ITO, NAGAUR V. Krishi Upaj Mandi Samittee, MERTA CITY

ITA 223/JODH/2010

• Counselvise Citation: 22323314 RSA 2010
• Duration Of Justice: 2 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 08-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: R R SI NGHVI
• Section: 12A; 194C; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.K. SAINI ) ITA NO. 223/JU/2010 ASSTT. YEAR : 2007-08. PAN: AAATK 9636 Q THE ITO VS. KRISHI UPAJ MANDI SAMITI WARD- 1, NAGAUR NAGAUR, DISTT. NAGAUR (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI G.R. KOKANI ASSESSEE BY : SHRI R.R. SINGHVI DATE OF HEARING : 17.07.2012. DATE OF PRONOUNCEMENT : 17.07.2012 ORDER DATED : 17 /07/2012. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER OF THE LD.CIT(A) DATED 11- 02-2010 FOR THE ASSESSMENT YEAR 2007-08 WHEREIN TH E DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS:- IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A) HAS ERRED 1. IN DELETING THE DISALLOWANCE OF EXPENSES RS.61,5 0,000/- MADE U/S 40(A)(IA.)OF THE I.T. ACT OBSERVING THAT THE PA YMENT WAS APPLICATION OF FUNDS BY THE ASSESSEE AND NOT EXPENSES UNDER HEAD PROFIT OR GAIN OF BUSINESS OR PROFESSION IGNORING THE FACT THAT THE PAYMENTS WERE MADE TO CONTRACTOR THROUGH RSAMB U/S 194 OF THE I.T. ACT AN D WAS LIABLE FOR TDS ACCORDINGLY RIGHTLY DISALLOWED U/S 40(A)((IA) 2. DELETING THE EXPENSES RS. 1,24,970/-MADE U/S 40( A)(IA) OF THE ACT OBSERVING THAT THE PAYMENT WAS APPLICATION OF T HE FUNDS BY THE ASSESSEE AND NOT EXPENSES UNDER HEAD PROFIT OR GAI N OF BUSINESS OR PROFESSION IGNORING THE FACT THAT THE PAYMENTS WAS MADE TO CONTRACTOR FOR 2 JEEP HIRE U/S 194 WITHOUT TDS THOUGH THE PAYMENT WA S LIABLE FOR TDS ACCORDINGLY RIGHTLY DISALLOWED U/S 40(A)(IA). 2.2 THE AO MADE THE ADDITION OF RS. 62,74,970/- AS 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.. 4.. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED.. 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. 223/JU/2012- 01 APPEAL) BY ORDER, AR ITAT JODHPUR.