M/s Krishi Upaj Mandi Samiti, Agar V. The ITO, Ujjain

ITA 198/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1399 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-11-2009
• Assessment Year: misc
• Appeal Filed On: 17-04-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V K KARAN
• Assessee Lawyers: S K AGRAWAL
• Keywords: Depreciation; Charitable institution; Revised return; Revenue expenditure; Capital expenditure; Set aside
• Section: 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI V.K. GUPTA, AM ITA NO.249/IND/2009 AY: 2005-06 KRISHI UPAJ MANDI SAMITI, BARNAGAR (PAN AAALK 0160D) .....APPELLANT V/S. INCOME TAX OFFICER 2(1), UJJAIN .....RESPONDENT AND ITA NO. 198/IND/09 A.Y. 2005-06 KRISHI UPAJ MANDI SAMITI AGAR, DISTT. SHAJAPUR APPELLANT VS. INCOMETAX OFFICER 2(1), UJJAIN RESPONDENT ASSESSEES BY :SHRI S.K. AGRAWAL, CA DEPARTMENT BY :SHRI V.K. KARAN, SR. DR O R D E R PER JOGINDER SINGH, JM THESE APPEALS ARE BY THE ASSESSEES AGAINST THE ORD ERS OF THE LD. CIT(A) DATED 19.3.2009 AND 24.3.2009, RESPECTIVELY ON IDEN TICAL GROUNDS. FIRST WE 2 SHALL TAKE UP ITA NO. 249/IND/09. DURING HEARING O F THIS APPEAL WE HAVE HEARD LEARNED REPRESENTATIVES FROM BOTH SIDES AND CONSIDE RED THE ARGUMENTS ADVANCED BY THEM. THE FIRST GROUND RAISED IS THAT THE LEARNED CIT ERRED IN REJECTING THE REVISED RETURN FILED BY THE ASSESSEE FOR CLAIMING EXEMPTION U/S 11 OF THE ACT, IN VIEW OF REGISTRATION U/S 12A/12AA OF THE ACT, RECEIVED BY THE ASSESSEE ON 23.12.2006. AT THE OUTSET IT WAS POINTE D OUT THAT THE SLP FILED BY THE DEPARTMENT AGAINST THE ORDER DATED 18.1.2008 PA SSED IN ITA NO. 256/2007 BY THE HONBLE HIGH COURT OF MADHYA PRADESH WAS DIS MISSED BY THE HONBLE APEX COURT VIDE ORDER DATED 23.1.2009. THE ASSESSE E ALSO FURNISHED A COPY OF THE ORDER DATED 23.1.20009 OF THE HONBLE SUPREME C OURT OF INDIA. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE. IN VIEW OF THESE FACTS AND THE ARGUMENTS ADVANCED B Y THE LD. RESPECTIVE COUNSEL, WE ARE OF THE VIEW THAT THE ORDER OF THE H ONBLE HIGH COURT STANDS ON DATE, CONSEQUENTLY, THIS GROUND OF THE ASSESSEE IS SET ASIDE TO THE FILE OF THE LD. AO TO DECIDE THE ISSUE IN THE LIGHT OF THE FACT THA T THE ASSESSEE IS A CHARITABLE INSTITUTION FOR WHICH REGISTRATION U/S 12A/12AA WAS GRANTED ON 23.12.2006 AND IN ACCORDANCE WITH LAW. THEREFORE, THIS GROUND OF T HE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 2. THE NEXT GROUND PERTAINS TO RESTRICTING THE CLAI M OF DEPRECIATION ON FIXED ASSET WITH REFERENCE TO WRITTEN DOWN VALUE WORKED O UT ON THE BASIS OF CLAIM OF DEPRECIATION IN EARLIER YEAR AND CONSEQUENT DISA LLOWANCE OF RS. 33,88,684/-. 3 THIS GROUND WAS NOT PRESSED BY THE LEARNED COUNSEL FOR THE ASSESSEE, CONSEQUENTLY, IT IS DISMISSED AS NOT PRESSED. 3. THE NEXT GROUNDS I.E. 3 TO 6 PERTAIN TO KISAN SA DAK NIDHI EXPENSES, KRISHI ANUSANDHAN NIDHI EXPENSES, BOARD SHULK EXPENSES AND DISALLOWING OF ARAKSHIT NIDHI EXPENSES. AT THE OUTSET IT WAS CLAIMED THAT T HESE GROUNDS ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL DATED 24 TH OCTROBER, 2008 IN THE CASE OF M/S KRISHI UPAJ MANDI SAMITI, BURHAN PUR V. ITO (2009) 12 ITJ 12 (INDORE ITAT) AND VARIOUS OTHER DECISIONS OF THE T RIBUNAL. THE ASSERTION OF THE ASSESSEE WAS NOT CONTROVERTED BY THE REVENUE. IN V IEW OF THIS FACT, GROUND NOS. 3 TO 6 RAISED BY THE ASSESSEE ARE ALLOWED IN I TS FAVOUR. 4. GROUND NO. 7 PERTAINS TO DISALLOWING THE AMOUNT OF RS. 48,650/- AS ADVERTISEMENT EXPENSES. THE CLAIM OF THE ASSESSEE IS THAT THE IMPUGNED AMOUNT WAS EXPENDED ON ADVERTISEMENT FOR INVITING T ENDERS FOR CONSTRUCTION. THIS CLAIM OF THE ASSESSEE WAS NOT CONTROVERTED BY THE REVENUE THOUGH THE LD. DR SUPPORTED THE ASSESSMENT ORDER. ON PERUSAL OF RECORD AND AFTER HEARING THE RIVAL S UBMISSIONS, WE HAVE FOUND THAT THE LEARNED AO MADE THE DISALLOWANCE BY TREATING THE ADVERTISEMENT EXPENSES AS CAPITAL EXPENDITURE WHICH WAS AFFIRMED BY THE LEARNED CIT(A). SINCE IT IS NOT DISPUTED THAT THES E EXPENSES WERE EXPENDED FOR INVITING TENDERS FOR CONSTRUCTION, WE ARE OF THE CO NSIDERED OPINION THAT IT IS AN 4 ALLOWABLE REVENUE EXPENDITURE. WE, THEREFORE, ALLO W THIS GROUND OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN ITA NO. 198/IND/09, THE FACTS ARE IDENTICAL, THEREFORE, THE AFORESAID ORDER/REASONING WILL BE APPLICABLE TO THIS APPEAL A LSO. THEREFORE, THIS APPEAL OF THE ASSESSEE IS ALSO DECIDED AS ABOVE, CONSEQUENTL Y, THE SAME IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES FROM BOTH THE SIDES AT THE CONCLUSI ON OF THE HEARING ON 24.11.2008. SD/- SD/- (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMB ER NOVEMBER 24, 2009 COPY TO APPELLANT/RESPONDENT/CIT/CIT(A)/DR