The DCIT, Circle-1(1), Guntur V. M/s Agricultural Market Committee, Duggirala

ITA 469/VIZ/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2866 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 14-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: G S S GOPINATH
• Keywords: Diversion of income

Judgement Text

PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM B EFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI B.R.BASKARAN, ACCOUNTANT MEMBER SL. NO. CASE NO. ASST. YEAR P.A.N.NO. APPELLANTS RESPONDENTS 1 ITA NO.461 / VIZ/2009 2006 - 07 AAAALA 0789 N THE DCIT, CIRCLE - 1(1) GUNTUR AGRICULTURAL MARKET COMMITTEE, PARUCHURU 2 ITA NO.462/VIZ/2009 2006 - 07 AAAALA 0307 M THE DCIT, CIRCLE - 1(1) GUNTUR AGRICULTURAL MARKET COMMITTEE, PIDUGURULLA 3 ITA NO 463 /VIZ/2009 2006 - 07 AAALA 03 93 M THE DCIT, CIRCLE - 1(1) GUNTUR AGRICULTURAL MARKET COMMITTEE, CHIRALA 4 ITA NO.464/VIZ/2009 2006 - 07 AAALA 0301 L THE DCIT, CIRCLE - 1(1) GUNTUR AGRICULTURAL MARKET COMMITTEE, SATTENAPALLI 5 ITA NO.465 /VIZ/2009 2006 - 07 AAALA 0414 G THE DCIT, CIRCLE - 1(1) GUNTUR AGRICULTURAL MARKET COMMITTEE, GUNTUR 6 ITA NO.466/VIZ/2009 2006 - 07 AAALA 4155 G THE DCIT, CIRCLE - 1(1) GUNTUR AGRICULTURAL MARKET COMMITTEE,KROSURU 7 ITA NO.467 /VIZ/2009 2006 - 07 AAALA 7492 L THE DCIT, CIRCLE - 1(1) GUNTUR AGRICULTURAL MARKET COMMITTEE, TENALI 8 ITA NO.468/VIZ/2009 2006 - 07 AAFKA 7492 G THE DCIT, CIRCLE - 1(1) GUNTUR AGRICULTURAL MARKET COMMITTEE, REPALLE 9 ITA NO. 469 /VIZ/2009 2006 - 07 AAALA 0422 G THE DCIT, CIRCLE - 1(1) GUNTUR AGRICULTURAL MARKET COMMITTEE, DUGGIRALA 10 ITA NO. 470 /VIZ /2009 2006 - 07 AAFLA 0410 C THE DCIT, CIRCLE - 1(1) GUNTUR AGRICULTU RAL MARKET COMMITTEE, BAPATLA 11 ITA NO. 480 /VIZ/2009 2006 - 07 AALA 0409 K THE DCIT, CIRCLE - 1(1) GUNTUR AGRICULTURAL MARKET COMMITTEE, NARASARAOPETA ASSESSEE BY : SHRI G.S.S. GOPINATH, DR REVENUE BY : SHRI G.V.N. HARI, CA ORDER PER BENCH: - THE APPEALS FILED AT THE INSTANCE OF THE RE VENUE ARE DIRECTED AGAINST THE ORDER OF THE LD CIT (A), GUNTUR PASSED AGAINST THE QUANTUM A SSESSMENTS RELATING TO ASSESSMENT YEAR 2006-07. 2. THOUGH THE REVENUE HAS RAISED SEVERAL GROUNDS, T HE ONLY ISSUE THAT EMERGES IS WHETHER THE LD CIT (A) IS RIGHT IN HOLDING THAT THE SECTION 10(26AAB) IS RETROACTIVE IN PAGE 2 OF 3 OPERATION AND THEREBY THE INCOME OF THESE ASSESSEES ARE EXEMPT U/S 10(26AAB) OF THE ACT. 3. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE RECORD. FOR THE SAKE OF CONVENIENCE WE EXTRACT THE OPERATIVE PART OF THE OR DER OF THE LD CIT (A). . WE ARE LEFT FOR CONSIDERATION WITH ONLY TWO ISSUES (I) WHETHER INSERTION OF SUB-CLAUSE (26AAB) OF SECTION 10 OF TH E INCOME TAX ACT WAS A DECLARATORY ACT TO REMOVE DOUBTS EXISTING WIT H REGARD TO THE EFFECT OF PRE-EXISTING STATUTE AND HENCE IT IS RETR OSPECTIVE IN OPERATION; AND (II) WHETHER THE IMPUGNED EXPENDITURE IN THE FO RM OF CONTRIBUTION TO NEERU MEERU ETC., AND THE MANDATORY PAYMENT TO THE CENTRAL MARKET FUND UNDER SEC.16/26 OF THE MARKET COMMITTEE ACT CAN BE CONSIDERED AS AMOUNTS INCURRED FOR THE OBJECT OF TH E AMCS UNDER SEC.36(1)(XII) OF THE INCOME TAX ACT OR WHETHER THE INCOME AS SUCH CAN BE TREATED AS FALLING OUTSIDE THE KEN OF TAXATI ON ON THE PRINCIPLE AND DIVERSION OF INCOME BY OVERRIDING TITLE . SINCE WE ARE OF THE VIEW THAT THE PROVISIONS OF SECTION 10(26AAB) OF THE INCOME TAX ACT ARE INTENDED TO BE RETROACTIV E IN OPERATION, HAVING BEEN INSERTED IN THE STATUTE BOOK WITH A VIE W TO CLARIFY THE POSITION OF AMCS EVEN UNDER PRE-EXISTING STATUTE, A ND THE FINANCE MINISTER HAVING SPECIFICALLY MENTIONED, WHILE REPLY ING TO THE DEBATE IN THE LOK SABHA, THAT THERE IS NO INTENTION TO TAX AM CS, THE ENTIRE FEE/INCOME COLLECTED/RECEIVED HAS TO BE CONSIDERED AS EXEMPT FROM THE LEVY OF TAX IN WHICH EVEN THE DECISION ON THE ANCIL LARY ISSUE IS OF ACADEMIC IMPORTANCE AND THUS NEED NOT BE GONE INTO 5. FOLLOWING THE ITATS DECISION THAT SEC.10(26AAB) HAS RETROSPECTIVE APPLICATION, THE INCOME OF THE AMCS IS HELD TO BE E XEMPT FOR THE A.Y 2006-07 ALSO AND THE APPEAL IS ALLOWED. 4. WE NOTICE THAT THE LD CIT(A) HAS FOLLOWED THE DECISION RENDERED BY THIS BENCH ON THE INSTANT ISSUE. IN A BATCH OF APPEALS, I.E., IN I.T.A.NO.90/VIZAG/2007 AND BATCH, I.T.A.T., VISAKHAPATNAM BENCH, VIDE ORDER DT.28.11. 2008, HELD THAT THE INCOME OF THE AGRICULTURAL MARKET COMMITTEES IS EXEMPT UNDER SECT ION 10(26AAB) OF THE ACT. THE DECISION RENDERED IN THAT CASE IS EXTRACTED BELOW: HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WE ARE OF THE FIRM VIEW THAT THE INSERTION OF SUB-CLAUSE (26AAB) TO SE CTION 10 OF THE INCOME TAX ACT IS ESSENTIALLY INTENDED TO DECLARE T HE INTENTION OF THE LEGISLATURE OF NOT TAXING THE INCOME OF AMCS CONSTI TUTED UNDER ANY LAW FOR THE TIME BEING IN FORCE FOR THE PURPOSES OF REGULATING THE MARKETING OF AGRICULTURAL PRODUCE AND HENCE IT HAS TO BE TREATED AS RETROACTIVE IN OPERATION AND APPLICABLE EVEN FOR TH E PRIOR YEARS, WE ORDER ACCORDINGLY. PAGE 3 OF 3 5. SINCE THE LD CIT(A) HAS FOLLOWED THE DECISIO N RENDERED BY THIS BENCH, WE DO NOT FIND ANY REASON TO INTERFERE WITH HIS ORDER. 6. IN THE RESULT, THE APPEALS FILED BY THE REVE NUE ARE DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEES ARE ALLOWED. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 17-12- 2009 SD/- SD/- (SUNIL KUMAR YADAV) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE: 17 TH DECEMBER, 2009 COPY TO 1. THE DCIT, CIRCLE-1(1), GUNTUR 2. AGRICULTURAL MARKET COMMITTEE, PARUCHURU 3. AGRICULTURAL MARKET COMMITTEE, PIDUGURULLA 4. AGRICULTURAL MARKET COMMITTEE, CHIRALA. 5. AGRICULTURAL MARKET COMMITTEE, SATTENAPALLI 6. AGRICULTURAL MARKET COMMITTEE, GUNTUR 7. AGRICULTURAL MARKET COMMITTEE, KROSURU 8. AGRICULTURAL MARKET COMMITTEE, TENALI 9. AGRICULTURAL MARKET COMMITTEE, REPALLE 10. AGRICULTURAL MARKET COMMITTEE, DUGGIRALA 11. AGRICULTURAL MARKET COMMITTEE, BAPATLA. 12. THE COMMISSIONER OF INCOME TAX (APPEALS) GUNTUR 13.THE COMMISSIONER OF INCOME TAX, GUNTUR 14.THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., VISAK HAPATNAM 15. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM