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

ITA 250/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1414 (ITAT-INDORE)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-11-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 18-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V K KRAN
• Assessee Lawyers: S K AGRAWAL
• Keywords: Capital asset; Revised return; Revenue expenditure
• Section: 260A; 12A; 11

Judgement Text

PAGE 1 OF 6 - I.T.A.NO. 250/IND/2009 KUMS KHATEGAON, DEWAS II IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : AAALK0250E I.T.A.NO. 250/IND/2009 A.Y. : 2005-06 KRISHI UPAJ MANDI SAMITI, INCOME-TAX OFFICER, KHATEGAON VS 2(1), DISTRICT DEWAS UJJAIN APPELLANT RESPONDENT APPELLANT BY : SHRI S.K. AGRAWAL, C. A. RESPONDENT BY : SMT.V. K. KRAN, SR. DR DATE OF HEARING : 24/11/2009 O R D E R PER V.K. GUPTA, A.M. THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF ORD ER OF THE LD. CIT(A) DATED 09.02.2009, FOR THE ASSESSMENT YEAR 20 05-06. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. GROUND NO.1 READS AS UNDER :- THAT THE LD. CIT(A) HAS ERRED IN REJECTING REVISED RETURN FILED BY THE ASSESSEE FOR CLAIMING THE EXEMPTION U/ S 11 OF THE PAGE 2 OF 6 - I.T.A.NO. 250/IND/2009 KUMS KHATEGAON, DEWAS II INCOME-TAX ACT, 1961, IN VIEW OF THE REGISTRATION U /S 12A/12AA RECEIVED BY THE ASSESSEE ON 23.12.2006. 4. THE FACTS, IN BRIEF, ARE THAT INSPITE OF ORDER OF T HE TRIBUNAL DIRECTING THE LD. CIT(A) TO GRANT REGISTRATION TO T HE ASSESSEE UNDER SECTION 12A BEING COMPLIED WITH BY THE LD. CIT, TH E A.O. HAS HELD THAT THE ASSESSEE SAMITI WAS NOT ENTITLED FOR EXEMPTION U/S 11 IN VIEW OF THE FACT THAT THE DEPARTMENT HAD NOT ACCEPTED THE SAID DECISION OF THE TRIBUNAL AND APPEAL HAD BEEN FILED BEFORE THE HON'B LE HIGH COURT U/S 260A AND HAD BEEN ADMITTED ALSO. ON A QUERY FROM US , THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT PRODUCE THE C OPY OF STAY, IF ANY, GRANTED BY THE HON'BLE HIGH COURT AGAINST THE SAID ORDER OF THE TRIBUNAL. THUS, IN OUR VIEW, THE ACTION OF THE A.O., WHICH HA S ALSO BEEN CONFIRMED BY THE CIT(A) IS NOT CORRECT IN LAW, AS AT THE RELE VANT POINT OF TIME, THE ORDER OF THE TRIBUNAL IS BINDING ON BOTH SUCH AUTHO RITIES. ACCORDINGLY, WE HOLD THAT THE ASSESSEES INCOME SHOULD BE COMPUTED ON THE BASIS THAT THE ASSESSEE IS ENTITLED TO EXEMPTION U/S 11OF THE ACT. THUS, GROUND NO.1 OF THE ASSESSEES APPEAL IS ALLOWED. 5. GROUND NOS. 2 TO 5 READ AS UNDER :- 2) THAT THE LD. CIT(A) HAS ERRED IN DISALLOWING OF RS. 21,55,675/- AS KISAN SADAK NIDHI EXP. ON THE FACTS AND CIRCUMSTANCES OF THE CASE. PAGE 3 OF 6 - I.T.A.NO. 250/IND/2009 KUMS KHATEGAON, DEWAS II 3) THAT THE LD. CIT(A) HAS ERRED IN DISALLOWING OF RS. 3,80,411/- AS KRISHI ANUSANDHAN NIDHI EXP. ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4) THAT THE LD. CIT(A) HAS ERRED IN DISALLOWING OF RS. 6,33,722/- AS BOARD SHULK EXP. ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5) THAT THE LD. CIT(A) HAS ERRED IN DISALLOWING OF RS. 7,77,662/- AS ARAKSHIT NIDHI EXP. ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. THE FACTS, IN BRIEF, ARE THAT THESE EXPENSES WERE D ISALLOWED MAINLY FOR THE REASON THAT DRAFTS FOR SUCH PAYMENTS HAD ACTUALLY BEEN PREPARED AND DELIVERED SUBSEQUENT TO THE CLOSURE OF THE RELEVANT FINANCIAL YEAR AND, THEREFORE, AS PER CASH SYSTEM OF ACCOUNTI NG, WHICH WAS FOLLOWED BY THE ASSESSEE, THE SAME COULD NOT BE ALL OWED AS EXPENDITURE OF THIS YEAR. THE A.O. ALSO HELD THAT THE ASSESSEE HAD WITHDRAWN THE EQUIVALENT AMOUNT IN VIEW OF THE PRACTICE FOLLOWED BY VARIOUS GOVERNMENT BODIES/AUTHORITIES, SO AS TO CONSUME THE FUNDS BEFORE CLOSURE OF THE FINANCIAL YEAR AND IT WAS DONE AS PER THE AP PROVAL OF THE CONCERNED COMPETENT AUTHORITIES AND SUBSEQUENTLY PAYMENT WAS ALSO MADE ACCORDINGLY. THE A.O., HOWEVER, HELD THAT SUCH FACT S RESULTED INTO A PROVISION IN THE ACCOUNTS, WHICH COULD NOT BE EQUAT ED WITH THE ACTUAL PAGE 4 OF 6 - I.T.A.NO. 250/IND/2009 KUMS KHATEGAON, DEWAS II PAYMENT. THE LD. CIT(A) ALSO CONFIRMED THIS ACTION OF THE A.O. THE LEARNED COUNSEL FOR THE ASSESSEE, IN THE COURSE OF HEARING, HAD SUBMITTED THAT CHEQUES WERE ACTUALLY DELIVERED BEFORE THE CLO SURE OF THE FINANCIAL YEAR AND ON THAT BASIS, THE HEARING WAS CONCLUDED. HOWEVER, WHEN THE FACTS, AS STATED ABOVE, ARE TAKEN INTO CONSIDERATIO N, IT IS ABUNDANTLY CLEAR THAT IT IS NOT A CASE OF DELIVERY OF CHEQUES PRIOR TO THE END OF THE FINANCIAL YEAR AND REALIZATION THEREOF SUBSEQUENTLY. HENCE, T HIS CANNOT BE TREATED AS PAYMENT MADE BY THE ASSESSEE IN THE YEAR UNDER CONS IDERATION. ACCORDINGLY, ALL THESE GROUNDS OF THE ASSESSEE ARE DISMISSED. 7. GROUND NO. 6 READS AS UNDER :- 6. THAT THE LD. CIT(A) HAS ERRED IN DISALLOWING OF RS. 37,030/- AS ADVERTISEMENT EXP. ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE FACTS, IN BRIEF, ARE THAT THE A.O. FOUND THAT T HE ASSESSEE HAD CLAIMED VIGYAPAN EXPENSES, WHICH COMPRISED OF ADVER TISEMENT PUBLISHED FOR CONSTRUCTION WORK TO BE CARRIED OUT BY THE ASSE SSEE OR ACQUISITION OF FIXED ASSETS AND RS. 5,000/- DID NOT PERTAIN TO BUS INESS. ACCORDINGLY, HE DISALLOWED THE IMPUGNED SUM. ON APPEAL, THE LD. CIT (A) ALSO CONFIRMED THE ACTION OF THE A.O. THE ASSESSEE, BEING AGGRIEVE D, IS IN APPEAL BEFORE US. PAGE 5 OF 6 - I.T.A.NO. 250/IND/2009 KUMS KHATEGAON, DEWAS II 9. THE LEARNED COUNSEL FOR THE ASSESSEE NARRATED THE F ACTS AND CONTENDED THAT THESE EXPENSES WERE OF ADMINISTRATIV E NATURE, HENCE, ALLOWABLE AS REVENUE EXPENDITURE. THE LD. DEPARTMEN TAL REPRESENTATIVE, ON THE OTHER HAND PLACED, STRONG RELIANCE ON THE OR DER OF THE LD. CIT(A). 10. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. IT IS NOTED THAT THESE EXPENSES HAVE BEEN INCURRED BY THE ASSESSEE IN CONNECTION WITH CALLING OF TENDERS FOR VARIOUS RELA TED OBJECTS OF THE SOCIETY. THUS, THESE ARE NOT DIRECTLY CONNECTED WIT H THE ACQUISITION OF ASSETS/CONSTRUCTION OF CAPITAL ASSETS AND, THEREFOR E, THESE EXPENSES, IN OUR OPINION, ARE ALLOWABLE AS REVENUE EXPENDITURE. WE A LSO FIND THAT THE EXPENDITURE OF RS. 5,000/- HAS ALSO BEEN INCURRED B Y THE ASSESSEE SOCIETY, WHEREIN EXPENDITURE IS INCURRED AFTER DUE APPROVAL OR PROCEDURE AND BOTH THE REVENUE AUTHORITIES HAVE ALSO NOT GIVEN ANY SPE CIFIC DETAILS OF DEFECTS. HENCE, THE SAME IS ALSO ALLOWABLE. 11. ACCORDINGLY, WE REVERSE THE FINDINGS OF THE LD. CI T(A) IN THIS REGARD. 12. GROUND NO. 7 RELATING TO THE EXPENSES INCURRED BY T HE ASSESSEE ON MURTI STHAPANA EXP. WAS NOT PRESSED, HENCE, DISM ISSED AS NOT PRESSED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS PARTLY ALLOWED. PAGE 6 OF 6 - I.T.A.NO. 250/IND/2009 KUMS KHATEGAON, DEWAS II THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2009. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :27 TH NOVEMBER, 2009. CPU* 2526D26