The ACIT, Bhopal V. M/s Krishi Upaj Mandi Samiti., Harda

ITA 385/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0019 (ITAT-INDORE)
• Duration Of Justice: 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-08-2009
• Assessment Year: 2006-2007
• Appeal Filed On: 27-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K KARAN
• Assessee Lawyers: S S DESH
• Keywords: Business expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI M.L. GUSIA, ACCOUNTANT MEMBER PAN NO. : AAATK8010A I.T.A.NO.385/IND/2009 A.Y. : 2006-07 ACIT, M/S.KRISHI UPAJ MANDI SAMITI, 1(1), VS TIMARNI, BHOPAL HARDA APPELLANT RESPONDENT PAN NO. : AAATK8037D I.T.A.NO.386/IND/2009 A.Y. : 2006-07 ACIT, M/S.KRISHI UPAJ MANDI SAMITI, 1(1), VS KHIRKIYA, BHOPAL HOSHANGABAD APPELLANT RESPONDENT APPELLANT BY : SHRI V.K.KARAN, ADDL. CIT DR RESPONDENT BY : SHRI S.S.DESHPANDE, C. A. O R D E R PER SAINI, J.M. BOTH THE DEPARTMENTAL APPEALS AGAINST DIFFERENT ORD ERS OF LD. CIT(A)- I, BHOPAL, DATED 13 TH MAY, 2009, FOR ASSESSMENT YEAR 2006-07, WHEREBY - : 2: - 2 REVENUE CHALLENGED THE DELETION OF ADDITION ON ACCO UNT OF EXCESS CLAIM OF ROAD DEVELOPMENT FUND AND EXCESS CLAIM OF BOARD FEE . 2. THE LD. CIT(A) CONSIDERING THE NOTIFICATION ISSUED UNDER THE POWERS CONFERRED U/S 43(1) OF M.P.KRISHI UPAJ MANDI ADHINIYAM, 1972, NOTED THAT ROAD DEVELOPMENT FUND AND MANDI BOARD PA YMENTS ARE THE AMOUNTS, WHICH ARE DIVERTED TO MANDI BOARD. IT IS A LSO NOTED THAT THESE ARE STATUTORY PAYMENTS AS PER PERCENTAGE PROVIDED IN TH E ACT. THEREFORE, NO DISALLOWANCE COULD BE MADE IN THE HANDS OF THE ASSE SSEE. BOTH THE ADDITIONS WERE, ACCORDINGLY, DELETED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET , SUBMITTED THAT ACTUAL PAYMENTS ARE MADE TOWARDS MANDI BOARD FEE AN D ROAD DEVELOPMENT FUNDS AND FURTHER SUBMITTED THAT ISSUES ARE COVERED BY EARLIER ORDER OF I.T.A.T., INDORE BENCH, IN THE CASE OF KRISHI UPAJ MANDI SAMITI, BURHANPUR, VS. ITO REPORTED IN 12 ITJ 12. THE LD. DEPARTMENTAL REPRESENTATIVE DID NOT DISPUTE ABOVE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE AND ALSO STATED THAT ISSUES ARE COVERED IN FAVOUR OF THE ASS ESSEE. 4. ON CONSIDERATION OF THE FACTS NOTED BY THE CIT(A) A ND SUBMISSIONS OF THE PARTIES, WE ARE OF THE VIEW THAT BOTH THE IS SUES ARE COVERED IN FAVOUR OF THE ASSESSEES BY THE ORDER OF THE TRIBUNAL IN THE CASE OF KRISHI UPAJ MANDI SAMITI, BURHANPUR (SUPRA), IN WHICH IT WAS HELD THA T PAYMENT OF STATUTORY - : 3: - 3 BOARD FEE AND KISAN SARAK NIDHI, ( ROAD DEVELOPMENT FUND ) TO THE MANDI BOARD ARE STATUTORY PAYMENTS. THE PAYMENTS ARE MADE IN ORDER TO ACHIEVE OBJECTIVES OF THE ASSESSEE. HENCE, ALLOWABLE U/S 36 (1)(XII) OF THE INCOME-TAX ACT, 1961. THE ASSESSEE FURNISHED DETAILS BEFORE TH E LD. CIT(A) WHICH HAVE BEEN EXAMINED BY THE CIT(A) AND RIGHTLY CAME TO THE CONCLUSION THAT NO DISALLOWANCE COULD BE MADE ON THIS HEAD. IT IS UNDI SPUTED FACT THAT ISSUES ARE NOW COVERED IN FAVOUR OF THE ASSESSEE BY THE ABOVE JUDGMENT OF THE TRIBUNAL. IT MAY ALSO BE NOTED THAT HONBLE RAJASTH AN HIGH COURT IN THE CASE OF KOTHPUTLI RURAL ELECTRIC COOP. SOCIETY REPORTED IN 255 ITR 563, HELD THAT STATUTORY RESERVE AMOUNT CREATED UNDER STATUTORY CO MPULSION UNDER ELECTRICITY ACT. THE ASSESSEE CANNOT USE THIS AMOUN T. THEREFORE, IT BEING A BUSINESS EXPENDITURE IS DEDUCTIBLE. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN ALLOWIN G THE APPEALS OF THE ASSESSEE ON BOTH THE ISSUES. AS A RESULT, BOTH THE DEPARTMENTAL APPEALS ARE DISMISSED. T HIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2009. SD/- SD/- M. L. GUSIA BHAVNESH SAINI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :26 TH AUGUST, 2009. CPU* 268