THE KRISHI UPAJ MANDI, V. THE A C I T 5 (1),

ITA 320/IND/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1437 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 16 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: misc
• Appeal Filed On: 11-07-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V K KARAN
• Assessee Lawyers: NITIN AGARWAL
• Keywords: Gift; Depreciation
• Section: 271(1)(c); 12AA; 11

Judgement Text

PAGE 1 OF 9 I.T.A.NOS. 319 TO 321/IND/2008 KUMS, SANAWAD IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : AAALK-0248E I.T.A.NO.319 TO 321/IND/2008 A.YS. : 2003-04 TO 2005-06 KRISHI UPAJ MANDI SAMITI, ASSISTANT CIT, SANAWAD VS 5(1), INDORE. APPELLANT RESPONDENT APPELLANT BY : SHRI NITIN AGARWAL, C. A. RESPONDENT BY : SHRI V.K.KARAN, SR. DR DATE OF HEARING : 24/11/2009 O R D E R PER V.K. GUPTA, A.M. THESE APPEALS BELONG TO THE SAME ASSESSEE AND INVO LVED COMMON ISSUES AND HEARD TOGETHER AND THESE ARE DISPOSED BY THIS CONSOLIDATED ORDER. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. FIRST, WE SHALL TAKE UP ASSESSEES APPEAL IN I.T.A. NO. 319/IND/2008. 4. THE GROUNDS RAISED IN THIS APPEAL READ AS UNDER :- PAGE 2 OF 9 I.T.A.NOS. 319 TO 321/IND/2008 KUMS, SANAWAD 1. THE LD. CIT(A) HAS ERRED IN NOT ALLOWING THE ADDITI ONAL GROUND OF APPLICATION OF SECTION 11-13 ON THE GROUN D THAT THE HON'BLE TRIBUNAL HAS ALLOWED REGISTRATION U/S 1 2A/12AA. 2. SINCE THE REGISTRATION WAS GRANTED BY THE HON'BLE TRIBUNAL, THE SAMITI IS ENTITLED TO ALL BENEFITS GIVEN U/S 11 -13 AND THE LD. CIT(A) WAS WRONG IN HOLDING THAT A FRESH CLAIM CANNOT BE ENTERTAINED AND CANNOT SEEK EXEMPTION. 3. THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE INCOME OF THE SAMITI IS NOT ENTITLED TO EXEMPTION U/S 11 ON THE G ROUND THAT THE INCOME IS NOT DERIVED FORM THE PROPERTY HELD UN DER THE TRUST. 4. THE LD. CIT(A) WAS TOTALLY WRONG IN NOT FOLLOWING T HE ORDER OF THE TRIBUNAL. 5. THE LD. CIT(A) HAS ERRED IN NOT ALLOWING THE DEPREC IATION AS CLAIMED BY THE ASSESSEE AND DIRECTING THE LD. A.O. TO ALLOW DEPRECIATION ON WDV AS AT 01.04.2003. 6. THE LD. CIT(A) HAS ERRED IN ENHANCING THE INCOME BY RS. 10,49,843/-, BEING CONTRIBUTION TO MANDI BOARD SHUL K AS NOT ALLOWABLE U/S 36(1)(XII). PAGE 3 OF 9 I.T.A.NOS. 319 TO 321/IND/2008 KUMS, SANAWAD 7. THE LD. CIT(A) HAS ERRED IN ENHANCING THE INCOME BY RS. 53,09,784/- BEING CONTRIBUTION TO KISAN SADAK NIDHI AS NOT ALLOWABLE U/S 36(1)(XII). 8. THE LD. CIT(A) HAS ERRED IN ENHANCING THE INCOME BY RS. 9,37,000/-, BEING CONTRIBUTION TO ARIKSHIT NIDHI AS NOT ALLOWABLE U/S 36(1)(XII). 9. THE LD. CIT(A) HAS ERRED IN ENHANCING THE INCOME BY RS. 1,66,824/- BEING CONTRIBUTION TO ARIKSHIT NIDHI AS NOT ALLOWABLE U/S 36(1)(XII). 10. THE LD. CIT(A) HAS ERRED IN INITIATING THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. 5. THE LEARNED COUNSEL SUBMITTED THAT THE ISSUE RAISED IN GROUND NOS. 1 & 2 REGARDING ASSESSEES ELIGIBILITY FOR EXE MPTION U/S 11 AS A CONSEQUENCE OF GRANT OF REGISTRATION BY THE TRIBUN AL SHOULD HAVE BEEN ADMITTED BY THE LD. CIT(A) AND THE LD. CIT(A) WRONG LY APPLIED THE RATIO OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZ INDIA LIMITED VS. CIT, AS REPORTED IN 284 ITR 323, AS THE SAME DID NOT BAR THE LD. CIT(A) TO ENTERTAIN THE CLAIM OF THE ASSESSEE M ADE IN THE COURSE OF APPELLATE PROCEEDINGS. 6. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER H AND, PLACED STRONG RELIANCE ON THE ORDER OF LD. CIT(A). PAGE 4 OF 9 I.T.A.NOS. 319 TO 321/IND/2008 KUMS, SANAWAD 7. WE FIND THAT AFTER THE FILING OF APPEAL, THE ASSES SEE HAS BEEN GRANTED REGISTRATION U/S 12AA SINCE ITS CREATION, H ENCE, IN OUR VIEW, THE ADDITIONAL GROUNDS SHOULD HAVE BEEN ADMITTED BY THE CIT(A). WE ARE FURTHER OF THE VIEW THAT THE RATIO OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETEZ INDIA LIMITED (SUPRA) I S NOT APPLICABLE TO THE INSTITUTION OF LD. CIT(A). HENCE, FOR THIS REASON A LSO, THE VIEW TAKEN BY THE CIT(A) IS NOT CORRECT IN LAW. ACCORDINGLY, GROU ND NOS. 1 & 2 ARE ALLOWED. 8. AS REGARDS THE ISSUE RAISED IN GROUND NOS. 3 & 4, T HE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL THE INC OMES EARNED BY THE ASSESSEE SAMITI WERE ELIGIBLE FOR EXEMPTION U/S 11. HENCE, THE ORDER OF THE LD. CIT(A) WAS NOT CORRECT IN LAW. THE LEARNED COUNSEL FURTHER CONTENDED THAT THIS ISSUE WAS ALSO COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF KRISHI UPAJ MANDI SAMITI, B URHANPUR, 12 ITJ 12. THE LD. DEPARTMENTAL REPRESENTATIVE ALSO AGREED. AC CORDINGLY, WE HOLD THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION U/S 11. THUS, GROUNDS NO. 3 & 4 ARE ALSO ALLOWED. THE LEARNED COUNSEL REITERATED TH E SUBMISSIONS MADE BEFORE REVENUE AUTHORITIES AND THE LD. DEPARTMENTAL REPRESENTATIVE PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT( A). 9. AS REGARDS THE ISSUE RAISED IN GROUND NO.5. WE FIND THAT THE LD. CIT(A) HAS DIRECTED THE A.O. TO ALLOW DEPRECIATION ON W.D.V. AS ON PAGE 5 OF 9 I.T.A.NOS. 319 TO 321/IND/2008 KUMS, SANAWAD 1.4.2003 AND ANY ADDITIONS THEREAFTER MADE DURING T HE YEAR UNDER CONSIDERATION . IN OUR VIEW, SUCH DECISION OF THE L D. CIT(A) IS CORRECT IN LAW. HENCE, WE DISMISS THIS GROUND OF THE ASSESSEE. WE MAY FURTHER ADD THAT THIS VIEW IS DULY SUPPORTED BY THE DECISION O F THE TRIBUNAL IN THE KRISHI UPAJ MANDI SAMITI AS REPORTED IN 12 ITJ 1, 12 ITJ 12 AND 13 ITJ 103. THUS, THIS GROUND OF THE ASSESSEE IS DISMISSED . 10. LEARNED COUNSEL, THEREAFTER, CONTENDED THAT THE ISS UES RAISED IN GROUND NOS. 6 TO 9 WERE DIRECTLY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE CASE OF KRISHI UPAJ MANDI SAMITI, BURHANPUR AS REPORTED IN 12 ITJ 12. THE LD. DEPARTM ENTAL REPRESENTATIVE ALSO AGREED. ACCORDINGLY, WE ACCEPT ALL THESE GROUN DS OF THE ASSESSEE. 11. GROUND NO. 10 IS PRE-MATURE, HENCE, WE DISMISS THE SAME. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS PARTLY ALLOWED. 13. NOW, WE SHALL TAKE UP ASSESSEES APPEAL IN I.T.A.NO . 320/IND/2008. 14. BOTH THE PARTIES AGREED THAT THE ISSUES RAISED IN G ROUND NOS. 1 TO 7 AND GROUND NO. 9 WERE IDENTICAL TO THE ISSUES RAI SED IN RELEVANT GROUNDS RAISED IN I.T.A.NO. 319/IND/2008 AND REITERATED THE SAME CONTENTIONS. ACCORDINGLY, WE ACCEPT GROUND NOS. 1 TO 7 AND DISMI SS THE GROUND NO.9 OF THIS APPEAL FOLLOWING THE SAME REASONS. PAGE 6 OF 9 I.T.A.NOS. 319 TO 321/IND/2008 KUMS, SANAWAD 15. GROUND NO.8 READS AS UNDER :- THE LD. CIT(A) HAS ERRED IN NOT ALLOWING THE DEDUC TION OF RS. 24,000/- ON ACCOUNT OF PAYMENT UNDER A SCHEME D ECLARED BY M.P. STATE VIPANAN BOARD, BHOPAL, FOR DEVELOPMEN T OF FARMERS. 16. THIS ISSUE BEING A NEW ONE, HENCE, THE LEARNED COUN SEL SUBMITTED THAT THE AFORESAID EXPENSES PERTAINED TO PRESENTATION OF MEMENTOS IN THE FORM OF GOLD RING WHICH WAS VERY MU CH FOR THE PURPOSE OF SAMITI, AS THESE MEMBERS HAD RENDERED VALUABLE S ERVICES TO THE ASSESSEE SAMITI DURING THE COURSE OF THEIR TENURE A ND THAT TOO WITHOUT ANY MONETARY CONSIDERATION. 17. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER H AND, PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 18. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 19. IT IS NOTED THAT THESE EXPENSES ARE IN CONNECTION W ITH GIFTS OF SIXTEEN RINGS TO SIXTEEN MEMBERS OF THE SAMITI ON C OMPLETION OF THEIR TENURE WITH THE SAMITI DURING WHICH PERIOD THEY DID NOT TAKE ANY SALARY. IT IS NOT IN DISPUTE THAT SUCH PERSONS HAVE RENDERED S ERVICES TO THE ASSESSEE SAMITI DURING THE PERIOD OF THEIR ASSOCIATION WITH THE SAMITI. HENCE, SUCH EXPENDITURE SHOULD BE CONSIDERED AS INCURRED FOR TH E PURPOSES OF THE PAGE 7 OF 9 I.T.A.NOS. 319 TO 321/IND/2008 KUMS, SANAWAD SOCIETY. ACCORDINGLY, WE HOLD THAT THERE IS NO MERI T IN THIS ADDITION, PARTICULARLY WHEN THE ASSESSEE SAMITI HOLDING A VAL ID REGISTRATION U/S 12AA OF THE ACT. WE ALSO FIND THAT THIS EXPENDITURE HAS BEEN INCURRED AFTER RESOLUTION PASSED BY THE COMPETENT AUTHORITI ES, HENCE, GENUINENESS THEREOF AND REGARDING INCURRENCE OF THE SAME FOR TH E PURPOSE OF SAMITI CANNOT BE DENIED. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED. 20. GROUND NO.10 RELATING TO DISALLOWANCE OF PAYMENT OF P. F. OF RS. 16,888/- WAS NOT PRESSED. HENCE, THE SAME IS DI SMISSED, AS NOT PRESSED. 21. NOW, WE SHALL TAKE UP THE ASSESSEES APPEAL IN I.T. A.NO. 321/IND/2008. 22. BOTH THE PARTIES AGREED THAT THE ISSUES RAISED IN G ROUND NOS. 1 TO 7 AND 9 WERE IDENTICAL TO THE ISSUES RAISED IN GROU ND NOS. 1 TO 7 AND 9 OF ASSESSEES APPEAL IN I.T.A.NO. 320/IND2008 AND REIT ERATED THE SAME SUBMISSIONS. FOLLOWING THE SAME REASONS, WE ALLOW G ROUND NOS. 1 TO 7 OF THE ASSESSEES APPEAL AND DISMISS GROUND NO. 9 OF T HE ASSESSEE S APPEAL. 23. GROUND NOS. 8 & 10 READ AS UNDER :- 8. THE LD. CIT(A) HAS ERRED IN NOT ALLOWING DEDUCT ION OF RS.86,247/- ON ACCOUNT OF PAYMENT UNDER A SCHEME DE CLARED BY M.P. STATE VIPANAN BOARD, BHOPAL, FOR DEVELOPMEN T OF FARMERS. PAGE 8 OF 9 I.T.A.NOS. 319 TO 321/IND/2008 KUMS, SANAWAD 10. THE LD. CIT(A) HAS ERRED IN NOT ALLOWING A SUM OF RS. 16,888/- BEING THE PAYMENT FOR P. F. 24. THESE GROUNDS WERE NOT PRESSED, HENCE DISMISSED, AS NOT PRESSED. 25. GROUND NO.11 READS AS UNDER :- THE LD. CIT(A) HAS ERRED IN ENHANCING THE INCOME BY RS. 13,29,086/- BEING CONTRIBUTION TO MANDI BOARD SHULK AS NOT ALLOWABLE U/S 36(1)(XII). 26. BOTH THE PARTIES AGREED THAT THE ISSUE RAISED IN TH IS GROUND WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION I N THE CASE OF KRISHI UPAJ MANDI SAMITI AS REPORTED IN 12 ITJ 12, HENCE, THE FOLLOWING THE SAME, WE ALLOW THIS GROUND OF THE ASSESSEE. 27. GROUND NO.12 RELATING TO INITIATION OF PENALTY PROC EEDINGS U/S 271(1) ( C) OF THE ACT IS PRE-MATURE, HENCE, DISMIS SED. 28. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED PARTLY ALLOWED. 29. TO SUM UP, ALL THE APPEALS OF THE ASSESSEE ARE PART LY ALLOWED. PAGE 9 OF 9 I.T.A.NOS. 319 TO 321/IND/2008 KUMS, SANAWAD 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* 2425D26