The Sabarkantha Dist. Co. Op. Purchase and Sale Union Ltd., Sabarkantha V. The Income Tax Officer, S.K. Ward-3, Sabarkantha

ITA 2486/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8591 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 03-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR VARMA
• Section: 143(3); 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) ITA. NO: 2486/AHD/2016 (ASSESSMENT YEAR: 2010-11) THE SABARKANTHA DISTRICT CO.OP. PURCHASE AND SALE UNION LTD., NEAR OLD VEGETABLE MARKET, NEAR RAILWAY STATION, HIMATNAGAR, DIST: SABARKANTHA V/S INCOME TAX OFFICER, SK WARD-3, SABARKANTHA (APPELLANT) (RESPONDENT) PAN: AAAAT0524H APPELLANT BY : SHRI BHADRESH GANDHAKWALA , AR RESPONDENT BY : SHRI SUMIT KUMAR VARMA SR. D .R. ( )/ ORDER DATE OF HEARING : 05 -04-201 8 DATE OF PRONOUNCEMENT : 09 -04-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)-2, AHMEDABAD DATED 23.08.2016 PERTAINING TO A.Y. 2010- 11. ITA NO. 2486 /AHD/2016 . A.Y. 2010-1 1 2 2. THE ASSESSEE HAS RAISED FOUR SUBSTANTIVE GROUNDS OF APPEAL: (1) THE LEARNED CIT(A) HAS ERRED IN DISALLOWING FO LLOWING AMOUNT AS REPRESENTING THE EXPENDITURE INCURRED IN EARNING TH E INCOME AS IN MUCH AS THE ASSESSEE HAS NEVER INCURRED SUCH EXPENDITURE AND TH AT THE AO HAS ALSO NOT DISALLOWED THE SUCH EXPENDITURE AS PER THE ASSESSME NT ORDER: OUT OF GODOWN RENT UNDER SECTION 80P(2)(E) RS. 1,50,000 OUT OF DIVIDEND INCOME UNDER SECTION 80 P(2)(D) RS. 1,00,000 (2) THE LEARNED CIT(A) HAS ERRED THAT THE NET COM MISSION INCOME OF RS. 4,57,598 IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)( IV) ON THE GROUND THAT THE ASSESSEE HAS NOT CARRIED ON ACTIVITY OF PURCHASE AN D SALE IN AS MUCH AS THE EARNING OF COMMISSION REPRESENTS THE BOOKING OF THE ORDERS FROM THE MEMBERS AS PER CREDIT NOTE AND THAT SUCH COMMISSION IS ONLY ON ACCOUNT OF PURCHASES AND SALE WITH THE MEMBERS. (3) THE LEARNED CIT(A) OUGHT TO HAVE ISSUED THE NO TICE FOR ENHANCEMENT SINCE THE AO HAS NOT DISALLOWED THE EXPENSES ON ACCOUNT OF GO DOWN RENT AND DIVIDEND AND THAT THE AO HAS NOT HELD THAT THE COMMISSION INCOME IS NOT OUT OF PURCHASE AND SALE ACTIVITIES. (4) THE INCOME ELIGIBLE FOR DEDUCTION UNDER SECT ION SOP IS RS. 44,82,232 AS PER STATEMENT OF INCOME AND THAT EVEN IF THE DISALLOWAN CE OUT OF GODOWN RENT AND DIVIDEND INCOME AND TREATING THE COMMISSION AS INCO ME IS CONSIDERED THAN TOO THE AMOUNT ELIGIBLE FOR DEDUCTION WILL BE REDUCED B UT IT WILL NOT ADD TO THE TOTAL INCOME AS WORKED OUT AS UNDER: INCOME ELIGIBLE FOR DEDUCTION RS. 44,82,232 LESS: COMMISSION RS. 4,57,598 RS. 40,24,634 LESS: EXPENSES RELATING TO GODOWN RENT 1,50,000 EXPENSES RELATING TO DIVIDED 1,00,000 RS.2,50,00 0 INCOME ELIGIBLE FOR DEDUCTION EVEN AFTER CONSIDERIN G THE DISALLOWANCE AND TREATING THE COMMISSION AS INCOME AS AGAINST TOTAL INCOME OF RS. 21,20,134 R S. 37,74,634 3. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSE E STATED THAT THE IMPUGNED ASSESSMENT ORDER IS FRAMED U/S. 143(3) OF THE ACT R .W.S. 263 OF THE ACT. IT IS THE SAY OF THE LD. COUNSEL THAT THE ORDER FRAMED U/S. 2 63 OF THE ACT WAS CHALLENGED ITA NO. 2486 /AHD/2016 . A.Y. 2010-1 1 3 BEFORE THE TRIBUNAL AND THE TRIBUNAL HAS QUASHED TH E ORDER OF THE LD. CIT FRAMED U/S. 263 OF THE ACT. 4. WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL. THE TRIBUNAL IN ITA NO. 676/AHD/2015 HAS QUASHED THE ORDER U/S. 263 OF THE ACT AND THEREFORE THE IMPUGNED ASSESSMENT ORDER FRAMED PURSUANT TO DIRECT IONS OF THE LD. CIT(A) BECOMES NON-EST THEREBY MAKING THE ORDER OF THE FIR ST APPELLATE AUTHORITY OTIOSE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 09- 04- 20 18 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 09/04/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD