANCIAL YE AR ENDED ON 31.3.2002 HAVE NEITHER BEEN PRODUCED BEFORE US NOR BEFORE THE LD. CIT(A), SO THAT THE CLAIMS OF THE ASSESSEE IN THIS REGARD, COULD BE VERIFIED. HENCE, IN THE INTEREST OF JUSTICE, WE RESTORE THIS ISSUE TO THE F ILE OF A.O. TO VERIFY THE CORRECT FACTS AND DECIDE THE ISSUE AFRESH AS PER LA W, AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. BEFORE PART ING, WE MAY ADD THAT IF VALUE OF ASSETS SHOWN AS ON 1.4.2002 IS W.D.V., THE N, THE ASSESSEES CLAIMS ARE LIABLE TO BE ACCEPTED. THUS, THIS GROUND OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES, SUBJECT TO OUR OB SERVATIONS MADE HEREINABOVE. 31. GROUND NO. 5 READS AS UNDER :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF INTEREST ON FDR ON ARAKSHIT NIDHI OF RS. 16,58,963/-. 32. THE LEARNED COUNSEL FOR THE ASSESSEE FAIRLY SUBMITT ED THAT THIS ISSUE WAS COVERED AGAINST THE ASSESSEE BY THE DECI SION OF THE TRIBUNAL IN THE CASE OF KRISHI UPAJ MANDI SAMITI, BURHANPUR IN I.T.A.NO. 277 & 278/IND/2008 ORDER DATED 24.10.2008 AND DREW OUR AT TENTION TO PARA 9 AT PAGES 12 & 13 OF THE SAID ORDER, WHEREIN THE TRIBUN AL HAD HELD THAT PAGE 13 OF 18 INTEREST ON FUNDS RETAINED BY THE ASSESSEE WAS INCL UDIBLE IN ITS INCOME. ACCORDINGLY, WE ACCEPT THIS GROUND OF THE REVENUE. 33. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STAN DS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 34. NOW, WE SHALL TAKE UP REVENUES APPEAL IN I.T.A.NO. 271/IND/2009. 35. THE ISSUE RAISED IN GROUND NO. 1 IS IDENTICAL TO IS SUE RAISED IN GROUND NO.1 OF I.T.A.NO. 76/IND/2008, HENCE, FOLLOW ING THE SAME REASONING, WE DISMISS THIS GROUND OF THE REVENUE. 36. THE ISSUE RAISED IN GROUND NO. 2 IS IDENTICAL TO IS SUE RAISED IN GROUND NO.2 OF I.T.A.NO. 76/IND/2008, HENCE, FOLLOW ING THE SAME REASONING, THIS GROUND OF REVENUE IS ALSO DISMISSED . 37. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 38. NOW, WE SHALL TAKE UP APPEAL IN I.T.A.NO. 272/IND/2 009. 39. THE ISSUE RAISED IN TWO GROUNDS OF THIS APPEAL ARE IDENTICAL TO ISSUE RAISED IN APPEAL NO. 271/IND/2009 HEREINBEFOR E. HENCE, BOTH THESE GROUNDS OF THE REVENUE ARE ALSO DISMISSED FOR THE S AME REASONS. 40. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS D ISMISSED. 41. NOW, WE SHALL TAKE UP ASSESSEES CROSS OBJECTION NO . 54/IND/2009. 42. GROUND NO.1 READS AS UNDER :- PAGE 14 OF 18 THAT THE LD. CIT(A) HAS ERRED IN FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 12,76,125/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF PENSION FUNDS RESER VE. 43. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS ENGAG ED IN FACILITATING OF SALE/MARKETING OF AGRICULTURE PRODU CTS. AS PER THE REGULATION AND POLICY OF CENTRAL/STATE GOVERNMENT, THE ASSESSEE TRANSFERRED 8 % OF LICENCE/MARKET FEE TO RESERVE FU ND CREATED FOR THE PURPOSE OF PAYMENT OF PENSION TO EMPLOYEES OF THE S TATE BOARD SERVICE AND MANDI SAMITI. THE ASSESSEE OUT OF SUCH PROVISIO N REMITTED 1/3 RD TO THE MANDI SAMITI BOARD AND KEPT 2/3 RD OF SUCH FUNDS WITH ITSELF. THE A.O. HELD THAT NO ACTUAL PAYMENT TOWARDS PENSION HAD BEE N MADE, HENCE, THE ASSESSEES SHARE OUT OF SUCH TRANSFER COULD NOT BE CONSIDERED AS AN ASCERTAINED LIABILITY OF REVENUE NATURE. ACCORDINGL Y, HE DISALLOWED A SUM OF RS. 12,76,125/-, BEING THE ASSESSEES SHARE. AGG RIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A), WHO AFTER PERUSING THE RULES & REGULATIONS OF M.P. KRISHI UPA J MANDI ADHINIYAM & RULES, HELD THAT SUCH SUM WAS ALLOWABLE AS DEDUCT ION. AGGRIEVED BY THIS, REVENUE IS IN APPEAL BEFORE US. 44. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE VERY O UT-SET, SUBMITTED THAT INDORE BENCH OF THE TRIBUNAL IN THE CASE OF KRISHI UPAJ MANDI SAMITI, BURHANPUR VS. ITO IN I.T.A.NOS. 277 & 278/IND/2008 PAGE 15 OF 18 ORDER DATED 24.10.2008 HAD RESTORED THIS ISSUE TO T HE FILE OF A.O. AND DREW OUR ATTENTION TO RELEVANT PART OF PARA 9 AT PA GES 13 & 14 OF THE SAID ORDER. HE ALSO SUBMITTED THAT IN ANOTHER CASE OF KR ISHI UPAJ MANDI SAMITI, THE AMOUNT OF SUCH PROVISION HAD BEEN HELD AS ALLOWABLE BY THE TRIBUNAL. HOWEVER, HE COULD NOT PLACE A COPY OF SUC H ORDER ON RECORD. 45. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER H AND, PLACED RELIANCE ON THE ORDER OF THE A.O. 46. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 47. THOUGH THE ASSESSEE HAS CONTENDED THAT THIS ISSUE W AS COVERED IN FAVOUR OF THE ASSESSEE ON MERITS BY AN ORDER OF THE TRIBUNAL. HOWEVER, THE ASSESSEES COUNSEL HAS NOT PLACED COPY OF THE S AID ORDER ON RECORD AND THE COPY OF THE ORDER OF THE TRIBUNAL, WHICH HAS BE EN PLACED ON RECORD SHOWS THAT THIS ISSUE HAS BEEN RESTORED TO THE FILE OF THE A.O. ,FOR CONSIDERATION OF CERTAIN ASPECTS AND ADJUDICATION O F THE ISSUE AFRESH AS PER LAW. THE RELEVANT FINDINGS OF THE ORDER OF THE TRIB UNAL IN I.T.A.NO. 277 & 278/IND/2008 ARE AS UNDER :- AS REGARDS PART OF GROUND NO.9 WITH REGARD TO AARA KSHIT NIDHI, IT IS STATED TO BE CONTRIBUTION MADE FOR MEE TING THE FUTURE LIABILITY ON ACCOUNT OF PENSION, GRATUITY ET C. THE ASSESSEE IS ADMITTEDLY MAINTAINING CASH SYSTEM OF ACCOUNTING AND AS SUCH, AUTHORITIES BELOW WERE JUST IFIED IN PAGE 16 OF 18 HOLDING THAT THE PROVISION COULD NOT HAVE BEEN ALLO WED UNLESS THE LIABILITY AROSE. THE AUTHORITIES BELOW H AS HOWEVER NOT CONSIDERED THE RULE REFERRED TO BY LD. COUNSEL FOR ASSESSEE IN HIS ARGUMENTS AND HAVE ALSO NOT GIVEN A NY FINDING IF THE ASSESSEE SPENT ANY ACTUAL AMOUNT ON THIS HAND UNDER THE YEAR APPEAL BECAUSE ON PROVISION BASIS TH IS YEAR, THE ASSESSEE MIGHT HAVE MADE CLAIM IN EARLIER YEAR FOR WHICH, THE AMOUNT COULD HAVE BEEN SPENT BY THE ASSE SSEE. LD. COUNSEL FOR ASSESSEE HAS FILED COPY OF THE LETT ER DATED 9.7.8 (PB-34) THROUGH WHICH ASSESSEE WAS DIRECTED T O KEEP AARAKSHIT NIDHI IN SUCH A FIND FOR THE PURPOSE OF M AKING THE PAYMENTS. LD. COUNSEL FOR ASSESSEE ALSO REFERRED TO THE PROCEDURE FOR KEEPING ACCOUNTS ON THIS ISSUE. HOWEV ER, WE FIND THAT THE SAME IS NOT CONSIDERED BY THE AUTHORI TIES BELOW. THIS ISSUE THEREFORE, REQUIRES RECONSIDERATION AT T HE LEVEL OF THE AO. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE AND RESTORE THE ISS UE TO THE FILE OF THE AO FOR RECONSIDERATION IN THE LIGHT OF THE SUBMISSION MADE BY THE LD. COUNSEL FOR ASSESSEE. TH E AO SHALL GIVE REASONABLE SUFFICIENT OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. AS A RESULT, PART OF THIS GROUND OF T HE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. A SSESSEE MAY PROVIDE ADEQUATE MATERIAL BEFORE THE AO IN SUPPORT OF THE CONTENTION. 48. ACCORDINGLY, WE, RESPECTFULLY FOLLOWING THE DECISI ON OF COORDINATE BENCH, RESTORE THIS ISSUE TO THE FILE OF THE A.O. FOR PAGE 17 OF 18 ADJUDICATION AFRESH THEREOF IN IDENTICAL MANNER. TH US, THIS, GROUND OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. 49. GROUND NO. 2 READS AS UNDER :- THAT THE LD. CIT(A) HAS FURTHER ERRED IN NOT DECID ING THE GROUND NO. 2 RAISED BY THE APPELLANT IN FORM NO. 35 REGARDING THE VALIDITY OF ASSESSMENT ORDER FRAMED U/S 143(3)/ 263 DATED 2.12.2008. 50. THIS GROUND WAS NOT PRESSED, HENCE, THE SAME IS DIS MISSED AS NOT PRESSED. 51. IN THE RESULT, CROSS OBJECTION FILED BY THE ASSESSE E STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 52. NOW, WE SHALL TAKE UP ASSESSEES CROSS OBJECTION NO . 55/IND/2009. 53. THE ISSUE RAISED IN THIS CROSS OBJECTION IS IDENTIC AL TO ISSUE RAISED IN GROUND NO.1 OF ASSESSEES CROSS OBJECTION IN C.O.NO. 54/IND/2009. HENCE, FOLLOWING THE SAME REASONS, THE ISSUE RAISED HEREIN STANDS RESTORED TO THE FILE OF THE A.O. ON SIMILAR LINES. 54. IN THE RESULT, THE CROSS OBJECTION FILED BY THE ASS ESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 55. TO SUM UP, THE REVENUES APPEAL IN I.T.A.NO. 128/IN D/2007 IS DISMISSED, REVENUES APPEAL IN I.T.A.NO. 76/IND/08 STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES, REVENUES APPEALS IN I.T.A.NOS. 271 & PAGE 18 OF 18 272/IND/2009 ARE DISMISSED AND CROSS OBJECTIONS FIL ED IN C.O. NOS. 54 & 55/IND/2009 STAND PARTLY ALLOWED FOR STATISTICAL PU RPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 12 TH OCTOBER, 2009. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 12 TH OCTOBER, 2009. CPU* 78D8