The ITO, Khargone V. Krishi Upaj Mandi Samiti, Barwani

ITA 330/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1459 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-11-2009
• Assessment Year: 2006-2007
• Appeal Filed On: 29-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K KARAN
• Assessee Lawyers: PAVITRAN NAMBIAR ITP
• Keywords: Capital expenditure

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM, AND SHRI V.K. GUPTA , AM ITA NOS.330, 331, 334 & 335/IND/2009 AY: 2006-07 ITO- KHARGONE .....APPELLANT V/S. 1. KRISHI UPAJ MANDI SAMITI, BARWANI (PAN AAALK 0374 M) 2. KRISHI UPAJ MANDI SAMITI, BHIKANGAON (PAN AAALK 0363 L) 3. KRISHI UPAJ MANDI SAMITI, KARHI (PAN AAALK 0249 F) 4. KRISHI UPAJ MANDI SAMITI, KHARGONE (PAN AAALK 0168 M) ....RESPONDENTS DEPARTMENT BY : SHRI V.K. KARAN, SR. DR ASSESSEES BY : SHRI PAVITRAN NAMBIAR, ITP ORDER PER JOGINDER SINGH, JM THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE DIFFERENT ORDERS DATED 16.3.2009 OF LD. CIT(A)-II, INDORE. THE GROUN DS RAISED IN ITA NO. 330 & 334/IND/2009 ARE IDENTICAL WHICH ARE AS UNDER: 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY ERRED IN DELETING THE ADDITIONS MADE BY THE AO BY DISALLOWING THE CLAIM OF EXPENDITURE ON ACCOUNT OF MANDI BOARD VIKAS NIDHI AND KISAN SADAK NIDHI. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY DID NOT APPRECIATE THE FACT THAT MANDI BOARD VIKAS NIDHI, AND KISAN SADAK NIDHI WERE ACTUALLY IN THE NATURE OF CONTRIBUTION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THAT THESE CONTRIBUTIONS HAD TO BE CONSIDERED, AS REQUIRED UNDER THE PROVISION OF SECTION 36(I)(XII), AND COULD NOT BE CAPITAL IN NATURE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE FACT THAT THE ARAKSHIT NIDHI I S CREATION OF RESERVE FUND FOR PENSION, AND NOT ACTUA L EXPENDITURE, FOR WHICH MANDI SAMITI HAD NOT OBTAINED STATUTORY APPROVAL, AS REQUIRED UNDER THE IT ACT. DURING HEARING OF THESE APPEALS, WE HAVE HEARD SHR I V.K. KARAN, LD. SR. DR AND SHRI PAVITRAN NAMBIAR, LD. COUNSEL FOR ASSES SEE. AT THE OUTSET, IT WAS POINTED OUT BY THE LD. COUNSEL FOR ASSESSEE THAT TH E IMPUGNED ISSUES ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE TRIBUNAL IN THE CASE OF KUMS, BURHANPUR (12 ITJ 12)(INDORE ITAT). THIS F ACTUAL MATRIX WAS 3 CONSENTED TO BE CORRECT BY THE LD. SR. DR. IT IS SE EN THAT THE LD. FIRST APPELLATE AUTHORITY HAS JUDICIOUSLY EXAMINED THE ISSUES BY FO LLOWING THE AFORESAID ORDER OF THE TRIBUNAL, THEREFORE, IN THE ABSENCE OF ANY C ONTRARY DECISION, WE HAVE NOT FOUND ANY INFIRMITY IN THE IMPUGNED ORDER. IT I S UPHELD. BOTH THESE APPEALS OF THE REVENUE ARE, THEREFORE, DISMISSED. GROUNDS OF ITA NO. 331/IND/2009 READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY ERRED IN DELETING THE ADDITIONS MADE BY THE AO BY DISALLOWING THE CLAIM OF EXPENDITURE ON ACCOUNT OF VIKAS NIDHI, AND MANDI BOARD VIKAS NIDHI. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY DID NOT APPRECIATE THE FACT THAT VIKAS NIDHI AND MANDI BOARD VIKAS NIDHI WERE ACTUALLY IN THE NATURE OF CONTRIBUTION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THAT THE SAMITIES ONTRIBUTIONS HAD TO BE CONSIDERED, AS REQUIRED UNDER THE PROVISION OF SECTION 36(I)(XII). 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE KRISHI ANUSANDHAN NIDHI HAD BEEN CREATED FOR INFRASTRUCTURE DEVELOPMENT, AND AS PER SECTION 36(I)(XII) SUCH EXPENDITURE COULD NOT BE CAPITAL EXPENDITURE, IN NATURE. 4 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. FIRST APPELLATE AUTHORITY DID NOT APPRECIATE THE FACT THAT THE ARAKSHIT NIDHI IS CREATION OF RESERVE FUND FOR PENSION, AND NOT ACTUA L EXPENDITURE, FOR WHICH MANDI SAMITI HAD NOT OBTAINED STATUTORY APPROVAL, AS REQUIRED UNDER THE IT ACT. GROUNDS OF ITA NO.335/IND/2009 READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY ERRED IN DELETING THE ADDITIONS MADE BY THE AO BY DISALLOWING THE CLAIM OF EXPENDITURE ON ACCOUNT OF VIKAS NIDHI AND M.P. RAJYA VIPNAN BOARD ANUDAN. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY DID NOT APPRECIATE THE FACT THAT VIKAS NIDHI, AND M.P. RAJY A VIPNAN ANUDAN EXPENSES WERE ACTUALLY IN THE NATURE OF CONTRIBUTION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE THAT THESE CONTRIBUTIONS HAD TO BE CONSIDERED, AS REQUIRED UNDER THE PROVISION OF SECTION 36(I)(XII), AND COULD NOT BE CAPITAL IN NATURE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. FIRST APPELLATE AUTHORITY DID NOT APPRECIATE FACT THAT THE ARAKSHIT NIDHI IS 5 CREATION OF RESERVE FUND FOR PENSION, AND NOT ACTUA L EXPENDITURE, FOR WHICH MANDI SAMITI HAD NOT OBTAINED STATUTORY APPROVAL, AS REQUIRED UNDER THE IT ACT. THE LD. COUNSEL FOR BOTH SIDES FAIRLY AGREED THAT THE IMPUGNED ISSUES ARE ALSO COVERED BY THE AFORESAID DECISION OF THE T RIBUNAL IN THE CASE OF KUMS, BURHANPUR (12 ITJ 12) (ITAT, INDORE) AND VARI OUS OTHER DECISIONS PASSED BY THE TRIBUNAL IN THE CASES OF DIFFERENT KR ISHI UPAJ MANDI SAMITIES. IN VIEW OF THIS FACT AND THE ARGUMENTS ADVANCED BY THE LD. REPRESENTATIVES FROM BOTH THE SIDES, WE HAVE FOUND THAT THE LD. FIRST AP PELLATE AUTHORITY HAS JUSTIFIABLY CONSIDERED THE ISSUES, IN WHICH, NO DEF ECT WAS POINTED OUT BY EITHER SIDE. THE STAND OF THE LD. CIT(A) IS UPHELD. IN THE RESULT, BOTH THESE APPEALS OF THE REVENUE A RE ALSO HAVING NO MERIT, THEREFORE, DISMISSED. FINALLY, ALL THESE APPEALS OF THE REVENUE ARE DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE SIDES ON THE CONCLUSION OF THE HEARING ON 24.11.2009. SD/- SD/- (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24.11.2009 {VYAS} COPY TO: APPELLANTS/RESPONDENTS/CIT/ CIT(A)/DR