KRISHI UPAJ MANDI SAMITI, Jaipur V. ITO, Jaipur

ITA 55/JPR/2011

• Counselvise Citation: 5523114 RSA 2011
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA; VINOD JOHRI
• Keywords: Charitable institution
• Section: 194C

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.55/ JP/2011 ASSESSMENT YEAR 2009-10 TAN: JPRK 02474 D M/S. KRISHI UPAJ MANDI SAMITI VS. THE ITO SIKAR TDS -3, SIKAR C/O ANIL KUMAR SHARMA, CA 407, DBC COMPLEX, OPP. HOTEL GANGAUR NEAR PINK CITY PUMP, JAIPUR (APPELLANT ) (RESPONDENT) ITA NO.56/ JP/2011 ASSESSMENT YEAR 2009-10 TAN: JPRS 02260 E M/S. KRISHI UPAJ MANDI SAMITI VS. THE ITO CHOMU, JAIPUR TDS -3, JAIPUR C/O ANIL KUMAR SHARMA, CA 407, DBC COMPLEX, OPP. HOTEL GANGAUR NEAR PINK CITY PUMP, JAIPUR (APPELLANT ) (RESPONDENT) ITA NO.57 & 58/ JP/2011 ASSESSMENT YEAR 2009-10 & 2010-11 TAN: JPRK 02172 C M/S. KRISHI UPAJ MANDI SAMITI (F&V) VS. THE ITO MUHANA, JAIPUR TDS -3, JAIPUR C/O ANIL KUMAR SHARMA, CA 407, DBC COMPLEX, OPP. HOTEL GANGAUR NEAR PINK CITY PUMP, JAIPUR (APPELLANT ) (RESPONDENT) 2 ASSESSEE BY : SHRI ANIL SHARMA DEPARTMENT BY : SHRI VINOD JOHRI & SHRI D.K. MEE NA ORDER PER BENCH THE APPELLANTS HAVE FILED THE APPEALS AGAINST DIF FERENT ORDERS OF THE LD. CIT(A)-III, JAIPUR DATED 24-11-2010 FOR THE AS SESSMENT YEARS 2009-10 AND 2010-11 . 2.0 SINCE THE GROUNDS OF APPEAL ARE THE SAME IN ALL THE APPEALS, THEREFORE, THESE APPEALS ARE BEING DISPOSED OFF BY A SINGLE CO NSOLIDATED ORDER. THE COMMON GROUNDS OF APPEAL ARE AS UNDER:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE AO WHEREBY THE AO HAS HELD THE APPELLANT LIABLE FOR DE DUCTION OF TAX AT SOURCE U/S 194C OF INCOME TAX ACT, 1961 IN R ESPECT OF PAYMENT MADE TO RSAMB FOR CONSTRUCTION PROJECTS AND CONSEQUENTLY HELD THE APPELLANT LIABLE FOR TAX DEDU CTIBLE AND INTEREST OF RS. 602183/- U/S 201/201(1A) OF THE INC OME TAX ACT. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE AO WHEREBY THE AO HAS HELD THE APPELLANT LIABLE FOR DE DUCTION OF TAX AT SOURCE U/S 194J OF INCOME TAX ACT, 1961 IN R ESPECT OF PAYMENT MADE TO RSAMB TOWARDS STATUTORY CONTRIBUTIO N AND CONSEQUENTLY HELD THE APPELLANT FOR TAX DEDUCTIBLE AND INTEREST OF RS. 66909/- U/S 201/201(1A) OF THE INCOME TAX A CT. 3 2.1 THE FIRST ISSUE RAISED BEFORE US CAN BE DECIDED ON THE BASIS OF THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. KRISHI UPAJ MANDI SAMITI, GAJSINGHPUR & ORS. 227 CTR 79. I N THIS CASE, THE HON'BLE JURISDICTIONAL HIGH COURT HAD AN OCCASION T O CONSIDER AS TO WHETHER THE CONTRIBUTION MADE TO RAJASTHAN STATE AGRICULTUR AL MARKETING BOARD CAN BE CONSIDERED AS AN APPLICATION OF INCOME OR AN ADV ANCE. IF THE AMOUNT HAS NOT BEEN UTLISED BY THE BOARD THEN AS TO WHETHER TH E SAID AMOUNT CAN BE CONSIDERED AS NOT UTILISED BY KRISHI UPAJ MANDI SAM ITI. WHILE DECIDING THE ISSUE, THE HON'BLE JURISDICTIONAL HIGH COURT AT PAR A 16 AND 17 OF THE ORDER HAS HELD AS UNDER:- 16. FROM BARE PERUSAL OF THE VARIOUS PROVISIONS O F THE ACT OF 1961 AND THE RULES MADE THEREUNDER REFERRED HEREINBELOW. IT IS MANIFESTLY CLEAR THAT BOTH THE S TATUTORY BODIES I.E. THE MARKET COMMITTEE AND THE BOARD CONTROLLIN G AND MANAGING THE MARKET COMMITTEE FUND ARE UNDER AN OBL IGATION TO UTILIZE THE SAME FOR CARRYING OUT THE PURPOSES OF T HE ACT IN ACCORDANCE WITH THE GUIDELINES PRESCRIBED. THE MARK ETING COMMITTEE TAKES THE DECISION AS PER ITS OWN REQUIRE MENT FOR PROVIDING FACILITIES IN THE MARKET AREA SUCH AS SHE LTERS , SHEDS, PARKING ACCOMMODATION IN CONSTRUCTION AND REPAIR OF THE APPROACH ROADS, CULVERTS, BRIDGES ETC. AND ACCORDIN GLY PREPARES THE BUDGET AND SUBMITS THE SAME FOR SANCTION TO THE BOARD. IT IS THE BOARD WHICH IS LOOKING AFTER THE IMPROVEMENT AN D 4 REGULATION OF AGRICULTURAL MARKETS IN THE STATE. TH E WORKS OF PLANNING AND DEVELOPMENT OF INFRASTRUCTURE I.E. CON STRUCTION AND MAINTENANCE OF ROADS WITHIN THE MARKET AREA AN APPR OACH ROADS ETC. ARE EXECUTED AND CARRIED OUT BY THE BOARD. 17. IT IS NOT IN DISPUTE THAT THE AMOUNT GIVEN BY T HE ASSESSEE TO THE BOARD FOR SPECIFIC PURPOSE ON THE A PPROVAL OF THE PROJECT BY THEE STATE GOVT. THE LEARNED TRIBUNA L HAS RIGHTLY OBSERVED THAT THE AMOUNT GIVEN IS NOT A VOLUNTARY C ONTRIBUTION BY THE ASSESSEE BUT TOWARDS THE ACHIEVEMENT OF THE OBJECT SET OUT IN THE ACT FOR WHICH THE ASSESSEE CAME INTO EXI STENCE. IT IS NOT EVEN THE CASE OF THE REVENUE THAT THE ASSESSEE CAN CLAIM THE REFUND OF THE AMOUNT ONCE GIVEN TO THE BOARD SO AS TO EXECUTE AND CARRY OUT THE CONSTRUCTION WORK. ON THE FACTS A ND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED TRIBUNAL HAS RIGHTLY HELD THAT THE AMOUNT WHICH REMAINED UNUTILIZED CANNOT BE TREATED AS ADVANCE WHICH PRESUPPOSES EXISTENCE OF AN ELEMENT OF GETTING THE AMOUNT BACK IN CASE THE TERMS OF THE AGREEMENT ARE NOT COMPLIED WITH. SINCE THE AMOUNT ONCE GIVEN FOR A SP ECIFIC CHARITABLE PURPOSES BY THE MARKET COMMITTEE TO THE BOARD IS NOT REFUNDABLE AND THE ASSESSEE IS NOT IN POSITION TO ENSURE THAT THE AMOUNT IS SPENT WITHIN THE SAME YEAR AND ALSO CANNO T CALL BACK THE UNSPENT AMOUNT THEREFORE, SO FAR AS THE ASSESSE E IS CONCERNED, THE MAKING OF THE PAYMENT TO THE BOARD B Y ITSELF HAS TO BE TREATED AS APPLICATION. IN THIS VIEW OF THE MATTER, WE ARE IN COMPLETE AGREEMENT WITH FINDING ARRIVED AT BY TH E LEARNED TRIBUNAL RELYING UPON THE DECISION OF THE HON'BLE SUPREME COURT IN THE MATTER OF CIT VS. THANTHI TRUST (1999) 156 CTR 5 605: (1999) 239 ITR 502 (SC) THAT THE CREDITING OF THE AMOUNT IN THE ACCOUNT OF THE BOARD IS ENOUGH AND THE REVEN UE CANNOT INSIST THAT THE AMOUNT SO GIVEN BY THE ASSESSEE MUS T BE SPENT WITHIN A RELEVANT YEAR ONLY. IN OUR CONSIDERED OPIN ION, THE MARKET COMMITTEE HAVING PUT ITS INCOME TO USE IN CO NFORMITY WITH THE PROVISIONS OF THE ACT OF 1961 FOR CHARITAB LE PURPOSE, IT HAS TO BE TREATED AS THE APPLICATION OF THE INCOME FOR THE CHARITABLE PURPOSE IN THE RELEVANT YEAR. 2.2 IT HAS BEEN HELD THAT BY HON'BLE JURISDICTIONAL HIGH COURT THAT THE WORKS OF PLANNING AND DEVELOPMENT OF INFRASTRUCTURE I.E. CONSTRUCTION AND MAINTENANCE OF ROADS WITHIN THE MARKET AREA AND APP ROACH ROADS ETC. ARE EXECUTED AND CARRIED OUT BY THE BOARD. THUS THESE W ORKS ARE CARRIED OUT BY THE BOARDS AND NOT BY THE COMMITTEE. HENCE, SECTION 194C WILL NOT BE APPLICABLE IN THE CASE OF THE ASSESSEE. IT IS AN AG RICULTURAL MARKETING BOARD WHO IS EXECUTING AND CARRYING OUT THE WORKS. HENCE, THERE WAS NO REQUIREMENT OF MAKING DEDUCTION U/S 194C OF THE ACT BY THE ASSESSEE . 2.3 IN RESPECT OF CONTRIBUTION THE RAJASTHAN STATE AGRICULTURAL MARKETING BOARD, THE AO IS OF THE VIEW THAT THE TAX IS REQUIR ED TO BE DEDUCTED AT SOURCE U/S 194J OF THE ACT. THERE IS DIFFERENCE BETWEEN TH E FEES AND CONTRIBUTION. SEC 194J IS APPLICABLE WHEN A PERSON PAYS THE FEES FOR PROFESSIONAL OR TECHNICAL SERVICES. IF THERE IS A STATUTORY CONTRIB UTION, THEN IT IS NOT A FEE. 6 M/S. KRISHI UPAJ MANDI SAMITI HAS NO WRITTEN, ORAL OR IMPLIED CONTRACT WITH RSAMB FOR TECHNICAL SERVICES. HENCE, SECTION 194J I S NOT APPLICABLE. 2.4 BEFORE US, THE LD. AR SUBMITTED IN THE WRITTEN SUBMISSION THAT RSAMB IS DEDUCTING THE TAX AT SOURCE IN RESPECT OF PAYMENT GIVEN TO THE CONTRACTORS AND SECTION 194C IS COMPLIED WITH RSAMB . 2.5 AFTER HEARING BOTH THE PARTIES AND LOOKING TO T HE ABOVE DISCUSSIONS, WE HOLD THAT ASSESSEES BEFORE US WERE NOT REQUIRED TO DEDUCT THE TAX AT SOURCE IN RESPECT OF THE AMOUNTS PAYMENTS PAID TO RSAMB EITHER AS CONTRIBUTION OR FOR EXECUTION OF THE DEVELOPMENT WO RK. HENCE, THE APPEALS ARE ALLOWED. 3. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05-08 -2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 05/08/2011 *MISHRA COPY FORWARDED TO :- 1. KRISHI UPAJ MANDI, SIKAR 2. KRISHI UPAJ MANDI, CHOMU 3. KRISHI UPAJ MANDI SAMITI, MUHANA 4 THE LD. CIT BY ORDER 5. THE LD. CIT(A) 6 THE LD.DR 7 THE GUARD FILE (ITA NO.329/JP /11) 8. THE ITO , TDS -3, JAIPUR AR ITAT , JAIP UR 7