ITO, NAGAUR V. Krishi Upaj Mandi Samiti, NAGAUR

ITA 219/JODH/2010

• Counselvise Citation: 21923314 RSA 2010
• Duration Of Justice: 2 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 08-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: U C JAIN
• Section: 12A; 194C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.K. SAINI ) ITA NO. 219 TO 221/JU/2010 ASSTT. YEARS : 2004-05 TO 2007-08. PAN: AABTK 1907 D THE ITO VS. KRISHI UPAJ MANDI SAMITI WARD- 1, NAGAUR NAGAUR, DISTT. NAGAUR (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI G.R. KOKANI ASSESSEE BY : SHRI U.C. JAIN DATE OF HEARING : 17.07.2012. DATE OF PRONOUNCEMENT : .17.07.2012 ORDER DATED : 17 /07/2012. PER R.K. GUPTA, J.M. THESE ARE THREE APPEALS BY THE DEPARTMENT AGAINST COMMON ORDER OF THE LD.CIT(A) DATED 08-02-2010 FOR THE ASSESSMENT YEARS 2004-05, 2005-06 AND 2007-08. 2.1 IN ITA NO. 221/JU/2010, THE DEPARTMENT HAS RAIS ED THE FOLLOWING GROUNDS:- IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF EXPENSES MADE U/S 40(A)(IA.)OF THE I.T. ACT. (I) IN RESPECT OF EXPENSES CLAIMED RS. 2,16,80,000 /- IN CONNECTION WITH MISSING LINK ROAD AND REPAIR, AND (II) EXPENSES RS. 83,960/- CLAIMED IN CONNECTION WI TH MISC. CONSTRUCTION WORK CONTRACT OBSERVING THAT THE PAYMENTS WERE APPLICABLE TO THE FUNDS BY THE ASSESSEE AND NOT EXPENSES UNDER HEAD PROFIT OR GAI N OF BUSINESS OR PROFESSION IGNORING THE FACT THAT THE PAYMENTS WERE MADE TO CONTRACTOR 2 THROUGH RSAMB U/S 194 OF THE I.T. ACT AND WERE LIAB LE FOR TDS ACCORDINGLY RIGHTLY DISALLOWED U/S 40(A)(IA). 2.2 THE AO MADE THE ADDITION OF RS. 2,17,63,960/- A S IN VIEW OF THE AO, THE ASSESSEE HAS NOT DEDUCTED THE TDS ON THE AMOUNT OF VARIOUS E XPENSES INCURRED BY THE ASSESSEE. IT WAS SUBMITTED BEFORE THE LD.CIT(A) THAT THE ON THE EXPENDITURE MADE, THE PROVISIONS OF SECTION 194C ARE NOT APPLICABLE AS THE PROVISIONS O F TDS ARE NOT ATTRACTED ON THESE DEBITS AS SECTION 40 IS APPLICABLE IN RESPECT OF THE EXPE NDITURE COVERED U/S 30 TO 38 OF THE ACT AND THE NATURE OF THESE DEBITS ARE NOT COVERED U/S 30 TO 38 OF THE ACT. THE LD.CIT(A) DELETED THE ADDITION BY OBSERVING THAT ON SIMILAR I SSUE THE ITAT JODHPUR BENCH IN ITA NO. 383, 370, 231,382 & 328 /JU/2009 FOR THE ASSESS MENT YEAR 2006-07 HAS DELETED THE ADDITION VIDE ITS ORDER DATED 22-07-2009. ACCORDING LY, THE LD.CIT(A) DELETED THE ADDITION. THE BENCH HAS OBSERVED THAT THE ASSESSEE IS HAVING REGISTRATION U/S 12A AND THE PAYMENT TO STATE MARKETING BOARD EITHER BY WAY OF C ONTRIBUTION OR BY WAY OF EXPENDITURE INCURRED ON CONSTRUCTION OF ROAD OR MIS SING LINKS IN THE ROAD AMOUNT TO DIVERSION OF FUND BY OVERRIDING TITLE. THEREFORE, T HE PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE. 2.3 THE LD. DR PLACED RELIANCE ON THE ORDER OF THE AO. 2.4 ON THE OTHER HAND, THE LD. AR RELIED UPON THE O RDER OF THE LD.CIT(A). 2.5 WE HAVE HEARD THE BOTH THE PARTIES AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE FOUND THAT THIS ISSUE IS COVERED BY THE ORDER OF THE ORDER OF THE TRIBUNAL AND EVEN BY A LATER DECISION OF THE TRIBUNAL DECIDED IN ITA NO. 249,245,246,247,248,250,99,101,102 AND 103/JU/2010 VIDE ITS ORDER DATED 1612-2011. WHI LE DELETING THE ADDITION, THE TRIBUNAL HAS TAKEN INTO CONSIDERATION THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS KRISHI UPAJ MANDI SAMITI, GAJSI NGHPUR & ORS, 227 CTR 79 AND THE 3 DECISION OF HONBLE GUJARAT HIGH COURT IN THE CAS E OF ZAVERCHAND LAXMI CHAND & CO. VS CIT , 55 ITR 486 AND THUS IT WAS HELD THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE NOT APPLICABLE AS THE ASSESSEE IS REGISTERED U/S 12A OF THE ACT.. IN VIEW OF THESE FACTS AND CIRCUMSTANCES OF THE CASE, WE CONFIRM THE ORDER OF THE LD.CIT(A) AS THE SIMILAR ISSUE HAS ALREADY BEEN DECIDED BY THE JODHPUR BENCH ITSELF.. 3.1 IN THE CASE OF OTHER APPEALS OF THE DEPARTMENT , SAME ISSUE WHICH IS RELATING TO DELETION OF ADDITION BY THE LD.CIT(A) U/S 40(A)(IA ) MADE BY THE AO. 3.2 THE LD.CIT(A) HAS DELETED THE ADDITION FOLLOWIN G THE DECISION OF THE TRIBUNAL (SUPRA). WE HAVE ALREADY DECIDED THE APPEAL OF KUMS , NAGAUR (SUPRA). THEREFORE, ON THE SAME REASONING, WE CONFIRM THE ORDER OF THE LD.CIT( A) IN OTHER APPEALS ALSO, AS THE ISSUE IS SIMILAR. 4.. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMI SSED.. 5. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17. 07.2012. SD/- SD/- ( N.K. SAINI ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JODHPUR, *MISHRA COPY FORWARDED TO :- 1. KRISHI UPAJ MANDI SAMITI CONCERNED 2. THE ITO CONCERNED. 3. THE LD.CIT (A) 4. THE LD CIT 5. THE D/R 6.GUARD FILE (ITA NO. 221/JU/2012- 03 APPEALS) BY ORDER, AR ITAT JODHPUR. 4