Dy.C.I.T.Circle-5, Firozabad V. M/s Krishi Utpadan Mandi Samiti, Etawah

ITA 154/AGR/2010

• Counselvise Citation: 15420314 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 14-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HOMI RAJVANSH
• Assessee Lawyers: M M AGARWAL
• Keywords: Charitable institution
• Section: 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO. 154/AGRA/2010 ASSTT. YEAR : 2006-07 D.C.I.T., CIRCLE 5, VS. M/S. KRISHI UTPADAN MA NDI SAMITI, FIROZABAD. BHARTHANA, ETAWAH. (PAN : AAALK 0736 D) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI HOMI RAJVANSH, CIT/DR FOR RESPONDENT : SHRI M.M. AGARWAL, C.A. DATE OF HEARING : 17.08.2011 DATE OF PRONOUNCEMENT : 18.08.2011 ORDER PER BENCH : THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 15.02.2010 OF LEARNED CIT(A)-II, AGRA ON THE FOLLOWING GROUNDS : 1. THAT THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS)-II, AGRA HAS ERRED IN LAW AND ON FACTS IN ALLOWING DISALLOWANCE OF RS.22,60,000/- MADE BY THE AO WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. THAT THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS)-II, AGRA HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OFRS.34,48,626/- MADE TOWARDS DEVELOPMENT CESS AS APPLICATION OF INCOME WITHOUT A PPRECIATING THE FACTS OF THE CASE. 3. THAT THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS)-II, AGRA HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO ALLOW ACC UMULATION OF RS.47,69,419/- INSTEAD OF RS.14,18,559/- ALLOWED BY THE AO WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. THE FACTS NARRATED BY THE REVENUE AUTHORITIES AR E NOT DISPUTED BY BOTH THE PARTIES. THEREFORE, THERE IS NO NEED TO REPEAT THE SAME FOR THE SAKE OF REPETITION. 2 3. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE STATED THAT ISSUES INVOLVED IN GROUND NO. 1 & 2 HAVE ALREADY BEEN ADJUDICATED BY THIS BEN CH AND DECIDED IN FAVOUR OF THE ASSESSEE IN THE CASE OF KRISHI UTPADAN MANDI SAMITI, AURIYA FO R A.Y. 2005-06, WHERE THE DISALLOWANCES OF SIMILAR NATURE HAVE BEEN DELETED BY ITAT, AGRA BENC H. THE LEARNED FIRST APPELLATE AUTHORITY HAS DELETED THESE ADDITIONS BY FOLLOWING THE ORDER OF T HIS BENCH PASSED IN ITA NO. 545/AGRA/2008. HE FURTHER STATED THAT AGGRIEVED BY THE SAID ORDER OF THE TRIBUNAL, THE DEPARTMENT FILED APPEALS BEFORE THE HONBLE JURISDICTIONAL HIGH COURT, WHICH HAVE ALSO BEEN DISMISSED ON 02.12.2010. HE REQUESTED THAT THE ISSUE INVOLVED IN GROUND NO. 1 A ND 2 MAY BE DISMISSED BY FOLLOWING THE SAID ORDER OF ITAT. 4. ON THE CONTRARY, LD. DR RELIED ON THE ORDER PASS ED BY THE ASSESSING OFFICER. 5. WE HAVE HEARD THE BOTH PARTIES ON THE ISSUES INV OLVED IN GROUND NO. 1 & 2. WE HAVE ALSO THOROUGHLY GONE THROUGH THE ORDER PASSED BY THIS BE NCH IN THE CASE OF ACIT-1, AGRA VS. M/S. KRISHI UTPADAN MANDI SAMIT, DISTT. AURAIYA (UP) FOR THE ASSESSMENT YEAR 2005-06 DATED 14.07.2009 AND THE ORDER PASSED BY THE HONBLE JURI SDICTIONAL HIGH COURT UPHOLDING THE ORDER OF THIS BENCH ON 02.12.2010, WHICH THE ASSESSEE HAS AT TACHED IN ITS PAPER BOOK AT PAGE 9 TO 16 AND 35 TO 37 RESPECTIVELY AND WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THIS BENC H BY DISMISSING THE APPEALS FILED BY THE DEPARTMENT AND THE HONBLE JURISDICTIONAL HIGH COUR T HAS ALSO UPHELD THE ORDER OF THIS BENCH ON 02.12.2010. RESPECTFULLY FOLLOWING THE SAME, THE IS SUES INVOLVED IN GROUND NO. 1 & 2 ARE DISMISSED. 3 6. AS REGARD TO THE ISSUE INVOLVED IN GROUND NO. 3 IN WHICH THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER IN WHICH THE LD. FIRST APPELLATE AUT HORITY HAS DIRECTED THE ASSESSING OFFICER TO ALLOW ACCUMULATION OF RS.4769419/- INSTEAD OF RS.14 18559/-. 7. AFTER HEARING THE BOTH PARTIES AND PERUSING THE ORDER PASSED BY THE REVENUE AUTHORITIES, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER FOUND THAT THERE HAS BEEN ADDITION OF RS.14,70,984.00 ONLY IN THE FIXED ASSETS DURING THE YEAR UNDER THE HEAD, BUILDING, FURNITURE, FIXTURE AND ELECTRICAL EQUIPMENT AS PER SCHEDULE O F FIXED ASSETS FORMING PART OF BALANCE SHEET, BUT THERE IS NO EVIDENCE TO THE EFFECT THAT AMOUNT OF RS.1,47,48,626.55 SHOWN TO HAVE BEEN PAID TO UTTAR PRADESH RAJYA KRISHI UTPADAN MANDI PARISHA D, LUCKNOW FOR THE DEVELOPMENT WORK AS PER RECEIPT AND PAYMENT ACCOUNT HAS BEEN ULTIMATELY UTILIZED FOR DEVELOPMENT WORK IN THE AREA OF SAMITI DURING THAT PERIOD. HE IS OF THE OPINION THA T AT THE MOST AMOUNT TO THE EXTENT OF FIXED ASSETS ADDED CAN BE TREATED TO HAVE BEEN APPLIED FO R CHARITABLE PURPOSE. THE AMOUNT AS CLAIMED TO HAVE BEEN REMITTED TO UTTAR PRADESH RAJYA KRISHI UTPADAN MANDI PARISHADE, LUCKNOW HAS NOT BEEN ULTIMATELY APPLIED FOR DEVELOPMENT WORK IN THE AREA UNDER CONTROL OF ASSESSEE-SAMITI. ASSESSING OFFICER HAS NOT ACCEPTED THE AVERMENT OF THE ASSESSEE AND LASTLY, HE HAS ALLOWED RS.14,18,559/- AS ACCUMULATED AMOUNT KEPT WITH THE BANK INSTEAD OF RS.47,69,419/-. AFTER GOING THROUGH THE IMPUGNED ORDER, WE ARE OF THE VIEW THAT THE ASSESSEE FILED COPY OF BALANCE SHEET OF THE SUBSEQUENT YEAR TO SHOW THAT AMOUNT OF RS.2,44, 22,740/- WAS INCURRED DURING THAT YEAR TOWARDS CONSTRUCTION OF LINK ROADS. IN RESPECT OF A CCUMULATION OF INCOME, APART FROM THE FACT THAT FORM NO. 10 BEING THE NOTICE PRESCRIBED FOR ACCUMUL ATION OF INCOME ITSELF STATES THAT AMOUNT IS TO BE INVESTED IN THE MODES SPECIFIED UNDER SECTION 11 (5) OF THE IT ACT WITHIN A PERIOD OF SIX MONTHS FROM THE RELEVANT FINANCIAL YEAR. THE CLAIM OF THE ASSESSEE, ON THE OTHER HAND IS THAT SUBSTANTIAL AMOUNT HAS BEEN ADVANCED TO THE CONSTRU CTION DIVISION AND IT TAKES SOMETIME FOR 4 EXECUTION OF PROJECT. ASSESSEE HAS ALSO FILED ITS E VIDENCE BEFORE THE ASSESSING OFFICER WHICH HAS NOT PROPERLY BEEN APPRECIATED BY HIM BUT THE LD. FI RST APPELLATE AUTHORITY HAS APPRECIATED THE SAME AND HAS RIGHTLY HELD THAT THE ASSESSEE HAS PAR TED THE AMOUNT FOR EXPENDITURE ON DEVELOPMENT WORK WHICH WERE IN PIPELINE, THEN IT WO ULD BE TOO TECHNICAL APPROACH TO HOLD THAT SAID AMOUNT SHOULD HAVE BEEN KEPT IN BANK ACCOUNT W ITHIN THE FINANCIAL YEAR. 8. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES E XPLAINED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT ASSESSEE HAD COMPLIED WITH THE PROVISI ONS OF LAW IN THIS REGARD AND IT SHOULD BE ALLOWED THE ACCUMULATION OF WHOLE OF THE AMOUNT AS CLAIMED IN THE NOTICE FILED BY IT AND THE LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO ALLOW ACCUMULATION OF RS.47,69,419/- INSTEAD OF RS.14,18,559/- ALLOWED BY THE ASSESSING OFFICER. WE FOUND NO INFIRMITY IN THE IMPUGNED ORDER. THEREFORE, WE UPHO LD THE SAME BY DISMISSING THE APPEAL FILED BY THE DEPARTMENT. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- (K.G. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 TH AUGUST, 2011 *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY 5 DOD : 18.8 DOT : 18.8 DOR :