The Krishi Upaj Mandi Samiti, Mhow V. The ACIT 5 (1),

ITA 293/IND/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1451 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-11-2009
• Assessment Year: misc
• Appeal Filed On: 04-07-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V K KARAN
• Keywords: Depreciation; Revenue expenditure
• Section: 37

Judgement Text

PAGE 1 OF 7 I.T.A.NOS. 291, 292,293 & 294/IND/08 K UMS,ANJAD AND MHOW IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : AAAAK4300N I.T.A.NO.291 & 292/IND/2008 A.YS. : 2004-05 & 2005-06 KRISHI UPAJ MANDI SAMITI, DY. CIT, ANJAD VS KHANDWA APPELLANT RESPONDENT PAN NO. : AAFFK5074P I.T.A.NO.293 & 294/IND/2008 A.YS. : 2004-05 & 2005-06 KRISHI UPAJ MANDI SAMITI, ACIT, MHOW VS 5(1), INDORE APPELLANT RESPONDENT APPELLANTS BY : SHRI PRAKASH JAIN, C.A. RESPONDENT BY : SHRI V.K.KARAN, SR. DR DATE OF HEARING : 11/11/2009 O R D E R PER V.K. GUPTA, A.M. ALL THESE FOUR APPEALS HAVE BEEN FILED BY THE TWO D IFFERENT ASSESSEES AND INVOLVE COMMON ISSUES, HENCE, THESE W ERE HEARD TOGETHER PAGE 2 OF 7 I.T.A.NOS. 291, 292,293 & 294/IND/08 K UMS,ANJAD AND MHOW AND THESE ARE BEING DISPOSED OF BY THIS CONSOLIDATE D ORDER FOR THE SAKE OF CONVENIENCE. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. THE ISSUE OF ALLOWANCE OF CONTRIBUTION BY THE ASSES SEE TO RESERVE FUNDS BY SENDING THE SAME TO THE CONTROLLIN G HEAD OFFICE IS INVOLVED IN GROUND NO. 1 IN I.T.A.NOS. 291 & 292/IN D/2008 AND GROUND NOS. 5 & 4 IN I.T.A.NOS. 293 & 294/IND/2008 RESPECT IVELY, EXCEPT THE QUANTUM BEING DIFFERENT. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE WAS TO BE RESTORED BACK TO THE FILE OF A.O. IN VIEW OF THE ORDER OF THE TRIBUNAL IN THE CASE OF KRISHI UPAJ MANDI SAMITI, B URHANPUR VS. ITO , AS REPORTED IN 12 ITJ 12 AND REFERRED TO PARA 2 AT PAG E 24 OF THE REPORT. THE LD. DEPARTMENTAL REPRESENTATIVE ALSO AGREED. WE FIN D THAT THE TRIBUNAL IN THE SAID ORDER HAS RESTORED THE ISSUE FOR RECONSIDE RATION AT THE LEVEL OF THE A.O. FOR THE REASON THAT RULE 7(1) OF M.P. KRISHI U PAJ MANDI (MANDI NIDHI & ACCOUNT) RULES, 1980, HAD NOT BEEN TAKEN IN TO CONSIDERATION. THE TRIBUNAL ALSO HELD THAT THE REVENUE AUTHORITIES HAD NOT GIVEN ANY FINDING ON THE ASPECT THAT THE ASSESSEE HAD CLAIMED ANY EXPENDITURE ACTUALLY INCURRED IN THE YEAR UNDER CONSIDERATION, WHICH HAD BEEN CLAIMED ON PROVISION BASIS IN THAT YEAR. WE, ACCORDINGLY, R ESTORE THIS ISSUE TO THE PAGE 3 OF 7 I.T.A.NOS. 291, 292,293 & 294/IND/08 K UMS,ANJAD AND MHOW FILE OF A.O. ON THE SIMILAR LINES. IT IS NEEDLESS T O MENTION THAT THE A.O. SHALL GIVE AN ADEQUATE OPPORTUNITY OF HEARING TO TH E ASSESSEE. THUS, THIS GROUND IN ALL THE ABOVE APPEALS STANDS ALLOWED FOR STATISTICAL PURPOSES FOR BOTH THE YEARS UNDER CONSIDERATION. 5. IN GROUND NO.4 OF I.T.A.NOS. 291 & 292/IND/2008 AND GROUND NO. 2 OF I.T.A.NOS. 293 & 294/IND/2008 THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE REVENUE AUTHORITIES IN DISALLOWING THE CONTRIBUTION MADE BY THE ASSESSEE AS A PART OF ITS STATUTORY OBLIGATI ONS UNDER RULE 4 OF M.P. KRISHI UPAJ MANDI (RAJYA VIPNAN VIKAS NIDHI) RULES, 2000. THE LEARNED COUNSEL SUBMITTED THAT THIS ISSUE WAS COVER ED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE CA SE CITED HEREINBEFORE AND REFERRED TO PARA 15 AT PAGE 26 OF THE REPORT. 6. THE LD. DEPARTMENTAL REPRESENTATIVE ALSO AGREED. 7. WE FIND THAT THE TRIBUNAL FOLLOWING THE DECISION OF I.T.A.T., JABALPUR BENCH IN THE CASE OF KRISHI UPAJ MANDI SAM ITI AND OTHERS IN INO 280/JAB/2006 ORDER DATED 12.10.2007 HELD THAT THIS EXPENDITURE WAS ALLOWABLE U/S 37 AS REVENUE EXPENDITURE. FOLLOWING THE SAME, WE ALLOW BOTH THESE GROUNDS OF THE ASSESSEE AND DIRECT THE A .O. TO GRANT DEDUCTION OF THE AMOUNT CONTRIBUTED BY THE ASSESSEE TOWARDS K RISHI ANUSANDHAN NIDHI. THUS, GROUND NO. 4 AND GROUND NO. 2 IN I.T.A .NOS. 291 & PAGE 4 OF 7 I.T.A.NOS. 291, 292,293 & 294/IND/08 K UMS,ANJAD AND MHOW 292/IND/2008 AND I.T.A.NOS. 293 & 294/IND/2008 RESP ECTIVELY IN THE ASSESSMENT YEARS UNDER APPEALS STAND ALLOWED. 8. IN GROUND NO.3 OF THE APPEAL IN I.T.A.NOS. 291, 292 /IND02008 AND 292 & 293/IND/2008 THE ASSESSMENT YEARS UNDER APPEAL, THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LD. CIT(A) IN UPHOLDING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOU NT OF CONTRIBUTION MADE BY THE ASSESSEE TO ITS HEAD OFFICE FOR CONSTRU CTION OF RURAL ROAD AND CREATION OF ANOTHER INFRASTRUCTURE AS PER RULE 7(2) OF M.P. KRISHI UPAJ MANDI (RAJYA VIPNAN VIKAS NIDHI) RULES, 2000. THE L EARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE WAS ALSO COV ERED IN FAVOUR OF THE ASSESSEE AND REFERRED TO PARA 16 AND 38 OF THE IMPU GNED ORDER OF THE TRIBUNAL AT PAGES 37 TO 39 OF THE REPORT. 9. THE LD. DEPARTMENTAL REPRESENTATIVE ALSO AGREED. 10. WE FIND IN PARA 16 AT PAGE 27, THE TRIBUNAL HAS HEL D THAT THE IMPUGNED AMOUNT, WHICH WAS DISALLOWED BY THE REVEN UE AUTHORITIES BEING OF CAPITAL NATURE WAS ALLOWABLE AS REVENUE EX PENDITURE FOR THE REASON THAT SUCH CONTRIBUTION HAD BEEN MADE AS PER THE PROVISIONS OF RELEVANT REGULATIONS AND IT WAS NOT IN THE NATURE O F APPLICATION OF INCOME. WE ,ALSO FOLLOWING THE SAME, ACCEPT THESE GROUNDS O F THE ASSESSEE IN ALL THE ASSESSMENT YEARS UNDER APPEALS. PAGE 5 OF 7 I.T.A.NOS. 291, 292,293 & 294/IND/08 K UMS,ANJAD AND MHOW 11. IN GROUND NO. 4 OF I.T.A.NO. 293/IND/09, THE ASSESS EE IS AGGRIEVED BY THE DECISION OF LD. CIT(A) IN DISALLO WING DEPRECIATION OF RS. 8,27,213/-. 12. THE LEARNED COUNSEL FOR THE ASSESSEE FAIRLY SUBMITT ED THAT THIS ISSUE WAS COVERED AGAINST THE ASSESSEE BY THE FINDI NGS OF THE TRIBUNAL IN THE DECISION CITED HEREINBEFORE AND REFERRED TO PAR A NO.20 AT PAGE 28, WHICH HAS BEEN CONCLUDED AT PAGE 36, THE TRIBUNAL F OLLOWING ITS DECISION IN THE CASE OF KRISHI UPAJ MANDI SAMITI AS REPORTED IN 12 ITJ 1, HAD HELD THAT THE DEPRECIATION WAS NOT ALLOWABLE ON THE BASI S OF ACTUAL COST INCURRED BY THE ASSESSEE WITHOUT DEDUCTING THE DEPR ECIATION, WHICH WAS NOT CLAIMED AND ALLOWED IN EARLIER YEARS. RESPECTFU LLY FOLLOWING THE SAME, WE ALSO HOLD SO. THUS, GROUND NO.4 STANDS DIS MISSED. 13. IN GROUND NO. 6 OF I.T.A.NO. 293/IND/08 AND GROUND NO.5 OF I.T.A.NO. 294/IND/08, THE ISSUE INVOLVED IS REGARDI NG ALLOWABILITY OF PENSION ACTUALLY DISTRIBUTED BY THE ASSESSEE IN THE YEAR UNDER CONSIDERATION , WHICH HAD NOT BEEN CLAIMED AS DEDUC TION EARLIER. 14. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS ISSUE WAS TO BE RESTORED BACK TO THE FILE OF A.O. IN VIEW OF THE DECISION OF THE TRIBUNAL CITED HEREIN BEFORE AND REFERRED TO PARA 9 AT PAGE 24, WHEREIN THE TRIBUNAL HAD RESTORED THIS ISSUE FOR VERIFICATION O F FACTS BY THE ASSESSING PAGE 6 OF 7 I.T.A.NOS. 291, 292,293 & 294/IND/08 K UMS,ANJAD AND MHOW OFFICER AND DECISION THEREON THEREAFTER AFTER GIVIN G AN ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 15. WE ALSO RESTORE THIS ISSUE TO THE FILE OF A.O. ON S IMILAR LINES. THUS, THE RELEVANT GROUNDS OF BOTH THESE APPEALS ST AND ALLOWED FOR STATISTICAL PURPOSES. 16. IN GROUND NO. 7 OF I.T.A.NO. 293/IND/2008 AND GROUN D NO. 6 OF I.T.A.NO. 294/IND/08, THE ISSUE INVOLVED IS REGARDI NG HEAD OF ASSESSABILITY OF RENTAL INCOME. 17. THE LEARNED COUNSEL FOR THE ASSESSEE FAIRLY ADMITTE D THAT THIS ISSUE WAS COVERED AGAINST THE ASSESSEE BY THE DECI SION OF THE TRIBUNAL CITED HEREINBEFORE AND REFERRED TO PARA 25 AT PAGE 38 OF THE REPORT, WHEREIN THE TRIBUNAL HAD HELD THAT INCOME FROM PROP ERTIES LET OUT BY THE ASSESSEE PURELY FOR THE PURPOSE OF EARNING RENT AND HAD NOT BEEN EXPLOITED FOR COMMERCIAL PURPOSE. HENCE, SUCH INCOME WAS LIAB LE TO BE ASSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. RESPECTFULLY FOLLOWING THIS RATIO, WE ALSO HOLD SO. THUS, GROUND NO. 7 OF I.T.A .NO. 293 AND GROUND NO.6 OF I.T.A.NO. 294/IND/2008 STAND DISMISSED. 18. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSE E ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. PAGE 7 OF 7 I.T.A.NOS. 291, 292,293 & 294/IND/08 K UMS,ANJAD AND MHOW THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON ______NOVEMBER, 2009. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :18 TH NOVEMBER, 2009. CPU* 1117D