M/s Krishi Upaj Mandi Samiti, V. The I T O, Khargone

ITA 503/IND/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2937 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-04-2010
• Assessment Year: 1998-1999
• Appeal Filed On: 16-12-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN

Judgement Text

PAGE 1 OF 4 - I.T.A.NO. 503/IND/2008 - KUMS, SHEGAON IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : AAALK0741L I.T.A.NO.503/IND/2008 A.Y. : 2004-05 KRISHI UPAJ MANDI SAMITI, SHEGAON INCOME TAX OFFICER, KHARGONE VS APPELLANT RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SMT.APARNA KARAN, SR.DR DATE OF HEARING : 20.04.2010 O R D E R PER V.K. GUPTA, A.M. THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF ORD ER OF THE LD. CIT(A)-II, INDORE, DATED 07.08.2008, FOR THE ASSESS MENT YEAR 2004-05. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, HENCE, WE PROCEED TO DECIDE THE APPEAL EX PARTE AFTER HEARING THE LD. DE PARTMENTAL REPRESENTATIVE. 3. THERE IS A DELAY OF 24 DAYS. HOWEVER, CONSIDERING T HE FACT THAT THE ASSESSEE IS A GOVERNMENT BODY AND DELAY IS OF V ERY NOMINAL, HENCE, WE CONDONE THE DAME AND ADMIT THIS APPEAL FOR ADJUD ICATION. PAGE 2 OF 4 - I.T.A.NO. 503/IND/2008 - KUMS, SHEGAON 4. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE D ECISION OF THE LD. CIT(A) IN CONFIRMING THE ACTION OF THE A.O. FOR LEVYING THE PENALTY U/S271(1)(C) OF THE INCOME-TAX ACT, 1961. 5. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE FILED RE TURN OF INCOME, WHEREIN CERTAIN EXPENSES OF CAPITAL NATURE AND SOME EXPENSES WHICH WERE OTHERWISE NOT ALLOWABLE FOR EXAMPLE INCOME TAX PAID BY THE ASSESSEE, CONTRIBUTION TO RESERVE FUND AND REPAYMENT OF LOAN AMOUNT WERE CLAIMED AS AN EXPENDITURE. THE A.O. DISALLOWED THE SAME AND THE LD. CIT(A) ALSO CONFIRMED THE SAME. THEREAFTER, THE A.O. INITIATED PENALTY PROCEEDINGS, WHEREIN THE ASSESSEE SUBMITTED THAT SINCE FROM THE BEGINNING LOAN RECEIVED SO CONSIDERED AS INCOME AND, THEREFORE, RE PAYMENT OF SUCH LOAN WAS CONSIDERED AS EXPENDITURE. AS REGARD, AMOUNT TR ANSFERRED TO RESERVE FUND, IT WAS CONTENDED THAT THESE FUNDS WERE CREATE D AS PER THE ACT, HENCE, THE AMOUNT SPENT WAS TREATED AS EXPENDITURE. THE A.O., HOWEVER, LEVIED PENALTY U/S 271(1)(C) OF THE ACT, AS HE WAS OF THE OPINION THAT THE ASSESSEE AS FURNISHED INACCURATE PARTICULARS OF INC OME. THE ASSESSEE BEING AGGRIEVED, PREFERRED APPEAL BEFORE THE LD. CIT(A), WHEREIN IT WAS CONTENDED THAT THE CONTRIBUTION TOWARDS RESERVE FUN D WAS A MISNOMER RATHER IT REPRESENTED CONTRIBUTION TOWARDS PENSION FUND FOR THE EMPLOYEES OF THE MANDI BOARD. HENCE, IT WAS ALLOWABLE AS AN E XPENDITURE. AS REGARD TO OTHER TWO ITEMS, IT WAS CONTENDED THAT IT WAS SU CH CLAIMS WERE MADE PAGE 3 OF 4 - I.T.A.NO. 503/IND/2008 - KUMS, SHEGAON INADVERTENTLY WITHOUT ANY MALA FIDE INTENTION, HENC E, THE PENALTY THEREON SHOULD NOT HAVE BEEN LEVIED. THE LD. CIT(A), HOWEVE R, CONFIRMED THE ACTION OF THE A.O. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. DEPARTMENTAL REPRESENTATIVE NARRATED THE FA CTS AND PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT( A). 7. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY THE LD. DEPARTMENTAL REPRESENTATIVE , MATERIAL ON RECORD AN D THE ORDERS OF THE AUTHORITIES BELOW. 8. THE ASSESSEE IS A MANDI SAMITI, WHICH WAS ENTITLED FOR EXEMPTION U/S 10(20) OF THE ACT TILL ASSESSMENT YEA R 2003-04 AND IT IS ONLY THE SECOND YEAR OF FILING OF RETURN. IT IS ALS O TO BE NOTED THAT ASSESSEE SAMITI IS MAINTAINING BOOKS OF ACCOUNT ON RECEIPT A ND PAYMENT BASIS AND THE RETURN OF INCOME HAS BEEN FILED ACCORDINGLY. IN THIS PROCESS, THE ASSESSEE SAMITI HAS CLAIMED INCOME TAX LIABILITY AS EXPENDITURE AND REPAYMENT OF LOAN HAS ALSO BEEN GIVEN THE SAME TREA TMENT. HOWEVER, THE FACT REMAINS THAT IT BEING A GOVERNMENT BODY AND NO PERSONAL GAIN/ADVANTAGE CAN BE OBTAINED AND IN VIEW OF THE O THER FACTS STATED HEREINBEFORE, WE ARE OF THE VIEW THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. BEFORE PARTING, W E MAY ALSO ADD THAT IN RESPECT OF AMOUNT TRANSFERRED TO RESERVE FUND, THE PENALTY CANNOT BE LEVIED AS THE SAME CANNOT DISALLOWED EVEN. PAGE 4 OF 4 - I.T.A.NO. 503/IND/2008 - KUMS, SHEGAON 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 22 ND APRIL, 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :22 ND APRIL, 2010. CPU* 20214