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

ITA 563/VIZ/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0851 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 29-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBRATA SARKAR
• 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.562/VIZ/2009 2007-08 AAFKA7492G DCIT, CIRC LE-1(1), GUNTUR AGRICULTURAL MARKET COMMITTEE, CHENCHUPET 2 ITA NO.563/VIZ/2009 2007-08 AAFKA 4155G DCIT, CIRCLE-1(1), GUNTUR AGRICULTURAL MARKET COMMITTEE, KROSURU 3 ITA NO.564/VIZ/2009 2007-08 AAALA0307M DCIT, CIRC LE-1(1), GUNTUR AGRICULTURAL MARKET COMMITTEE, PIDUGURALLA 4 ITA NO.565/VIZ/2009 2007-08 AAALA0422 G DCIT, CIRCLE-1(1), GUNTUR AGRICULTURAL MARKET COMMITTEE, DUGGIRALA 5 ITA NO.566/VIZ/2009 2007-08 AAALA0393 A DCIT, CIRCLE-1(1), GUNTUR AGRICULTURAL MARKET COMMITTEE, PAPARAJUTHOTA 6 ITA NO.567/VIZ/2009 2007-08 AAALA0410 C DCIT, CIRCLE-1(1), GUNTUR AGRICULTURAL MARKET COMMITTEE, GUNTUR 7 ITA NO.568/VIZ/2009 2007-08 AAALA0411 D DCIT, CIRCLE-1(1), GUNTUR AGRICULTURAL MARKET COMMITTEE, PONNURU 8 ITA NO.569/VIZ/2009 2007-08 AAALA0466Q DCIT, CIRC LE-1(1), GUNTUR AGRICULTURAL MARKET COMMITTEE, REPALLE 9 ITA N O.570/VIZ/2009 2007-08 AAALA 0414G DCIT, CIRCLE-1(1), GUNTUR AGRICULTURAL MARKET COMMITTEE, BAPATLA 10 ITA NO.571/VIZ/2010 2007-08 AAALA 0301L DCIT, CIRCLE-1(1), GUNTUR AGRICULTURAL MARKET COMMITTEE, SATTHENAPALLI 11 ITA NO.572/VIZ/2009 2007-08 AAALA 0301L DCIT, CIRCLE-1(1), GUNTUR AGRICULTURAL MARKET COMMITTEE, PARCHURU APPELLANT BY : SHRI SUBRATA SARKAR, CIT-DR RESPONDENTS BY : SHRI G.V.N. HARI, CA ORDER PER BENCH: - THE APPEALS FILED AT THE INSTANCE OF THE REVENUE AR E DIRECTED AGAINST THE ORDER PASSED BY THE LD CIT (A) IN THE RESPECTIVE HA NDS OF THE ASSESSEE STATED ABOVE FOR THE ASSESSMENT YEAR 2007-08. 2. THOUGH THE REVENUE HAS RAISED SEVERAL GROUNDS, T HE ONLY ISSUE THAT EMERGES IS WHETHER THE LD CIT (A) IS RIGHT IN HOLD ING THAT THE SECTION 10(26AAB) PAGE 2 OF 3 IS RETROACTIVE IN 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. WE NOTICE THAT LD CIT(A) HAS FOLLOWED THE DECISION RENDERED B Y THIS BENCH ON IDENTICAL ISSUES. LD CIT(A) HAS EXTRACTED THE FOLLOWING OBSE RVATIONS MADE BY THIS BENCH OF ITAT . WE ARE LEFT FOR CONSIDERATION WITH ONLY TWO ISSUES (I) WHETHER INSERTION OF SUB-CLAUSE (26AAB) OF SECTION 10 OF THE INCOME TAX ACT WAS A DECLARATORY ACT TO REMOVE DOUBT S EXISTING WITH REGARD TO THE EFFECT OF PRE-EXISTING STATUTE A ND HENCE IT IS RETROSPECTIVE IN OPERATION; AND (II) WHETHER THE IM PUGNED EXPENDITURE IN THE FORM OF CONTRIBUTION TO NEERU M EERU ETC., AND THE MANDATORY PAYMENT TO THE CENTRAL MARKET FUN D UNDER SEC.16/26 OF THE MARKET COMMITTEE ACT CAN BE CONSID ERED AS AMOUNTS INCURRED FOR THE OBJECT OF THE AMCS UNDER S EC.36(1)(XII) OF THE INCOME TAX ACT OR WHETHER THE INCOME AS SUCH CAN BE TREATED AS FALLING OUTSIDE THE KEN OF TAXATION ON T HE PRINCIPLE AND DIVERSION OF INCOME BY OVERRIDING TITLE . SINCE WE ARE OF THE VIEW THAT THE PROVISION S OF SECTION 10(26AAB) OF THE INCOME TAX ACT ARE INTENDED TO BE R ETROACTIVE IN OPERATION, HAVING BEEN INSERTED IN THE STATUTE B OOK WITH A VIEW TO CLARIFY THE POSITION OF AMCS EVEN UNDER PRE -EXISTING STATUTE, AND THE FINANCE MINISTER HAVING SPECIFICAL LY MENTIONED, WHILE REPLYING TO THE DEBATE IN THE LOK SABHA, THAT THERE IS NO INTENTION TO TAX AMCS, THE ENTIRE FEE/INCOME COLLEC TED/RECEIVED HAS TO BE CONSIDERED AS EXEMPT FROM THE LEVY OF TAX IN WHICH EVEN THE DECISION ON THE ANCILLARY ISSUE IS OF ACAD EMIC IMPORTANCE AND THUS NEED NOT BE GONE INTO 4. 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 BEL OW: HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WE ARE OF THE FIRM VIEW THAT THE INSERTION OF SUB-CLAUSE (26AAB) TO SECTION 10 OF THE INCOME TAX ACT IS ESSENTIALLY INTENDED TO DECLARE THE INTENTION OF THE LEGISLATURE OF NOT TAXING THE INCO ME OF AMCS CONSTITUTED UNDER ANY LAW FOR THE TIME BEING IN FOR CE FOR THE PURPOSES OF REGULATING THE MARKETING OF AGRICULTURA L PRODUCE AND HENCE IT HAS TO BE TREATED AS RETROACTIVE IN OP ERATION AND APPLICABLE EVEN FOR THE PRIOR YEARS, WE ORDER ACCOR DINGLY. 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. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 27-4-2010 SD/- SD/- (SUNIL KUMAR YADAV) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE: 27 TH APRIL, 2010 COPY TO 1. THE DCIT, CIRCLE-1(1), GUNTUR 2. AGRICULTURAL MARKET COMMITTEE, CHENCHUPET 3. AGRICULTURAL MARKET COMMITTEE, KROSURU 4. AGRICULTURAL MARKET COMMITTEE, PIDUGURALLA 5. AGRICULTURAL MARKET COMMITTEE, DUGGIRALA 6. AGRICULTURAL MARKET COMMITTEE, PAPARAJUTHOTA 7. AGRICULTURAL MARKET COMMITTEE, BAPATLA 8. AGRICULTURAL MARKET COMMITTEE, PONNURU 9. AGRICULTURAL MARKET COMMITTEE, REPALLE, 10. AGRICULTURAL MARKET COMMITTEE, SATTHENAPALLI, 11. AGRICULTURAL MARKET COMMITTEE, PARCHURU 12. THE COMMISSIONER OF INCOME-TAX (APPEALS), VISAKHAPAT NAM 9. THE COMMISSIONER OF INCOME TAX, VISAKHAPATNAM 10. THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., VISA KHAPATNAM 11. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM