Agricultural Market Committiee, Akividu V. THE ITO., Bhimavaram

ITA 234/VIZ/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6445 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 04-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D J P ANAND
• Keywords: Charitable institution; Additional evidence
• Section: 143(3); 12; 11; 15

Judgement Text

ITA NOS.233 & 234 OF 2015 /VIZAG/2015 AKIVIDU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . [ , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.233&234/VIZAG/2015 ( [ [ / ASSESSMENT YEAR: 2003-04 & 2004-05) AGRICULTURAL MARKET COMMITTEE AKIVIDU ITO, WARD - 2, BHIMAVARAM [PAN NO. AAKFA8420C ] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI D.J.P. ANAND, DR / DATE OF HEARING : 29.11.2017 / DATE OF PRONOUNCEMENT : 20.12.2017 / O R D E R PER BENCH: THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) {CIT(A)}, RAJAHMUNDRY. SINCE, THE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, THEY ARE CLUBBED, HEARD TOGETHER AND DISPOSED-OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.233 & 234 OF 2015 /VIZAG/2015 AKIVIDU 2 ITA NO.233/VIZAG/2015 (A.Y.2003-04): 2. ASSESSEE IS AN AGRICULTURAL MARKET COMMITTEE ENGAGED IN THE ACTIVITY OF COLLECTION OF MARKET CESS ON AGRICULTURAL MARKET PRODUCE AND LIVESTOCK, ETC. FOR UTILIZATION OF THE SAME AMOUNT FOR THE PURPOSE OF UPLIFTMENT OF FARMERS. ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) R.W.S. 254 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') BY AN ORDER DATED 06.01.2014 ON TOTAL INCOME OF 2,23,98,022/-. THE ASSESSEE HAD CLAIMED THE EXEMPTION OF ITS INCOME U/S 11 & 12 OF THE ACT, WHICH WAS REJECTED BY THE AO FOR VIOLATION OF PROVISIONS U/S 11(5) OF THE ACT AND TAXED THE ENTIRE INCOME. ON APPEAL BEFORE THE CIT(A), THE LD. CIT(A) ALLOWED THE EXEMPTION IN RESPECT OF THE INCOME U/S 11 OF THE ACT HOLDING THAT THE ASSESSEE CANNOT BE HELD TO BE VIOLATED THE CONDITIONS LAID DOWN U/S 11(5) OF THE ACT. HOWEVER, THE LD.CIT(A) CONFIRMED THE ADDITIONS IN RESPECT OF SUPPLY OF FODDER SEEDS 47,29,000/-, GODOWNS FOR DROUGHT RELIEF OF 26,55,000/- AND ALSO DIRECTED THE A.O. TO DISALLOW FURTHER SUM OF 48,51,459/- IN RESPECT OF LINK ROADS AND RURAL GODOWNS FOR THE REASON THAT THE ASSESSEE FAILED TO PROVIDE THE NECESSARY SANCTION ORDER OF THE DIRECTOR OF MARKETING OR THE G.O. FROM THE GOVERNMENT OF ANDHRA PRADESH OR THE UTILIZATION CERTIFICATE FOR THE SAID EXPENSES. FOR READY REFERENCE, WE EXTRACT RELEVANT PART OF THE ORDER OF THE CIT(A) WHICH READS AS UNDER: ITA NOS.233 & 234 OF 2015 /VIZAG/2015 AKIVIDU 3 6.4.1 WITH REGARD TO THE AMOUNT OF RS.47.29 LAKHS, REFERRED AT SL.NO.2 OF TABLE REFERRED ABOVE, THE AR GAVE 1 ST PAGE OF ORDER OF DIRECTOR OF MARKETING DATED 18.3.2003 IN UNIT NO.VI(1) (2) 227/2003. THE COMPLETE ORDER BEARING THE SIGNATURE OF DIRECTOR OF MARKETING COULD NOT BE FURNISHED. NOR THE GO BASED ON WHICH THE SAID ORDER WAS PASSED COULD BE FURNISHED. WITH REFERENCE TO OTHER PAYMENTS REFERRED ABOVE, NAMELY OF AMOUNTS OF RS.26,55,000/- AND RS.48,51,459/-, THE AR COULD NOT FURNISH ANY INFORMATION. AS THE ASSESSEE FAILED TO PROVIDE THE SANCTION ORDER OF THE DIRECTOR OF MARKETING OR THE GO OR THE UTILIZATION CERTIFICATE FOR THESE EXPENSES, IT IS HELD THAT THESE EXPENDITURE CANNOT BE CONSIDERED TO BE INCURRED TOWARDS THE PURPOSE OF THE ASSESSEE COMMITTEE AND CANNOT BE RECKONED AS 'INCOME APPLIED FOR CHARITABLE PURPOSE' DURING THE YEAR, AND SUCH INCOME AMOUNTING TO RS.1,22,35,459/- (RS.`RS.47,29,000 + RS.26,55,000 + RS.48,51,459) WOULD NOT BE ELIGIBLE FOR EXEMPTION UNDER SECTION 11 OF THE I.T. ACT. ACCORDINGLY, THE AO IS DIRECTED TO RECOMPUTE THE INCOME OF THE ASSESSEE. 3. FURTHER THE LD. CIT(A) HAS ALSO CONFIRMED THE ADDITIONS OF GODOWN RENT FOR FERTILIZER 73,625/- AND THE DIFFERENCE IN RECEIPTS AND PAYMENTS ACCOUNTS 1,35,175/-. 4. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL RAISING THE FOLLOWING GROUNDS OF APPEAL: 1) THE ORDER DT. 19-03-2015 OF THE COMMISSIONER OF INCOME TAX (APPEALS), RAJAHMUNDRY(I/C), IN ITA NO. 050/13-14/963/ITO W-2 BHM/2014-15 FOR THE ASST. YEAR 2003-04, IS CONTRARY TO LAW, THE WEIGHT OF EVIDENCE AND PROBABILITIES OF THE CASE. 2) THE ID. CIT(A) OUGHT TO HAVE SEEN THAT THE APPELLANTS ENTIRE INCOME WAS EXEMPT UNDER THE PROVISION OF SECS. 11 & 12 OF THE ACT. 3) THE LD. CIT(A) SHOULD HAVE SEEN THAT THE AMOUNT UTILIZED FOR SUPPLY OF FODDER SEEDS (RS. 47,29,000), FOR GODOWNS FOR DROUGHT RELIEF (RS. 26,55,000) AND FOR LINK ROADS & RURAL GODOWNS (RS. 48,51,459) WAS INCURRED FOR THE OBJECTIVES OF THE COMMITTEE CONTAINED UNDER SECTION 15 OF THE A,P.(AGRICULTURAL PRODUCE AND LIVE STOCK) MARKETS ACTS,1966, UNDER WHICH APPELLANT WAS CONSTITUTED. 4) THE LD. CIT(A) SHOULD HAVE SEEN THAT THE ISSUE OF ALLOWANCE OF THE EXPENDITURE TOWARDS LINK ROADS & RURAL GODOWNS WAS NOT PART OF THE ASST. ORDER OR THE GROUNDS RAISED BEFORE HIM BY THE APPELLANT. 5) THE LD. CIT(A) FAILED TO SEE THAT THE EXPENDITURE TOWARDS SUPPLY OF FODDER SEEDS, GODOWNS FOR DROUGHT RELIEF AND LINK ROADS & RURAL GODOWNS WAS SPENT ITA NOS.233 & 234 OF 2015 /VIZAG/2015 AKIVIDU 4 AS PER THE GOVT'S ORDERS. 6) IN ANY CASE, THE LD. CIT(A) OUGHT TO HAVE SEEN THAT THE DEFICIT IN THE AMOUNT TO BE UTILIZED AS PER SEC. 11(2) AS A RESULT OF THE ABOVE DISALLOWANCES WAS UTILIZED WITHIN THE PERIOD MENTIONED IN THE PROVISO TO SEC. 11(2) AND HENCE SHOULD HAVE ALLOWED THE APPELLANT TO RECTIFY THE NOTICE OF ACCUMULATION IN FORM NO.10. 7) THE LD. CIT(A) SHOULD HAVE SEEN THAT THE GODOWN RENT FOR FERTILIZERS (RS.73,625/-) WAS INCURRED FOR APPELLANTS CHARITABLE OBJECTIVES AND HENCE ALLOWABLE. 8) THE LD. CIT(A) SHOULD HAVE SEEN THAT INTEREST ON INVESTMENTS (RS.1,35,175/- ) WAS RECEIVED AS PART OF APPELLANTS CHARITABLE ACTIVITIES AND HENCE EXEMPT. 9) IN ANY CASE, THE LD. CIT(A) OUGHT TO HAVE SEEN THAT THE GODOWN RENT FOR FERTILIZERS AND INTEREST ON INVESTMENT ARE DULY RECORDED IN THE STATE AUDITED RECEIPTS AND PAYMENTS STATEMENT AND HENCE HE SHOULD HAVE IGNORED THE INCOME & EXPENDITURE STATEMENT. 10) FOR THESE AND OTHERS THAT MAY BE URGED AT THE TIME OF APPEAL HEARING, APPELLANT PRAYS THE APPEAL MAY BE ALLOWED. 5. GROUND NOS.1 & 10 ARE GENERAL IN NATURE, WHICH DO NOT REQUIRE SPECIFIC ADJUDICATIONS. 6. GROUND NOS.2 TO 6 ARE RELATED TO THE ADDITIONS CONFIRMED BY THE LD.CIT(A) IN RESPECT OF THE FOLLOWING EXPENSES: SL. NO. HEAD AMC AKIVIDU ITA NO. 233/VIZAG/2015 A.Y. 2003-04 A) SUPPLY OF FODDER SEEDS 47,29,000.00 B) GODOWNS FOR DROUGHT RELIEF 26,55,000.00 C) LINK ROADS & RURAL GODOWNS 48,51,459.00 D) PROCUREMENT OF SEEDS -- E) ASSISTANCE TO MITIGATE STRESS -- DURING THE APPEAL HEARING THE ASSESSEE FILED THE ADDITIONAL EVIDENCE RELATING TO THE GOS OF GOVERNMENT OF A.P/ THE ORDERS OF THE DIRECTOR MARKETING, GOVERNMENT OF A.P, AND THE DISTRICT COLLECTOR AND THE MAGISTRATE AS UNDER: ITA NOS.233 & 234 OF 2015 /VIZAG/2015 AKIVIDU 5 (I) ORDER DT. 19.09.2001 BY THE PRINCIPAL SECRETARY TO GOVT. OF ANDHRA PRADESH SANCTIONING THE WORK OF EXECUTION OF LINK ROADS BY AGRICULTURAL MARKETING COMMITTEES, PERMITTING THE AMC'S TO INCUR EXPENDITURE WHERE IN THE APPELLANT WAS ALLOTTED RS.56,26,000/- TO SPEND ON LINK ROADS. (II) CIRCULAR DT 20.09.2001 FROM THE OFFICE OF THE DIRECTOR OF MARKETING, GOVERNMENT OF ANDHRA PRADESH DIRECTING THE DISTRICT COLLECTORS TO SANCTION THE EXECUTION OF LINK ROADS. (III) LETTER DT 22.05.2002 FROM DISTRICT COLLECTOR AND MAGISTRATE, WEST GODAVARI TO THE SECRETARY OF AMC'S CERTIFYING THE UTILIZATION OF RS 28,13,000/- BY THE APPELLANT TOWARDS THE EXECUTION OF WORKS RELATED TO LINK ROADS. (IV) ORDER DT. 18.03.2003 FROM DIRECTOR OF MARKETING. GOVT OF ANDHRA PRADESH, DIRECTING THE AMCS TO RELEASE FUNDS FOR PAYMENT TO DIST COLLECTOR FOR SUPPLY OF FODDER SEEDS WHEREIN THE APPELLANT WAS ORDERED TO RELEASE RS.47,29,000/- FOR THE ABOVE PURPOSE. 7. THE ASSESSEE ALSO FILED PETITION FOR ADMISSION OF ADDITIONAL EVIDENCE STATING AS UNDER: 1. IN THE APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLOW THE EXEMPTION OF INCOME U/S 11 OF THE ACT. HOWEVER, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION OF RS.73,84,000/- OUT OF THE ABOVE AND DIRECTED THE ASSESSING OFFICER TO DISALLOW FURTHER SUM OF RS.48,51,459/- STATING THAT THE RELEVANT SANCTION LETTERS OF THE DIRECTOR, MARKETING OF GOVT OF ANDHRA PRADESH OR THE GO'S WERE NOT FURNISHED BY THE APPELLANT. THEREFORE, HE IS OF THE VIEW THAT THE EXPENDITURE CANNOT BE QUALIFIED AS APPLIED FOR CHARITABLE PURPOSE. 2. THE APPELLANT WAS UNDER THE BONA-FIDE BELIEF THAT PAYMENT IN RESPECT OF THE ABOVE EXPENDITURE HAVING BEEN MADE TO COLLECTOR AND COMMISSIONER AND DIRECTOR OF AGRICULTURE, GOVERNMENT OF AP , THE SAME WOULD BE CONSIDERED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AS EXPENDITURE INCURRED TOWARDS THE OBJECTIVES OF THE APPELLANT. HAD THE APPELLANT KNOWN IN ADVANCE THAT THE NON-FURNISHING OF A COPY OF THE ORDERS ISSUED BY THE DIRECTOR OF MARKETING, GOVT. OF ANDHRA PRADESH WOULD INVITE DISALLOWANCE OF EXPENDITURE THE APPELLANT WOULD HAVE CERTAINLY FURNISHED THE COPIES OF THE ORDERS. 3. THUS, THE FAILURE OF THE APPELLANT TO FILE THE COPIES OF THE ORDERS ISSUED BY THE GOVT. OF ANDHRA PRADESH DIRECTING THE APPELLANT TO MAKE PAYMENT TOWARDS CONSTRUCTION OF LINK ROADS AND RELEASE OF FUNDS FOR DROUGHT RELIEF IS DUE TO REASONS BEYOND ITS CONTROL AND THE FAILURE WAS ITA NOS.233 & 234 OF 2015 /VIZAG/2015 AKIVIDU 6 NEITHER INTENTIONAL NOR DELIBERATE. THEREFORE, THE APPELLANT PRAYS THE HON'BLE ITAT, VISAKHAPATNAM TO KINDLY ADMIT THE FOLLOWING DOCUMENTS AS ADDITIONAL EVIDENCE AND PASS APPROPRIATE ORDERS IN THE INTERESTS OF SUBSTANTIAL JUSTICE. (I) ORDER DT 19.09.2001 BY THE PRINCIPAL SECRETARY TO GOVT OF ANDHRA PRADESH SANCTIONING THE WORK OF EXECUTION OF LINK ROADS BY AGRICULTURAL MARKETING COMMITTEES, PERMITTING THE AMC'S TO INCUR EXPENDITURE WHERE IN THE APPELLANT WAS ALLOTTED RS.56,26,000/- TO SPEND ON LINK ROADS. (II) CIRCULAR DT 20.09.2001 FROM THE OFFICE OF THE DIRECTOR OF MARKETING, GOVERNMENT OF ANDHRA PRADESH DIRECTING THE DISTRICT COLLECTORS TO SANCTION THE EXECUTION OF LINK ROADS. (III) LETTER DT 22.05.20 02 FROM DISTRICT COLLECTOR AND MAGISTRATE, WEST GODAVARI TO THE SECRETARY OF AMC'S CERTIFYING THE UTILIZATION OF RS 28,13,000/- BY THE APPELLANT TOWARDS THE EXECUTION OF WORKS RELATED TO LINK ROADS. (IV) ORDER DT 18.03.2003 FROM DIRECTOR OF MARKETING, GOVT OF ANDHRA PRADESH, DIRECTING THE AMCS TO RELEASE FUNDS FOR PAYMENT TO DIST COLLECTOR FOR SUPPLY OF FODDER SEEDS WHEREIN THE APPELLANT WAS ORDERED TO RELEASE RS.47,29,000/- FOR THE ABOVE PURPOSE. 8. DURING THE APPEAL HEARING, THE LD. A.R. ARGUED THAT THE LD. CIT(A) CONFIRMED THE ADDITIONS FOR ASSESSEES FAILURE TO FURNISH THE COPIES OF THE SANCTION ORDERS OF THE DIRECTOR OF MARKETING / THE G.O. AND THE UTILIZATION CERTIFICATE FOR THE ABOVE MENTIONED EXPENSES. THE ASSESSEE COULD NOT EXPECT THE REQUIREMENT OF SUCH CERTIFICATES AT THE TIME OF APPEAL HEARING BEFORE THE FIRST APPELLATE AUTHORITY, HENCE IT COULD NOT SUBMIT THE LETTERS OF PRINCIPAL SECRETARY, DIRECTOR (MARKETING), DISTRICT COLLECTOR AND MAGISTRATE REFERRED ABOVE. THE LD.A.R ARGUED THAT THE EXPENSES WERE INCURRED FOR THE PURPOSE OF THE OBJECTIVES OF THE SOCIETY AND IN ACCORDANCE WITH THE SANCTION ORDERS FROM THE COMPETENT ITA NOS.233 & 234 OF 2015 /VIZAG/2015 AKIVIDU 7 AUTHORITIES I.E GOVERNMENT OF A.P AND THERE WAS NO DISPUTE WITH REGARD TO THE GENUINENESS OF EXPENDITURE, HENCE THE LD. COUNSEL REQUESTED FOR ADMISSION OF THE ADDITIONAL EVIDENCE. 9. ON THE OTHER HAND, THE LD. D.R. VEHEMENTLY OPPOSED FOR THE ADMISSION OF ADDITIONAL EVIDENCE. 10. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD.CIT(A) REJECTED THE CLAIM EXPENSES FOR WANT OF SANCTION ORDERS FROM THE COMPETENT AUTHORITIES. SINCE THE ASSESSEE HAS FURNISHED THE RELEVANT SANCTION ORDERS, WHICH ARE CRUCIAL FOR ALLOWING THE EXPENDITURE INCURRED FOR OBJECTIVES, WE ADMIT THE ADDITIONAL EVIDENCE. 11. THE ASSESSEE HAS FURNISHED THE ADDITIONAL EVIDENCES EVIDENCING THAT THE DIRECTOR (MARKETING), GOVERNMENT OF ANDHRA PRADESH HAS RELEASED A SUM OF 25.44 CFORES FOR SUPPLY OF FODDER OUT OF WHICH THE AMC, AKIVIDU, THE ASSESSEE WAS ALLOTTED 47.29 LAKHS. SIMILARLY, THE PRINCIPAL SECRETARY, GOVERNMENT OF ANDHRA PRADESH HAS ALLOTTED A SUM OF 56.56 LAKHS FOR TAKING UP LINK ROAD PROJECT, THE SECRETARY HAS GIVEN UTILIZATION CERTIFICATE FOR 28,13,000/- FOR LINK ROADS. THE ABOVE DOCUMENTS WERE NOT MADE AVAILABLE BEFORE THE LOWER AUTHORITIES FOR VERIFYING THE GENUINENESS AND ALLOWABILITY OF THE EXPENSES FOR CHARITABLE PURPOSE. HAVING ADMITTED THE ADDITIONAL EVIDENCE, WE ARE OF THE ITA NOS.233 & 234 OF 2015 /VIZAG/2015 AKIVIDU 8 CONSIDERED OPINION THAT THE CASE NEEDS TO BE REMITTED BACK TO THE FILE OF A.O. TO CONSIDER THE PROCEEDINGS OF THE PRINCIPAL SECRETARY, GOVERNMENT OF ANDHRA PRADESH DATED 19.1.2001, CIRCULAR OF DIRECTOR (MARKETING), GOVERNMENT OF ANDHRA PRADESH DATED 20.9.2011, DISTRICT COLLECTOR AND MAGISTRATE, W.G. DIST. LETTER DATED 22.5.2002 AND THE ORDER OF THE DIRECTOR (MARKETING), GOVERNMENT OF ANDHRA PRADESH DATED 18.3.2003 AND DECIDE THE ISSUE AFRESH ON MERITS. ACCORDINGLY, THE APPEAL OF THE ASSESSEE ON THE ADDITIONS OF RS.47.29 LACS RELATING TO THE FODDER,26.55 LACS RELATING TO DROUGHT RELIEF AND RS.48.51 LACS RELATING TO THE LINK ROADS IS REMITTED BACK TO THE FILE OF THE A.O., FOR FRESH CONSIDERATION. THE AO SHOULD GIVE SUFFICIENT OPPORTUNITY TO THE ASSESSE TO DEFEND ITS CASE. THE APPEAL OF THE ASSESSE ALLOWED FOR STATISTICAL PURPOSES. 12. GROUND NOS.7, 8 & 9 ARE RELATED TO THE ADDITION OF 73,625/- IN RESPECT OF GODOWN RENT AND 1,35,175/- IN RESPECT OF DIFFERENCE IN INVESTMENTS, WHICH WAS NOT PRESSED BY THE LD. A.R., HENCE THESE GROUNDS OF APPEAL ARE DISMISSED AS NOT PRESSED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.234/VIZAG/2015 (A.Y. 2004-05): 14. GROUND NOS.1 & 9 ARE GENERAL IN NATURE. GROUND NOS.2 TO 6 ARE RELATED TO THE ADDITIONS CONFIRMED BY THE LD.CIT(A) AS UNDER: ITA NOS.233 & 234 OF 2015 /VIZAG/2015 AKIVIDU 9 SL. NO. HEAD AMC AKIVIDU ITA NO. 234/VIZAG/2015 A.Y. 2004-05 A) LINK ROADS & RURAL GODOWNS 2,17,83,200.00 B) PROCUREMENT OF SEEDS 5,00,00,000.00 C) ASSISTANCE TO MITIGATE STRESS 2,00,00,000.00 THE FACTS OF THE CASE ARE IDENTICAL TO THE FACTS DISCUSSED IN THIS ORDER IN APPEAL NO. ITA NO.234/VIZAG/2015 FOR THE A.Y.2003-04.THE LD.CIT(A) CONFIRMED THE ADDITIONS FOR ASSESSEES FAILURE TO FURNISH THE SANCTION ORDERS FROM COMPETENT AUTHORITIES OF GOVERNMENT OF A.P/ THE ORDERS OF THE DIRECTOR MARKETING, GOVERNMENT OF A.P, AND THE DISTRICT COLLECTOR AND THE MAGISTRATE. THE LD.AR FILED ADDITIONAL EVIDENCE IN THE FORM OF THE COPIES OF SANCTION ORDERS FROM COMPETENT AUTHORITIES AS UNDER: (I) ORDER DT 21.06.20G3 OF THE DIRECTOR OF MARKETING. GOVT OF AP FOR RELEASE OF FUNDS FOR PROCUREMENT OF SEEDS IN FAVOUR OF COMMISSIONER AND DIRECTOR OF AGRICULTURE, HYDERABAD. (II) ORDER DT 28.06.2003 OF DIRECTOR OF MARKETING, GOVT OF AP DIRECTING THE AMC'S TO RELEASE FUNDS FOR DROUGHT RELIEF MEASURES IN FAVOUR OF COMMISSIONER AND REGISTRAR OF COOPERATIVE SOCIETIES, HYDERABAD . THE LD. A.R REQUESTED FOR ADMISSION OF THE ADDITIONAL EVIDENCE STATING AS UNDER: (I) IN THE APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLOW THE EXEMPTION OF INCOME U/S 11 OF THE ACT. HOWEVER, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION TO THE EXTENT OF RS.9,17,83,200/- OUT OF THE ABOVE SAID AMOUNT STATING THAT THE RELEVANT SANCTION LETTERS OF THE DIRECTOR, MARKETING OF GOVT OF ANDHRA PRADESH OR THE GO'S WERE NOT FURNISHED BY THE APPELLANT. THEREFORE, HE IS OF THE VIEW THAT THE EXPENDITURE CANNOT BE ITA NOS.233 & 234 OF 2015 /VIZAG/2015 AKIVIDU 10 QUALIFIED AS APPLIED FOR CHARITABLE PURPOSE. ACCORDINGLY, HE HELD THE ABOVE AMOUNT OF RS.9,17,83,200/- ( RS.28,41,200/- PAID TO DIST COLLECTOR, W. G. DST FOR RURAL LINK ROADS + RS.1,89,42,000/- PAID TO DIST COLLECTOR, CUDDAPAH FOR LINK ROADS + 5,00,00,000/- PAID TO COMMISSIONER AND DIRECTOR OF AGRICULTURE, HYDERABAD + RS.2,00,00,000/- PAID TO COMMISSIONER AND REGISTRAR OF COOPERATIVE SOCIETIES) AS NOT ELIGIBLE FOR EXEMPTION. (II) THE APPELLANT WAS UNDER THE BONA-FIDE BELIEF THAT THE ABOVE SAID PAYMENTS HAVING BEEN PAID FOR SPECIFIED PURPOSES AS PER THE GOVERNMENT ORDERS WOULD BE CONSIDERED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AS EXPENDITURE INCURRED TOWARDS THE OBJECTIVES OF THE APPELLANT. HAD THE APPELLANT KNOWN IN 7' ADVANCE THAT THE NON-FURNISHING OF A COPY OF THE ORDERS ISSUED BY THE DIRECTOR OF MARKETING, GOVT. OF ANDHRA PRADESH WOULD INVITE DISALLOWANCE OF EXPENDITURE THE APPELLANT WOULD HAVE CERTAINLY FURNISHED THE COPIES OF THE ORDERS. (III) THUS, THE FAILURE OF THE APPELLANT TO FILE THE COPIES OF THE ORDERS ISSUED BY THE GOVT. OF ANDHRA PRADESH DIRECTING THE APPELLANT TO MAKE PAYMENT TOWARDS CONSTRUCTION OF LINK ROADS AND RELEASE OF FUNDS FOR PROCUREMENT OF SEEDS, MITIGATION OF DISTRESS IS DUE TO REASONS BEYOND ITS CONTROL AND THE FAILURE WAS NEITHER INTENTIONAL NOR DELIBERATE. THEREFORE, THE APPELLANT PRAYS THE HON'BLE ITAT, VISAKHAPATNAM TO KINDLY ADMIT THE FOLLOWING DOCUMENTS AS ADDITIONAL EVIDENCE AND PASS APPROPRIATE ORDERS IN THE INTERESTS OF SUBSTANTIAL JUSTICE.. 15. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY THE LD. A.R AND THE LD. DR BOTH ON ADDITIONAL EVIDENCE AS WELL AS THE MERITS OF THE CASE. FACTS OF THE CASE ARE IDENTICAL TO THAT OF ITA NO.233/VIZAG/2015 IN THIS ORDER. WE ARE OF THE CONSIDERED OPINION THAT IN THE INTEREST OF JUSTICE THE ADDITIONAL EVIDENCE REQUIRED TO BE ADMITTED. ACCORDINGLY, WE ADMIT THE ADDITIONAL EVIDENCE AND REMIT THE MATTER BACK TO THE FILE OF THE AO TO CONSIDER THE ISSUE AFRESH AFTER VERIFICATION OF THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSE. THE AO SHOULD GIVE REASONABLE OPPORTUNITY TO ITA NOS.233 & 234 OF 2015 /VIZAG/2015 AKIVIDU 11 THE ASSESSE BEFORE COMPLETING THE ASSESSMENT. THE APPEAL OF THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 16. GROUND NOS.6 TO 8 ARE NOT PRESSED BY THE LD. A.R. THEREFORE GROUND NO.6 TO 8 ARE DISMISSED AS NOT PRESSED. 17. THE APPEAL OF THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20 TH DEC17. SD/- SD/- ( . . ) ( . [ ) (D.S. SUNDER SINGH) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER /VISAKHAPATNAM: /DATED : 20/12/2017 VG/SPS /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANTS AGRICULTURAL MARKET COMMITTEE, AKIVIDU (W.G. DIST.) 2. / THE RESPONDENT ITO, WARD-2, BHIMAVARAM 3. / THE CIT, RAJAHMUNDRY 3. ( ) / THE CIT (A), RAJAHMUNDRY 4. , , / DR, ITAT, VISAKHAPATNAM 5 . [ / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM