ITO, BARAN V. KRISHI UPAJ MANDI SAMITI, BARAN

ITA 436/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5541 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 29-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT DHK
• Assessee Lawyers: ADITYA VIJAY
• Keywords: Capital asset; Depreciation; Charitable institution; Capital expenditure
• Section: 143(3); 12AA; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO. 436/JP/ 13 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER, BARAN CUKE VS. M/S KRISHI UPAJ MANDI SAMITI, BARAN LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAALK 0391 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI ADITYA VIJAY (ADVOCATE.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 19/01 /2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 04/02/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), KOTA DATED 28.02.2013 WHEREIN THE REVENUE HAS CHALLENGED THE DELETION OF PENALTY U/S 271(1)(C) OF THE ACT LEVIED BY THE ASSESSING OFFICE R AMOUNTING TO RS.26,67,197/-. 2. THE ASSESSEE HAD FILED ITS RETURN OF INCOME DECL ARING INCOME AT RS. NIL. THIS WAS ASSESSED U/S 143(3) OF THE ACT FOR A TOTAL INCO ME OF RS. 5,51,21,536/-. ITA NO. 436/JP/13 ITO, BARAN VS. M.S KRISHI UPAJ MANDI SAMITI, BARAN 2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS PENALTY U/S 271(1)(C) WAS INITIATED AND SUBSEQUENT LEVIED ON 24.03.2011 LEVING THE PENA LTY OF RS.26,6,197/-. 2.1 AT THE OUTSET THE LD. AR SUBMITTED THAT THE HON BLE ITAT HAD DIRECTED TO GRANT REGISTRATION U/S 12AA OF THE ACT. FURTHER IN THE QUANTUM APPEAL FOR THE SUBJECT ASSESSMENT YEAR, THE MATTER HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. 2.2 WE ARE PERUSED THE ORDER OF THE COORDINATE BENC H IN ITA NO.561/JP/2010 DATED 06.01.2011 FOR A.Y. 2007-08 WHEREIN THE COO RDINATE BENCH HAD STATED THAT IF THE EXPENSE ARE INCURRED BY THE SAMITI FOR THE PURPOSES OF ACHIEVING THE OBJECT AS MENTIONED IN RAMP ACT THEN THESE ARE ALLOW ABLE. THE RELEVANT FINDINGS OF THE COORDINATE BENCH CONTAINED AT PARA 2.5 OF IT S ORDER IS REPRODUCED AS UNDER: WE HAVE HEARD THE PARTIES. THERE IS NO DISPUTE T HAT IF THE EXPENSES ARE INCURRED BY THE SAMITI ARE FOR THE PURPOSE OF ACHIE VING THE OBJECTS AS MENTIONED IN RAMP ACT THEN THESE ARE ALLOWABLE. THE ONLY DISPUTE IS IN RESPECT OF DEPRECIATION. THE REVENUE IS CONTENDING THAT DEPRECIATION SHOULD NOT BE ALLOWED WHILE COMPUTING EXEMPTION U/S 11 OF THE ACT BECAUSE THE EXPENSES INCURRED FOR ACQUIRING CAPITAL ASSETS IS TREATED AS ALLOWED. FIRST ONE WILL HAVE TO CONSIDER THE APPLICABILITY OF SECT ION 11 OF THE ACT ON THE BASIS OF APPLICATION OF INCOME FROM THE RECEIPT. CHARITABLE INSTITUTION IS REQUIRED TO APPLY 85% OF THE RECEIPTS. THE CAPITAL EXPENDITURE INCURRED IS TO BE CONSIDERED AS APPLICATION OF INCOME. NOW SECOND STAGE COMES WHEN THE APPLICATION OF INCOME IS LESS THAN 85% OF THE RECEI PTS THEN THE INCOME FOR THE PURPOSE OF COMPUTATION WILL HAVE TO BE MADE ON THE BASIS OF COMMERCIAL PRINCIPLES AND THE DEPRECIATION IS TO BE ALLOWED. IN THE INSTANT CASE, THE REVENUE HAS NOT RECORDED THE FINDING THAT INCOME APPLIED IS LESS THAN 85% OF THE RECEIPTS. ITA NO. 436/JP/13 ITO, BARAN VS. M.S KRISHI UPAJ MANDI SAMITI, BARAN 3 2.3 GIVEN THAT THE QUANTUM ADDITIONS HAVE BEEN DELE TED, THE CONSEQUENT LEVY OF PENALTY CANNOT BE SUSTAINED IN T HE EYE OF LAW. HENCE THE GROUND TAKEN BY THE REVENUE IS DISMISSED. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 04 /02/2 016 SD/- SDE/- VKJ-IH-RKSYKUH FOE FLAG ;KNO (R.P.TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 04 / 0 /2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- THE INCOME TAX OFFICER, BARAN. 2. THE RESPONDENT- M/S KRISHI UPAJ MANDI SAMITI, BA RAN 3. THE CIT(A) , KOTA 4. THE CIT- KOTA 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO.436/JP/13) VKNS'KKUQLKJ@ BY ORDER, LGK; DIATHDKJ@ ASSISTANT. REGISTRAR. ITA NO. 436/JP/13 ITO, BARAN VS. M.S KRISHI UPAJ MANDI SAMITI, BARAN 4 SL. NO. DATE INITIAL 1 DATE OF DICTATION 2 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER OTHER MEMBER 3 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S 4 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. 6 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER 9 DATE OF DISPATCH OF THE ORDER