ITO, New Delhi V. M/s. Fish Poultry and Egg Marketing Committee, Delhi

ITA 4188/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4676 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 29-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Keywords: Retrospective amendment; Benefit of exemption
• Section: 10

Judgement Text

ITA 4187 TO 4189/D/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 4187/DEL/2016 ASSESSMENT YEAR: 2009-10 ITA NO. 4188/DEL/2016 ASSESSMENT YEAR: 2010-11 ITA NO. 4189/DEL/2016 ASSESSMENT YEAR: 2012-13 ITO, WARD 60(4), ROOM NO. 315, 3 RD FLOOR, D BLOCK, VIKAS BHAVAN, NEW DELHI. VS FISH POULTRY AND EGG MARKETING COMMITTEE, FISH MARKET COMPLEX, GAZIPUR, DELHI-110096 (PAN: AAATF0883G) APPELLANT RESPONDENT DEPARTMENT BY : MS ASHIMA NEB, SR . DR ASSESSEE BY: MRS. AVNISH AHLAWAT, ADVOCATE SHRI PARAS CHAUDHRY, ADVOCATE SHRI AMIR SINGH, ADVOCATE DATE OF HEARING: 29.05.2019 DATE OF PRONOUNCEMENT: 31.05.2019 O R D E R PER SUDHANSHU SRIVASTAVA, J.M. ALL THESE THREE APPEALS HAVE BEEN PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)- 19, NEW DELHI {CIT (A)} VIDE ORDERS DATED 02.05.201 6 FOR ASSESSMENT YEARS 2009-10, 2010-11 AND 2012-13 RESP ECTIVELY ITA 4187 TO 4189/D/2016 2 AND INVOLVE IDENTICAL ISSUES; THEREFORE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2.0 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CLAIMS TO BE AN AGRICULTURAL PRODUCE MARKET COMMITTEE REGULAT ING THE MARKETING OF AGRICULTURAL PRODUCE. IT IS THE ASSES SEES CLAIM THAT IT WAS ELIGIBLE FOR EXEMPTION U/S 10(26AAB) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT'). FOR ASSESSMENT YEAR 2009-10, THE RETURN OF INCOME WAS FILED DECLAR ING A LOSS OF RS. 1,84,928/- AFTER CLAIMING DEDUCTION OF RS. 92,7 6,540/- U/S 10(26AAB) OF THE ACT. IN ASSESSMENT YEAR 2010-11, THE RETURN OF INCOME WAS FILED DECLARING LOSS OF RS.1,69,427/- AF TER CLAIMING DEDUCTION OF RS. 1,06,26,739/- U/S 10(26AAB) OF THE ACT. IN ASSESSMENT YEAR 2012-13, THE RETURN WAS FILED DECLA RING A LOSS OF RS. 2,23,586/- AFTER CLAIMING DEDUCTION OF RS. 6,0 4,06,259/- U/S 10(26AAB) OF THE INCOME TAX ACT. 2.1 THE ASSESSEE WAS REQUIRED TO EXPLAIN THE VERAC ITY OF ITS CLAIM U/S 10(26AAB) OF THE ACT BY THE ASSESSING OFF ICER IN ALL THE THREE YEARS AND THE ASSESSEE SUBMITTED THAT THE ASS ESSEE IS A MARKETING COMMITTEE ESTABLISHED UNDER THE DELHI AGR ICULTURAL PRODUCE MARKET (REGULATION) ACT, 1976 AND ENTRUSTED WITH THE ITA 4187 TO 4189/D/2016 3 DUTY OF SUPERVISING, CONTROLLING AND PROVIDING FACI LITIES TO THE TRADERS OPERATING IN THE COMMITTEE PREMISES. IT WA S FURTHER SUBMITTED THAT THE ASSESSEE REGULATES THE MARKETING OF FISH, POULTRY AND EGGS. IT WAS EXPLAINED THAT THE RAW MA TERIAL IS BROUGHT IN BY THE WHOLESALERS AND AFTER REFINING TH E SAME I.E. AFTER CHECKING, CLEANING, SORTING/SEGREGATING, CHOP PING, PRESERVING, AND PACKING, THE SAME IS SUPPLIED TO VA RIOUS BUYERS BY THE TRADERS WHO ARE OPERATING IN THE COMMITTEE A REA. IT WAS SUBMITTED BY THE ASSESSEE THAT THE COMMITTEE HAS BE EN FORMED FOR BETTER REGULATION OF NOTIFIED AGRICULTURAL PROD UCE IN THE NOTIFIED MARKET FOR THE BENEFIT OF THE FARMERS, GRO WERS, COMMISSION AGENTS AND TRADERS AND TO SEE THAT THE F ARMERS GET THE BEST PRICE OF THEIR NOTIFIED PRODUCE IN THE MAR KET. IT WAS SUBMITTED THAT SINCE THESE ACTIVITIES FALL WITHIN T HE PURVIEW OF EXEMPTION AS SPECIFIED IN SECTION 10(26AAB) OF THE ACT, THE ASSESSEE WAS ELIGIBLE FOR THE SAID EXEMPTION. APAR T FROM THIS, THE ASSESSEE ALSO SUBMITTED VARIOUS OTHER DOCUMENTS IN SUPPORT OF ITS CLAIM. 2.2 HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINC ED WITH THE ASSESSEES CLAIM AND HELD THAT MARKETING OF FIS H, POULTRY AND EGGS SHOULD NOT BE TERMED AS MARKETING OF AGRICULTU RAL PRODUCTS ITA 4187 TO 4189/D/2016 4 AND THAT IT WAS RATHER A TRADING VENTURE OF CERTAIN NON- AGRICULTURAL GOODS. THE ASSESSING OFFICER PROCEEDE D TO DISALLOW THE ASSESSEES CLAIM U/S 10(26AAB) IN ALL THE THREE YEARS UNDER CONSIDERATION. 2.3 AGGRIEVED, THE ASSESSEE APPROACHED THE LD. CIT (A) IN ALL THE THREE YEARS AND THE LD. CIT (A) HELD IN FAV OUR OF THE ASSESSEE BY HOLDING THAT THE ASSESSEE WAS ENTITLED TO EXEMPTION U/S 10(26AAB) OF THE ACT. 2.4 AGGRIEVED BY THE ORDER/S OF THE LD. CIT (A), T HE DEPARTMENT IS NOW IN APPEAL BEFORE THE ITAT AND HAS CHALLENGED THE FINDINGS OF THE LD. CIT (A) IN THE THREE YEARS UNDER CONSIDERATION. 3.0 THE LD. SR. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT A BARE READING OF SECTION 10(26AAB) OF THE ACT WOULD SUGGEST THAT THE EXEMPTION IS GRANTED WITH RE SPECT TO ANY INCOME OF AN AGRICULTURAL PRODUCE, MARKETING COMMIT TEE OR BOARD CONSTITUTED UNDER ANY LAW FOR THE TIME BEING IN FOR CE FOR THE PURPOSE OF REGULATING THE MARKETING OF AGRICULTURAL PRODUCE WHEREAS THE ASSESSEE IS A FISH, POULTRY AND EGG MAR KETING COMMITTEE AND, THEREFORE, THE EXEMPTION WAS NOT ALL OWABLE TO THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT AS PER SEC TION 10(26AAB) ITA 4187 TO 4189/D/2016 5 OF THE ACT, ANY INCOME DERIVED FROM AGRICULTURE ON LAND SITUATED IN INDIA AND USED FOR AGRICULTURAL PURPOSES IS AGRI CULTURAL INCOME AND, THUS, ONLY INCOME FROM BASIC OPERATION OF CULT IVATING LAND AND REQUIRING EXPENDITURE OF HUMAN SKILL AND LABOUR ON LAND CAN BE TERMED AS AGRICULTURAL INCOME. IT WAS FURTHER S UBMITTED THAT AGRICULTURAL PRODUCE WOULD MEAN PRODUCE WHICH WAS C OMING OUT OF THE EARTH AFTER COMPLETING NECESSARY ACTIVITIES ON AGRICULTURAL LAND I.E. PLOUGHING, SEEDING, WATERING LOOKING AFTE R/MAINTENANCE, HARVESTING ETC. WHEREAS THE PRODUCTS BEING MARKETED AND REGULATED BY THE ASSESSEE I.E. FISH, POULTRY AND EG GS WERE NOT DERIVED FROM ANY KIND OF AGRICULTURAL OPERATIONS. A REFERENCE WAS ALSO MADE BY THE LD. SR. DR TO THE UNION FINANCE MI NISTERS SPEECH ON FINANCE BILL, 2008 WHEREIN EXEMPTION U/S 10(26AAB) WAS GIVEN ONLY TO AGRICULTURAL PRODUCE MARKET COMMI TTEES OR STATE AGRICULTURAL MARKETING BOARDS BUT FISH, POULT RY AND EGG MARKETING COMMITTEES HAD NOT BEEN SPECIFIED. IT WA S SUBMITTED THAT HAD IT BEEN THE INTENTION OF THE LEGISLATURE T O ALLOW EXEMPTION TO THESE KINDS OF COMMITTEES, IT WOULD HA VE BEEN SPECIFICALLY MENTIONED. THE LD. SR. DR SUBMITTED T HAT THE LD. CIT (A) HAD MISINTERPRETED THE PROVISIONS AND HAD ALLOW ED THE ASSESSEES CLAIM IN COMPLETE DISREGARD TO THE FACT AND LAW. ITA 4187 TO 4189/D/2016 6 4.0 IN RESPONSE, THE LD. AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT THE ASSESSEE HAS BEEN CONSTITUTED UN DER THE DELHI AGRICULTURAL PRODUCE MARKETING (REGULATION) ACT, 19 76 U/S 23 OF THE SAID ACT ON 31.08.2001. IT WAS SUBMITTED THAT SECTION 10(26AAB) OF THE INCOME TAX ACT, 1961 PROVIDES FOR EXEMPTION TO AGRICULTURAL PRODUCE MARKETING COMMITTEE OR BOARD W HICH HAS BEEN CONSTITUTED UNDER ANY LAW FOR THE PURPOSE OF R EGULATING THE MARKETING OF AGRICULTURAL PRODUCE AND FOR THE STATE OF DELHI, THE RELEVANT LAW IS DELHI AGRICULTURAL PRODUCE MARKETIN G REGULATION ACT, 1998 WHICH EMPOWERED NOTIFICATION OF ANY AREA IN DELHI FOR THE PURPOSE OF REGULATING MARKETING OF AGRICULTURAL PRODUCE U/S 3 AND 4 OF THE SAID ACT. IT WAS FURTHER SUBMITTED TH AT THE ASSESSEE HAS BEEN APPOINTED U/S 35 OF THE SAID ACT TO FACILI TATE TRADING IN FISH, POULTRY AND EGGS VIDE NOTIFICATION IN THE DEL HI GAZETTE NCTD NO. 200 DATED 31.08.2001. IT WAS SUBMITTED THAT TH E ONLY GROUND FOR DISALLOWANCE BY THE ASSESSING OFFICER WAS THAT FISH, POULTRY AND EGGS DO NOT CONSTITUTE AGRICULTURAL COMMODITY. 4.1 THEREAFTER, THE LD. AR MADE A REFERENCE TO THE DEFINITION OF AGRICULTURAL PRODUCE AS CONTAINED IN SECTION 2 OF THE DELHI AGRICULTURAL PRODUCE MARKETING (REGULATION) A CT, 1998 WHEREIN AGRICULTURAL PRODUCE HAS BEEN DEFINED TO ME AN ALL ITA 4187 TO 4189/D/2016 7 PRODUCE AND COMMODITIES, WHETHER PROCESSED OR UNPRO CESSED OF AGRICULTURAL, HORTICULTURE, APICULTURE, VITICULTURE , PISCICULTURE, SERICULTURE, ANIMAL HUSBANDRY, FLEECES AND SKINS OF ANIMALS AND FOREST PRODUCTS AS WERE SPECIFIED IN THE SCHEDULE. THE LD. AR FURTHER SUBMITTED THAT AS PER THE SCHEDULE, ANIMAL HUSBANDRY PRODUCTS INCLUDED EGGS, BUTTER, CATTLE, GHEE, GOAT MEAT, MILK AND MILK PRODUCTS AND PISCICULTURE INCLUDED FISH. IT W AS SUBMITTED THAT THE DELHI AGRICULTURAL PRODUCE MARKETING REGUL ATION ACT, 1998 DID NOT RESTRICT THE CONSTITUTION OF COMMITTEE ONLY FOR MARKETING OF AGRICULTURAL PRODUCTS AND HAD GIVEN A VERY WIDE MEANING TO THE WORD AGRICULTURAL PRODUCE. 4.2 IT WAS ALSO SUBMITTED THAT THERE WERE NINE AGR ICULTURAL PRODUCE MARKETING COMMITTEES WHICH HAD BEEN FORMED BY DELHI GOVERNMENT UNDER THE ACT AND THE DEPARTMENT HAD ACC EPTED THE CLAIM OF EIGHT MARKETING COMMITTEES BUT HAD DENIED EXEMPTION ONLY TO THIS COMMITTEE. COPIES OF ASSESSMENT ORDER S FOR THE OTHER EIGHT MARKETING COMMITTEES WERE ALSO FILED BY THE L D. AR WHICH HAVE BEEN TAKEN ON RECORD. THE LD. AR VEHEMENTLY D EFENDED THE ORDER OF THE LD. CIT (A) AND SUBMITTED THAT THE LD. CIT (A) HAD RIGHTLY ALLOWED THE BENEFIT OF EXEMPTION TO THE ASS ESSEE. ITA 4187 TO 4189/D/2016 8 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. THE SHORT QUESTION FO R DETERMINATION BY US IS WHETHER MARKETING OF FISH, POULTRY AND EGG S WOULD FALL WITHIN THE DEFINITION OF MARKETING OF AGRICULTURAL PRODUCE. SECTION 10(26AAB) OF THE ACT WHICH PROVIDES FOR DEDUCTION T O AGRICULTURAL PRODUCE MARKETING COMMITTEES READS AS UNDER - [(26AAB) ANY INCOME OF AN AGRICULTURAL PRODUCE MAR KET COMMITTEE OR BOARD CONSTITUTED UNDER ANY LAW FOR TH E TIME BEING IN FORCE FOR THE PURPOSE OF REGULATING THE MA RKETING OF AGRICULTURAL PRODUCE;] 5.1 EXPLANATORY NOTE OF THE PROVISION FINANCE ACT, 2008 ISSUED VIDE CIRCULAR DATED 1/2009 READS AS UNDER: 7. EXEMPTION OF INCOME OF AGRICULTURAL PRODUCE MARKETI NG COMMITTEE OR BOARD 7.1 CLAUSE (26AAB) HAS BEEN INSERTED IN SECTION 10 TO PROVIDE FOR TAX EXEMPTION WITH RESPECT TO THE INCOME OF AN AGRI CULTURAL PRODUCE MARKETING COMMITTEE OR BOARD WHICH HAS BEEN CONSTIT UTED UNDER ANY LAW FOR THE PURPOSE OF REGULATING THE MARKETING OF AGRICULTURAL PRODUCE. 7.2 APPLICABILITY - THIS AMENDMENT HAS BEEN MADE APPLI CABLE WITH EFFECT FROM 1ST APRIL, 2009 AND SHALL ACCORDIN GLY APPLY FOR ASSESSMENT YEAR 2009-10 AND SUBSEQUENT ASSESSMENT Y EARS. 5.2 SECTION 10(26AAB) PROVIDES EXEMPTION TO AGRICU LTURAL PRODUCE MARKETING COMMITTEE (APMC) OR BOARD CONSTIT UTED UNDER THE LAW IN FORCE FOR THE PURPOSE OF REGULATING THE MARKETING OF ITA 4187 TO 4189/D/2016 9 AGRICULTURAL PRODUCE. FOR THE STATE OF DELHI THE RE LEVANT LAW IS THE DELHI AGRICULTURAL PRODUCE MARKETING (REGULATION) A CT, 1998 (HEREINAFTER REFERRED TO AS DAPM). THIS ACT EMPOWER S NOTIFICATION OF ANY AREA IN DELHI FOR THE PURPOSE OF REGULATING MARKETING OF AGRICULTURAL PRODUCE UNDER SECTIONS 3 AND 4 OF DAPM . 5.3 AT THIS JUNCTURE IT WOULD BE RELEVANT TO GO TH ROUGH SOME OF THE PROVISIONS OF THIS ACT: SECTION 20(3) - ESTABLISHMENT OF MARKET. THE DAPM, ACT SEEKS THE ESTABLISHMENT OF ONE PRINCIPAL MARKET AND ONE O R MORE SUBSIDIARY MARKETS, AS CONSIDERED NECESSARY, FOR TH E MARKETING OF NOTIFIED AGRICULTURAL PRODUCE BY BOARD. SECTION 35 OF THE DAPM ACT MANDATES CONSTITUTION OF THE MARKETING COMMITTEE FOR REGULATING THE MARKETING OF DIFFERENT KINDS OF NOTIFIED AGRICULTURAL PRODUCE MARKETED IN THE SP ECIFIED AREA OR ANY PART THEREOF. SECTION 36 OF THE DAPM ACT SPECIFIES THE COMPOSITIO N OF THE MARKETING COMMITTEE. THE POWERS OF THE MARKETING COMMITTEE ARE SPECIFIED UNDER DAPM, ACT-1998 AS UNDER- 55. POWERS AND DUTIES OF THE MARKETING COMMITTEES - (1) SUBJECT TO THE PROVISIONS OF THIS ACT, IT SHALL BE THE DUTY OF A MARKETING COMMITTEE: (I) TO IMPLEMENT THE PROVISIONS OF THIS ACT, AND RULES , REGULATIONS AND BYE-LAWS MADE THERE UNDER THE MARKE T AREA; ITA 4187 TO 4189/D/2016 10 (II) TO PROVIDE SUCH FACILITIES FOR MARKETING OF NOTIFI ED AGRICULTURAL PRODUCE THEREIN AS THE BOARD MAY, FROM TIME TO TIME , DIRECT; (III) TO PERFORM OTHER FUNCTIONS AS MAY BE REQUIRED IN RELATION TO THE SUPERINTENDENCE, DIRECTION AND CONTROL OF MARKETS, OR FOR REGULATING AND CONTROL OF MARKETS, OR FOR REGULATING THE MARKE T AREA AND FOR PURPOSES CONNECTED WITH THE MATTERS AFORESAID, AND THIS PURPOSE, MAY BE EXERCISE SUCH POWERS AND PERFORM SUCH DUTIES AND DISCHARGE SUCH FUNCTIONS AS MAY BE PROVIDED BY OR U NDER THIS ACT. (2) WITHOUT PREJUDICE TO THE GENERALITY OF THE FORE GOING PROVISIONS, A MARKETING COMMITTEE MAY - (A) REGULATE THE ENTRY OF THE PERSONS AND OF VEHICULAR TRAFFIC INTO THE MARKET; (B) SUPERVISE THE CONDUCT OF THOSE WHO ENTER THE MARKET FOR TRANSACTING BUSINESS; (C) GRANT, RENEW, REFUSE SUSPEND OR CANCEL LICENSES ; (D) PROVIDE FOR SETTING DISPUTES ARISING OUT OF ANY KIN D OF TRANSACTION CONNECTED WITH THE MARKETING OF NOTIFI ED AGRICULTURAL PRODUCE AND ALL MATTERS ANCILLARY THER ETO; (E) PROSECUTE PERSONS FOR VIOLATING THE PROVISIONS OF THIS ACT AND TO THE RULES REGULATIONS AND BYE-LAWS MADE THERE UNDER ; (F) MAINTAIN AND MERGE THE MARKET, INCLUDING THE R EGULATION OF ADMISSIONS TO, AND CONDITIONS FOR USE OF THE MARKET ; (G) REGULATE THE MARKETING OF NOTIFIED AGRICULTURA L PRODUCE IN THE MARKET AREA AND THE MARKET, AND THE WEIGHMENT, DELI VERY OF AND PAYMENT FOR, SUCH AGRICULTURAL PRODUCE; EXPLANATION - FOR THE PURPOSES OF CLAUSE (G) THE WO RD REGULATE' SHALL INCLUDE - ITA 4187 TO 4189/D/2016 11 (I) MAKING, CARRYING OUT, ENFORCING OR CANCELLING OF AN Y CONTRACT OF SALE OF A NOTIFIED AGRICULTURAL PRODUCE ; (II) CONDUCTING OR SUPERVISING OF A TRANSACTION OF SALE OR PURCHASE OF A NOTIFIED AGRICULTURAL PRODUCE IN ACCORDANCE WI TH THE PROCEDURE LAID DOWN UNDER THIS ACT, OR RULES, REGULATIONS AND BYE-LAWS MADE THERE UNDER; (III) SPECIFYING ANY PLACE OR SPOT WHERE A NOTIFIED AGRI CULTURAL PRODUCE SHALL STORED OR DISPLAYED FOR PURPOSE OF SA LE BY OPEN AUCTION ; (IV) FIXING THE TIME FOR HOLDING AUCTION; AND (V) CANCELLING AN AUCTION IF IT IS NOT HELD IN THE PRES ENCE OF THE EMPLOYEES OF THE MARKETING COMMITTEE. (H) ARRANGE FOR THE COLLECTION - (I) OF SUCH NOTIFIED AGRICULTURAL PRODUCE IN THE MARKET IN WHICH ALL TRADE THEREIN IS TO BE CARRIED ON EXCLUSIVELY BY TH E GOVERNMENT BY OR UNDER ANY LAW FOR THE TIME BEING IN FORCE FOR TH AT PURPOSES, OR (II) OF SUCH OTHER NOTIFIED AGRICULTURAL PRODUCE IN THE MARKET AS THE GOVERNMENT MAY, FROM TIME TO TIME NOTIFY IN THE OFFICIAL GAZETTE. ACQUIRE, HOLD AND DISPOSE OF ANY MOVABLE OR IMMOVAB LE PROPERTY (INCLUDING ANY EQUIPMENT) NECESSARY FOR THE PURPOSE OF EFFICIENTLY CARRYING OUT ITS DUTIES ; (J) COLLECT, MAINTAIN, DISSEMINATE AND SUPPLY INFOR MATION IN RESPECT OF PRODUCTION, SALE, STORAGE, PROCESSING, PRICES AN D MOVEMENT OF NOTIFIED AGRICULTURAL PRODUCE (INCLUDING INFORMATIO N RELATING TO CROP- STATISTICS AND MARKET INTELLIGENCE) AS MAY BE REQUI RED BY THE DIRECTOR OR THE BOARD; ITA 4187 TO 4189/D/2016 12 (K) TAKE ALL SUCH STEPS TO PREVENT ADULTERATION AN D TO PROMOTE GRADING AND STANDARDIZATION OF SUCH AGRICULTURAL PR ODUCE, AS MAY BE PRESCRIBED; (L) ENFORCE THE PROVISIONS OF THIS ACT AND OF THE RULES, REGULATIONS AND BYE- LAW MADE THERE UNDER INCLUDING THE CONDITI ONS OF THE LICENSES GRANTED, UNDER THIS ACT (M) PERFORM SUCH OTHER DUTIES AS MAY BE PRESCRIBED ; (N) ARRANGE TO OBTAIN FITNESS CERTIFICATE OF HEALT H FROM A VETERINARY DOCTOR IN RESPECT OF ANIMALS, CATTLE OR BIRDS BROUG HT FOR SALE OF SOLD IN THE MARKET/SUB-MARKET; (O) DISSEMINATE INFORMATION ABOUT THE BENEFITS OF REGULATION, THE SYSTEM OF TRANSACTION, FACILITIES PROVIDED IN THE M ARKET YEAR, ETC. MEAN AS POSTERS, PAMPHLETS, HOARDING, CINEMA SLIDES , FILM SHOWS, GROUP MEETINGS, ETC., OR THROUGH ANY OTHER MEANS CO NSIDERED BY IT MORE EFFECTIVE OR NECESSARY; (P) ENSURE PAYMENT IN RESPECT OF TRANSACTION WHICH TAKES PLACE IN A MARKET TO BE MADE TO BE MADE ON THE SAME DAY TO T HE SELLER, AND IN DEFAULT THEREOF TO SEIZE THE AGRICULTURAL PRODUC E IN QUESTION ALONG WITH OTHER PROPERTY OF THE COMMISSION AGENT OR PURC HASER IF NO COMMISSION AGENT IS INVOLVED IN THE TRANSACTION ; (Q) MAKE ARRANGEMENT FOR WEIGHMEN PALLEDARS FOR WEI GHING AND TRANSPORTING OF GOODS IN RESPECT OF TRANSACTIONS HE LD IN THE MARKET YARD/SUB-YARD; (R) RECOVER THE CHARGES IN RESPECT OF WEIGHMEN AND PALLEDARS AND DISTRIBUTE THE SAME TO WEIGHMEN AND PALLEDARS I F NOT PAID BY THE PURCHASER OR SELLER, AS THE CASE MAY BE. ITA 4187 TO 4189/D/2016 13 5.4 FROM THE ABOVE, IT IS CLEAR THAT THE MAIN FUNC TION OF THE MARKETING COMMITTEE IS TO FACILITATE FREE AND FAIR TRADE OF THE AGRICULTURAL PRODUCE AND NOT TO UNDERTAKE TRADING O N THIS OWN BEHALF. IT HAS TO PROVIDE A PLACE WHERE THE PRODUCE R AND THE CONSUMERS CAN MEET AND TRADE FREELY. THE COMMITTEE IS ENTITLED TO A FEE FOR THE SERVICE RENDERED. IT IS RECOVERED FRO M THE COMMISSION AGENTS WHO UNDERTAKE THE TRADING ON BEHALF OF THE P URCHASER AND THE SELLER. THE ASSESSEE HAS BEEN APPOINTED U/S 35 OF THE DAPM ACT TO FACILITATE TRADING IN FISH POULTRY, EGGS ETC . THE COMPOSITION OF COMMITTEE IS APPROVED BY THE LT. GOVERNOR OF DEL HI & HAS BEEN NOTIFIED IN THE DELHI GAZETTE, NCTD NO. 200 DATED 3 1.08.2001. 5.5 IT IS SEEN THAT THE ASSESSING OFFICER, WHILE R EJECTING THE CLAIM OF THE ASSESSEE, HAS BEEN GUIDED BY THE FACT THAT THE ASSESSEE IS DEALING IN FISH, POULTRY EGGS AND NOT A GRICULTURAL PRODUCE. AS PER THE ASSESSING OFFICER, THE ASSESSEE SHOULD BE ENGAGED IN THE MARKETING OF ANYTHING PRODUCED FROM THE USE OF LAND WHICH SHOULD FALL IN THE DEFINITION OF WORD AG RICULTURE AS DEFINED IN SECTION 2(1A) OF THE ACT. HE HAS DEALT W ITH VARIOUS CASE LAWS RELATING TO THE DEFINITION OF AGRICULTURAL INC OME. HE HAS ALSO DRAWN REFERENCE TO THE SPEECH OF THE UNION FINANCE MINISTER THAT THE EXEMPTION U/S 10(26AAB) IS TO BE GIVEN TO ONLY APMC OR STATE ITA 4187 TO 4189/D/2016 14 AGRICULTURAL MARKET BOARDS BESIDES THE EXEMPTION EX TENDED TO THE COIR BOARD WITH RETROSPECTIVE EFFECT FROM 2012. 5.6 IT IS A FACT THAT THE WORD AGRICULTURAL PRODU CE HAS NOT BEEN DEFINED UNDER THE INCOME TAX ACT. THE ASSESSIN G OFFICER HELD THAT SINCE FISH, POULTRY AND EGGS DID NOT CONS TITUTE AGRICULTURAL COMMODITY IT COULD NOT FALL UNDER THE TERM OF AGRICULTURAL PRODUCE. HOWEVER, AT THIS JUNCTURE, IT IS IMPORTANT TO NOTE THE CONTEXT IN WHICH THE TERM AGRICULTURAL PRO DUCE HAS BEEN USED. IT HAS BEEN USED IN THE CONTEXT OF THE ACTIVI TIES OF APMC (FROM WHICH IT DERIVES INCOME) CONSTITUTED UNDER TH E DAPM FOR THE PURPOSE OF REGULATING AND MARKETING. IT IS THER EFORE, INCUMBENT TO SEE THE RELEVANT ACT WHICH EMPOWERS TH E COMMITTEE TO UNDERTAKEN THE REGULATING AND MARKETING OF COMMO DITIES. DELHI AGRICULTURAL PRODUCE MARKETING (REGULATION) A CT, 1998, DEFINES THE TERMS AGRICULTURAL PRODUCE AS UNDER: 2. DEFINITIONS - (1) IN THIS ACT, UNLESS THE CONTE XT OTHERWISE REQUIRES, (A) AGRICULTURE PRODUCE MEANS ALL PRODUCE AND COM MODITIES, WHETHER PROCESSED OR UNPROCESSED, OF AGRICULTURAL, HORTICULTURE, APICULTURE, VITICULTURE, PISCICULTURE, SERICULTURE, ANIMAL HUSBANDRY, FLEECES AND SKINS OF ANIMALS AND FOREST PRODUCTS AS ARE SPECIFIED IN THE SCHEDULE AND SUCH OTHER PRODUCE AS MAY BE DECLA RED BY THE ITA 4187 TO 4189/D/2016 15 GOVERNMENT BY NOTIFICATION TO BE AN AGRICULTURAL PR ODUCE AND ALSO INCLUDES ADMIXTURE OF TWO OR MORE OF SUCH PRODUCE. 5.7 THE SCHEDULE REFERRED TO ABOVE IS REPRODUCED AS UNDER I. ANIMAL HUSBANDRY PRODUCTS - II. APICULTURE 1. HONEY III. CATTLE FEEDS - IV. CEREALS V. CONDIMENTS, SPICES AND OTHERS - VI. FIBERS - VII. FRUITS - VIII. GRASS AND FODDER IX. GUR, SUGAR, SUGARCANE, KHANDSARI, SHAKHAR AND RASHK AT. X. NARCOTICS - TOBACCO XI. OILSEEDS - CASTOR SEED, COTTON SEED, SARSON, TORIA ETC. XII. PESCICULTURE - FISH XIII. PULSES - ARHAR, BEANS, GRAM, MOTH, MUNG, PEAS ETC. XIV. VEGETABLES - ARVI ANDARVI PATTA, CARROTS- ALL TYPES . ONION ETC. XV. HORTICULTURE - FLOWERS, CUT FLOWERS AND POTTED PLAN TS. XVI. FOREST PRODUCTS - BAMBOO, BAHEDA. GUM, HONEY, KAREL A, MAHUA FLOWERS 5.8 FROM A PLAIN READING OF THE DEFINITION, IT IS APPARENT THAT DAPM ACT DOES NOT RESTRICT THE CONSTITUTION OF COMMITTEE 1. EGGS 2. BUTTER 3. POULTRY 4. CATTLE MEAT 5. GHEE 6. GOAT MEAT 7. MILK & MILK ITA 4187 TO 4189/D/2016 16 ONLY FOR MARKETING OF AGRICULTURAL PRODUCE. IT HAS WITHIN ITS SCOPE VARIOUS OTHER COMMODITIES LIKE DECORATIVE PLA NTS PRODUCTION OF HONEY AND SILK ETC. IT ALSO INCLUDES THE MARKETING OF FOREST PRODUCTS WHICH WOULD OTHERWISE NOT FALL W ITHIN THE DEFINITION OF AGRICULTURE. THE DAPM ACT, THEREFO RE, HAS GIVEN VERY WIDE MEANING TO THE WORD AGRICULTURAL PRODUCT. APPARENTLY, INCOME TAX ACT HAS ALSO IMPORTED THE WORD AGRICULTU RAL PRODUCE FROM THE DAPM ACT, 1998 TO COVER APMCS NOTIFIED UND ER IT TO PROVIDE THE BENEFIT TO ALL APMCS PROVIDED IN THE DA PM ACT OR SIMILAR ACTS IN OTHER STATES. IT COULD NOT HAVE BE EN THE INTENTION OF THE ACT TO LEAVE OUT SOME OF THE COMMITTEES, NOT IFIED UNDER THE DAPM ESPECIALLY WHEN ALL THE COMMITTEES WERE RENDER ING SIMILAR SERVICES IN RESPECT OF VARIOUS PRODUCTS. THEREFORE, IN VIEW OF THE EXPANDED MEANING GIVEN TO THE TERM AGRICULTURAL PR ODUCE BY THE DAPM ACT, IT IS OUR CONSIDERED OPINION THAT THE WORD AGRICULTURAL PRODUCE, USED IN CONNECTION WITH APM C CONNOTES A VERY WIDE MEANING BRINGING WITHIN ITS PREVIEW A LAR GE GAMUT OF COMMODITIES BESIDES AGRICULTURAL PRODUCTS. SINCE TH E INCOME ACCRUES TO THE APMCS FROM PURSUING THESE ACTIVITIES , THE INCOME TAX ACT, ALSO PERCEIVES A WIDER MEANING BY REFERRIN G TO THE DAPM. THEREFORE, IF THE TERM AGRICULTURAL PRODUCE IS GIVEN A ITA 4187 TO 4189/D/2016 17 WIDER MEANING IN TERMS OF THE DEFINITION OF AGRICU LTURE PRODUCE AS DEFINED IN SECTION 2 (A) OF THE DAPM ACT AND AS SPECIFIED IN THE SCHEDULE OF THE SAID ACT, FISH, POULTRY AND EGG S WOULD ALSO BE COVERED UNDER THE DEFINITION OF AGRICULTURE PRODUC E AS THEY HAVE BEEN SPECIFIED IN THE SCHEDULE TO THE DAPM ACT. ON REACHING SUCH CONCLUSION, THE BENEFIT OF EXEMPTION U/S 10(26 AAB) WILL AUTOMATICALLY FOLLOW. THE LD. CIT (A) HAS ALSO REAC HED A SIMILAR CONCLUSION BY IMPORTING THE DEFINITION OF AGRICULT URE PRODUCE FROM THE DAPM ACT AND WE FIND HIS REASONING AND LOG IC TO BE PERFECTLY IN ORDER. THEREFORE, WE FIND NO REASON TO DIFFER WITH THE FINDINGS OF THE LD. CIT (A) AND WHILE UPHOLDING THE SAME, WE DISMISS THE GROUNDS RAISED BY THE REVENUE IN ALL TH E THREE YEARS UNDER APPEAL WHICH ARE IDENTICAL. 6. IN THE FINAL RESULT, ALL THE THREE APPEALS FILED BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31ST MAY, 201 9. SD/- SD/- (N.K. BILLAIYA) (SUDHANSHU SRI VASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31ST MAY ,2019 GS ITA 4187 TO 4189/D/2016 18 COPY FORWARDED TO: - 1) APPELLANT 2) RESPONDENT 3) CIT(A) 4) CIT 5) DR TRUE COPY BY ORDER ASSTT. REGISTRAR DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER