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

ITA 333/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1465 (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: NITIN AGRAWAL
• Section: 12AA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI V.K. GUPTA, AM ITA NO.333/IND/2009 AY: 2006-07 ITO- KHARGONE .....APPELLANT V/S. KRISHI UPAJ MANDI SAMITI, KASRAWAD (PAN AAALK 0731 E) .....RESPONDENT CO NO.60/IND/2009 (ARISING OUT OF ITA NO.333/IND/2009) AY: 2006-07 KRISHI UPAJ MANDI SAMITI, KASRAWAD (PAN AAALK 0731 E) .....APPELLANT V/S. ITO- KHARGONE .....RESPONDENT DEPARTMENT BY : SHRI V.K. KARAN, SR. DR ASSESSEE BY : SHRI NITIN AGRAWAL, CA ORDER 2 PER JOGINDER SINGH, JM THIS APPEAL BY THE REVENUE AND CO BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 16.3.2009 OF LD. CIT(A)-II, INDORE. THE REVENUE HAS RAISED FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY ERRED IN DELETING THE ADDITION MADE BY THE AO BY DISALLOWING THE CLAIM OF EXPENDITURE ON ACCOUNT OF MANDI BOARD VIKAS NIDHI, KISAN SADAK NIDHI, GAO SANRAKSHAN NIDHI, BHOOMI ANUSANRACHNA NIDHI AND ELECTION EXPENSES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY DID NOT APPRECIATE THE FACT THAT PAYMENTS TO MANDI BOARD VIKAS NIDHI, KISAN SADAK NIDHI, GAO SANRAKSHAN NIDHI, AND BHOOMI ANUSANRACHNA 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 NATU RE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. FIRST APPELLATE AUTHORITY FAILED TO APPRECIATE FACT THAT THE ARAKSHIT NIDHI IS CREATION OF RESERVE FUND FOR PENSION, AND NOT ACTUAL 3 EXPENDITURE, FOR WHICH MANDI SAMITI HAD NOT OBTAINED STATUTORY APPROVAL, AS REQUIRED UNDER THE IT ACT. 2. THE GROUNDS RAISED BY THE REVENUE PERTAIN TO DIS ALLOWING THE CLAIM OF EXPENDITURE ON ACCOUNT OF MANDI BOARD VIKAS NIDHI, KISAN SADAK NIDHI, GAU SANRAKHAN NIDHI, BHOOMI ANUSANRACHNA NIDHI AND ELEC TION EXPENSES ARE CONCERNED, THESE WERE CLAIMED TO BE COVERED IN FAVO UR OF THE ASSESSEE AS DIRECTION FOR REGISTRATION WAS GRANTED BY THE TRIBU NAL VIDE ORDER DATED 14.12.2007 TO WHICH THE LD. COMMISSIONER GRANTED RE GISTRATION U/S 12AA ON 23.3.2008 W.E.F. 28.3.2007. THE TRIBUNAL IN THE CAS E OF KRISHI UPAJ MANDI SAMITI, BURHANPUR (2009) (12 ITJ 12) (INDORE ITAT) HELD THAT THE AFORESAID CONTRIBUTIONS IS ALLOWABLE EXPENDITURE. IN VIEW OF THIS FACT, THERE IS NO INFIRMITY IN THE IMPUGNED ORDER, CONSEQUENTLY, THES E GROUNDS OF THE REVENUE ARE HAVING NO MERIT. 3. THE GROUND OF CO FILED BY ASSESSEE IS THAT THE L D. CIT(A) HAS ERRED IN HOLDING THAT THE PROVISION OF SECTION 11/12A OF THE ACT IS NOT APPLICABLE TO THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07. SINCE THE REGISTRATION WAS GRANTED BY THE LD. COMMISSIONER PURSUANT TO DIRECTION OF TH E TRIBUNAL, WHICH WAS AFFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT A ND THE SLP OF THE DEPARTMENT WAS DISMISSED BY THE HONBLE APEX COURT, CONSEQUENTLY, THE IMPUGNED GROUND IS REMANDED BACK TO THE LD. CIT(A) FOR ADJUDICATION IN 4 ACCORDANCE WITH LAW, KEEPING IN VIEW THE DECISION O F THE HONBLE JURISDICTIONAL HIGH COURT/TRIBUNAL. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED AND THE CO OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION O F THE HEARING ON 24.11.2009. SD/- SD/- (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24.11.2009 {VYAS} COPY TO: APPELLANT/RESPONDENT/CIT/ CIT(A)/DR