Agricultural Produce Market Committee, Shimoga V. CIT, Shimoga

ITA 652/BANG/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 1510 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-02-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 12-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRITA RANJAN
• Keywords: Depreciation; Charitable institution; Capital expenditure; Set aside; Capital Gains
• Section: 12A; 12AA; 32; 56; 12; 11

Judgement Text

ITA.652/BANG/2010 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'B', BANGALORE BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SMT. P. MADHAVI DEVI, JUDICIAL MEMBER I.T.A NO.652/BANG/2010 (ASSESSMENT YEAR : 2005-06) M/S. AGRICULTURAL PRODUCE MARKET COMMITTEE, SHIMOGA .. APPELLANT V. COMMISSIONER OF INCOME-TAX, DAVANGERE .. RESPONDENT APPELLANT BY : SMT. SHEETAL BORKAR, ADVOCATE RESPONDENT BY : SMT. AMRITA RANJAN, ADDL.CIT O R D E R PER DR. O. K. NARAYANAN, VICE PRESIDENT : THIS APPEAL IS FILED BY THE ASSESSEE. RELEVANT AS SESSMENT YEAR IS 2005-06. THE APPEAL IS DIRECTED AGAINST THE REV ISION ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX AT DAVANGERE, U/S.26 3 OF THE IT ACT, 1961, THROUGH HIS PROCEEDINGS DATED.26.03.2010. 02. THE ASSESSEE IS A MARKET COMMITTEE ESTABLISHED U/S.4 OF THE KARNATAKA AGRICULTURAL PRODUCE MARKETING (REGULATIO N) ACT, 1966. THE ASSESSEE IS REGISTERED U/S.12A OF THE IT ACT. THE RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR 2005-06 WAS FILED BY THE ASSESSEE IN ITA.652/BANG/2010 PAGE - 2 THE STATUS OF A TRUST AND THEREBY CLAIMING EXEMPTIO N U/S.11 OF THE IT ACT. 03. THE RETURN WAS INITIALLY PROCESSED U/S.143(1) A ND LATER ON ASSESSED U/S.143(3) OF THE IT ACT. THEREAFTER THE COMMISSIONER OF INCOME-TAX AT DAVANGERE EXAMINED THE RECORDS OF THE CASE. HE FOUND THAT THE ASSESSEE COMMITTEE HAS DEDUCTED A SUM OF ` .2,26,57,709/- AS DEPRECIATION IN ITS INCOME AND EXPENDITURE ACCOUNT. HE FOUND THAT EARLIER THE ASSESSEE WAS ENJOYING THE BENEFIT OF 'L OCAL AUTHORITY' AND ITS INCOME WAS EXEMPT U/S.10(20) OF THE ACT. WHEN AMENDMENTS WERE BROUGHT TO SECTIONS 10(20) AND 10(29) BY THE FINANC E ACT, 2002, W.E.F.01.04.2003, RELEVANT TO THE ASSESSMENT YEAR 2 003-04, THE ASSESSEE HAS BEEN KEPT OUTSIDE THE PURVIEW OF SECTI ONS 10(20) AND 10(29). UNDER THESE CIRCUMSTANCES, THE ASSESSEE OB TAINED A CERTIFICATE OF REGISTRATION U/S.12AA OF THE IT ACT, 1961 W.E.F. 01.04.2002. AS THE ASSESSEE IS REGISTERED AS A CHARITABLE TRUST, THE C OMMISSIONER OBSERVED THAT THE ASSESSEE IS BOUND BY SECTIONS 2(15), 2(24) , 11, 12, 12AA AND 13 OF THE IT ACT, 1961. HE FURTHER OBSERVED THAT W HEN THE ASSESSEE TRUST IS BOUND BY THE ABOVE STATED SECTIONS OF THE ACT, THE ASSESSEE IS NOT ELIGIBLE FOR CLAIMING DEPRECIATION ALLOWANCE AS A DEDUCTION. THIS IS BECAUSE DEPRECIATION IS AVAILABLE ONLY TO THOSE ASSESSES WHO ARE CARRYING ON BUSINESS OR PROFESSION WHICH IS STATED IN SECTION 32 OF THE ITA.652/BANG/2010 PAGE - 3 IT ACT, 1961. THE ASSESSEE IS NOT CARRYING ON ANY SUCH ACTIVITIES, THEREFORE SECTION 32 DOES NOT APPLY TO THE ASSESSEE TRUST. ACCORDINGLY, IT IS NOT ENTITLED FOR DEPRECIATION. THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS ON THE ABOVE GROUND. 04. THE COMMISSIONER OF INCOME-TAX FURTHER OBSERVED THAT THE ASSESSEE TRUST HAS CLAIMED ACCUMULATION OF INCOME T O THE EXTENT OF ` .1,0019,901/- WITHOUT OBSERVING THE CONDITIONS PROV IDED IN SECTION 11(2) R.W. RULE 17 OF THE IT RULES, 1962 AND ALSO S UBJECT TO GIVING NOTICE TO THE ASSESSING OFFICER IN FORM NO.10. THE COMMISSIONER OF INCOME-TAX FOUND THAT THE SAID ACCUMULATION WORKED OUT TO 15% OF THE TOTAL INCOME OF ` .6,67,99,337/-. THIS ACCUMULATION WAS ALSO FOUND INADMISSIBLE BY THE COMMISSIONER OF INCOME-TAX WHIC H HAS BEEN ALLOWED BY THE ASSESSING OFFICER. THE COMMISSIONER OF INCOME-TAX THEREFORE HELD THAT THE ASSESSMENT ORDER IS ERRONEO US ON THIS GROUND AS WELL. 05. AFTER HEARING THE ASSESSEE TRUST AT LENGTH AND CONSIDERING THE FACTS OF THE CASE, THE COMMISSIONER OF INCOME-TAX C ONFIRMED HIS PROPOSITIONS AND SET ASIDE THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE AND DIRECTE D THE ASSESSING OFFICER TO FRAME A FRESH ASSESSMENT ORDER AFTER VER IFICATION AND ITA.652/BANG/2010 PAGE - 4 EXAMINATION OF THE POINTS DISCUSSED BY THE COMMISSI ONER OF INCOME- TAX IN DETAIL IN HIS ORDER AND AFTER GIVING OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS AGGRIEVED AND THEREF ORE, THIS APPEAL BEFORE US. 06. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS B EFORE THE TRIBUNAL : '1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX, DAVANGERE IS OPPOSED TO LAW AND ON FACTS OF THE CAS E. II. A) THE LEARNED COMMISSIONER OF INCOME TAX, DAVA NGERE IS NOT JUSTIFIED IN LAW IN SETTING ASIDE THE ASSESSMEN T ORDER PASSED UNDER SECTION 143(3), DATED 27.11.2007 AS IT IS FOUND THAT THE ORDER IS ERRONEOUS IN LAW OR IS PREJUDICIA L TO THE INTEREST OF THE REVENUE AND DIRECT THE ASSESSING OF FICER TO REDO THE ASSESSMENT BY VERIFYING THE ISSUES THOROUGHLY A ND AFTER ALLOWING ADEQUATE OPPORTUNITY TO THE ASSESSEE TO OF BEING HEARD BY RELYING ON THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF V. SELLADURAI VS. CHIEF CIT & ANOTHER [ 295 ITR 293], WHICH IS NOT AT AL1 APPLICABLE TO THE APPELLA NTS CASE. B) THE LEARNED COMMISSIONER OF INCOME TAX, DAVANGER E HAS OVERLOOKED THE FOLLOWING DECISIONS. I) CIT VS. MAX INDIA LIMITED (2007) 295 ITR 282 (SC) II) CIT VS. VIKRAMADITYA & ASSOCIATES PVT. LTD. [16 7 TAXMAN 163] (DELHI) II) III) CIT VS. VIMGI INVESTMENTS PVT. LTD. [167 TAXMA N 263] (DELHI) IV) MERCEDES BENZ INDIA LIMITED VS. JCIT (SPL. RANG E-6), PUNE [111-ITD -307 ITAT, PUNE BENCH] ITA.652/BANG/2010 PAGE - 5 V) FLEXTRONICS SOFTWARE SYSTEMS LTD. VS. CIT [ITA N O. 2070/DEL/2008] DEPRECIATION CLAIMED AMOUNTING TO RS. 2,26,57,709/--: C) THE LEARNED COMMISSIONER OF INCOME TAX, DAVANGER E HAS GROSSLY IGNORED THE FACT THAT, THE INCOME OF A CHAR ITABLE TRUST AS CONTEMPLATED BY SECTION 11(1)(A) IS REQUIRED TO BE COMPUTED, NOT IN ACCORDANCE WITH THOSE PROVISIONS, BUT IN ACCORDANCE WITH THE NORMAL RULES OF ACCOUNTANCY WHE RE DEPRECIATION IS ALWAYS TAKEN INTO ACCOUNT FOR FINDI NG OUT THE REAL INCOME. D) THE LEARNED COMMISSIONER OF INCOME TAX, DAVANGER E HAS OVERLOOKED THE CIRCULAR NO.5-P (LXX-6) OF 1968 ISSU ED BY CENTRAL BOARD OF DIRECT TAXES. E) THE LEARNED COMMISSIONER OF INCOME TAX, DAVANGER E HAS GROSSLY OVERLOOKED THE FOLLOWING DECISIONS RELIED O N BY THE APPELLANT: 1. DIT(E) VS. FRAMJEE CAWSJEE INSTITUTE [109 CTR 463] 2. DY. CIT, CIRCLE-I, UDUPI VS. MEDICAL RELIEF SOC IETY OF SOUTH KANARA ITAT, BANGALORE BENCH ITA NOS. 123 9 TO 1243/BANG/2007. 3. ACIT, CIRCLE-I, UDUPI VS. DR. T.MA.PAI FOUNDATIO N, MANIPAL ITAT, BANGALORE 4. COMMISSIONER OF INCOME-TAX V. INSTITUTE OF BANK ING (264 ITR 111) (BOM) 5. SOCIETY OF THE SISTERS OF ST. ANNE (146 ITR 28) (KER) 6. CIT VS. RAIPUR PALLOTTINE SOCIEIY [180 1TR 579] (MP) 7. CIT VS. SHETH MANILA! RANCHHODDAS VISHRAM BHAVAN TRUST [198 ITR 598] (GUJ) 8. IAC VS. MAHILA SIDH NIRMAN YOJANA [50 TTJ494] (I TAT DELHI) ITA.652/BANG/2010 PAGE - 6 9. CIT VS TRUSTEES OF SETH MERWANJEE FRAMJI PANDAY CHARITABLE TRUST (177 TAXMANN (19), (BOMBAY) F) THE LEARNED COMMISSIONER OF INCOME TAX, DAVANGER E HAS ERRED IN RELYING ON THE DECISION OF THE SUPREME COU RT IN THE CASE OF MALABAR INDUSTRIAL COMPANY VS. COMMISSIONER OF INCOME-TAX (242 ITR 83], WHICH IS NOT AT ALL APPLIC ABLE TO THE APPELLANT. ACCUMULATION OR SET APART OF INCOME: G) THE LEARNED COMMISSIONER OF INCOME TAX, DAVANGER E HAS NOT JUSTIFIED IN LAW WITHDRAWAL OF BENEFIT CLAIMED AT RS. 1,00,19,901/- UNDER SECTION 11(2) OF THE INCOME TAX ACT, BY STATING THAT, THE CONDITIONS SPELT OUT IN SECTION 1 1(2) READ WITH RULE 17 OF THE INCOME TAX RULES ARE REQUIRED TO BE FULFILLED. H) THE LEARNED COMMISSIONER OF INCOME TAX, DAVANGER E HAS OVERLOOKED THE FACT THAT, ACCUMULATION OF INCOME OF RS.1.00,19,901/- BEING 15% OF THE GROSS TOTAL INCOM E WITHOUT NOTICE AS PER THE PROVISION OF SECTION 11(1 )(A) OF THE INCOME TAX ACT. THEREFORE, CONDITIONS SPELT OUT IN SECTION 11(2) READ WITH RULE 17 DOES NOT ARISE WHILE ACCUMULATION OF I NCOME UNDER SECTION 11(1)(A).' 07. WE HEARD BOTH SIDES IN DETAIL AND CONSIDERED TH E MATTER. THE COMMISSIONER OF INCOME-TAX HAS HELD THAT DEDUCTION OF DEPRECIATION ALLOWANCE CANNOT BE PERMITTED IN THE CASE OF THE AS SESSEE AS CHARITABLE INSTITUTIONS CANNOT CLAIM DEDUCTION U/S.32. SECTIO N 32 PROVIDES FOR DEDUCTION OF DEPRECIATION ALLOWANCE. SECTION 32 IS PLACED UNDER THE RULES PROVIDED FOR COMPUTING PROFITS AND GAINS OF B USINESS OR PROFESSION. THE ASSESSEE IS NOT CARRYING ON ANY BU SINESS OR PROFESSION. THEREFORE, SECTION 32 DOES NOT APPLY T O THE ASSESSEE. ITA.652/BANG/2010 PAGE - 7 ACCORDINGLY DEPRECIATION CANNOT BE ALLOWED. THIS I S THE SUM AND SUBSTANCE OF THE FINDING OF THE COMMISSIONER OF INC OME-TAX. 08. WHILE HOLDING SO, THE COMMISSIONER OF INCOME-TA X HAS OBSERVED THAT THE ASSESSEE IS BOUND BY SECTIONS 2(1 5), 2(24), 11, 12, 12AA AND 13 OF THE IT ACT, 1961 AND HENCE NOT ELIGI BLE FOR DEPRECIATION UNDER THE PROVISIONS OF SECTION 32 OF THE IT ACT, 1961. SECTION 2(15) AND 2(24) DEFINE WHAT CHARITABLE PURP OSE AND WHAT IS INCOME RESPECTIVELY. SECTION 11 PROVIDES FOR EXEMP TION OF INCOME FROM PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURP OSES. SECTION 12 DEALS WITH INCOME OF TRUSTS OR INSTITUTIONS FROM CO NTRIBUTIONS. SECTION 12A EXPLAINS THE CONDITIONS FOR APPLICABILITY OF SE CTIONS 11 AND 12. SECTION 12AA PROVIDES FOR THE PROCEDURE FOR GETTING REGISTERED UNDER THE INCOME-TAX ACT FOR AVAILING THE DEDUCTION U/S.1 1. SECTION 13 PROVIDES THE INSTANCES OR CIRCUMSTANCES UNDER WHICH AN ASSESSEE MAY NOT BE ENTITLED FOR THE BENEFITS PROVIDED BY SECTIO N 11. 09. NONE OF THE ABOVE PROVISIONS POINTED OUT BY THE COMMISSIONER OF INCOME-TAX DEAL WITH 'COMPUTATION OF INCOME'. C OMPUTATION OF INCOME IS PROVIDED IN CHAPTER IV OF THE IT ACT, 196 1 STARTING WITH THE DIVISION OF HEADS OF INCOME AS PROVIDED IN SECTION 14. THEREAFTER THE PROVISIONS ARE GROUPED UNDER DIFFERENT PARTS OF 'A' , 'C', 'D' 'E' AND 'F' ITA.652/BANG/2010 PAGE - 8 PROVIDING FOR DIFFERENT SET OF RULES APPLICABLE TO THE COMPUTATION OF INCOME UNDER DIFFERENT HEADS SUCH AS SALARIES, INCO ME FROM HOUSE PROPERTY, PROFIT AND GAINS OF BUSINESS OR PROFESSIO N, CAPITAL GAINS AND INCOME FROM OTHER SOURCES RESPECTIVELY. 10. THE ABOVE EXAMINATION OF THE RELEVANT PROVISION S OF THE ACT BRINGS HOME THE POINT THAT THE IT ACT HAS NOT PROVI DED ANY SEPARATE SET OF RULES FOR COMPUTING THE INCOME OF AN ASSESSEE CL AIMING EXEMPTION U/S.11 OF THE IT ACT, 1961. 11. WHEN THE ACT HAS NOT PROVIDED ANY SET OF RULES FOR COMPUTING THE INCOME OF AN ASSESSEE, THE INCOME HAS TO BE COM PUTED ACCORDING TO THE GENERALLY ACCEPTED PRINCIPLES AND PRACTICE O F ACCOUNTANCY. DEPRECIATION BEING DIMINUTION IN THE VALUE OF ASSET S CAUSED BECAUSE OF THE WEAR AND TEAR OF USAGE, IS AN ESSENTIAL ELEMENT OF DEDUCTION IN COMPUTING THE INCOME OF AN ASSESSEE UNDER THE GENER ALLY ACCEPTED ACCOUNTANCY PRINCIPLES AND PRACTICES. THEREFORE, S O LONG AS AN ASSESSEE FALLING U/S.11 IS NOT SPECIFICALLY PROHIBI TED BY THE IT ACT FROM CLAIMING DEPRECIATION AS A DEDUCTION, IT IS PERMISS IBLE FOR THAT ASSESSEE TO WORK OUT ITS INCOME ON THE GENERALLY ACCEPTED PR INCIPLES AND PRACTICE OF ACCOUNTANCY. IT IS IN THIS CONTEXT THE CIRCULAR NO.5-P (LXXVI) OF 1968 ISSUED BY THE CBDT IS RELEVANT. TH E SAID CIRCULAR ITA.652/BANG/2010 PAGE - 9 HAS ACCEPTED THE PRINCIPLE THAT EVEN THE WHOLE OF C APITAL EXPENDITURE MAY BE TREATED AS APPLICATION TOWARDS CHARITABLE AC TIVITIES FOR THE PURPOSES OF SECTION 11 DEPENDING UPON THE PURPOSES FOR WHICH THE FUNDS WERE APPLIED. THEREFORE, AS RIGHTLY ARGUED B Y THE ASSESSEE WHEN THE ENTIRE CAPITAL EXPENDITURE IS PERMISSIBLE TO BE ALLOWED AS A DEDUCTION TREATING IT AS APPLICATION OF FUNDS FOR C HARITABLE OR RELIGIOUS PURPOSES, HOW THERE COULD BE A FETTER IN CLAIMING T HE DEPRECIATION ALLOWANCE WHICH IS ONLY A PERCENTAGE OF THE TOTAL C APITAL EXPENDITURE INCURRED BY THE ASSESSEE ? WHEN THE ENTIRE CAPITAL EXPENDITURE ITSELF IS DEDUCTIBLE AS APPLIED FOR CHARITABLE OR RELIGIOUS P URPOSES, THE REFUSAL TO ALLOW DEPRECIATION ALLOWANCE WHICH IS ONLY A SMA LL PORTION OF THE CAPITAL EXPENDITURE IS NOTHING BUT AN ANTITHESIS OF THE PRINCIPLES LAID DOWN BY THE CBDT IN ITS ABOVE MENTIONED CIRCULAR. ON THIS GROUND ITSELF WE FIND THAT THE VIEW OF THE COMMISSIONER OF INCOME-TAX IS NOT SUSTAINABLE IN LAW. 12. WE HAVE ALREADY STATED IN PARAGRAPH ABOVE THAT WHEN NO SPECIFIC RULE IS SUGGESTED FOR COMPUTING THE INCOME OF AN ASSESSEE, THE GENERALLY ACCEPTED PRINCIPLES OF ACCOUNTANCY HAS TO BE APPLIED FOR IN COMPUTING ITS INCOME. THEREFORE, THE ASSESSEE BEIN G A CHARITABLE INSTITUTION IS ENTITLED TO WORK OUT ITS INCOME AS I N THE CASE OF ANY OTHER ENTITY AND BASED ON GENERALLY ACCEPTED PRINCIPLES A ND PRACTICES OF ITA.652/BANG/2010 PAGE - 10 ACCOUNTANCY WHICH PROVIDE FOR DEDUCTION OF DEPRECIA TION ALLOWANCE AS WELL. THIS BEING THE CASE, THE COMMISSIONER OF INC OME-TAX IS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE IS NOT ENTIT LED TO CLAIM DEPRECIATION ALLOWANCE ON THE GROUND THAT SECTION 3 2 IS NOT APPLICABLE TO THE ASSESSEE. WE HOLD THAT EVEN IF SECTION 32 D OES NOT APPLY TO THE ASSESSEE, IT IS ENTITLED FOR CLAIMING DEPRECIATION ALLOWANCE AS IT IS ENTITLED TO FOLLOW THE GENERALLY ACCEPTED PRINCIPLE S AND PRACTICE OF ACCOUNTANCY IN COMPUTING ITS INCOME. 13. IN HIS ORDER, THE COMMISSIONER OF INCOME-TAX HA S MENTIONED THAT THE ASSESSEE IS DERIVING INCOME FROM OTHER SOU RCES LIKE MARKET FEES, LEAVE AND LICENCE FEES, INTEREST ON BANK DE POSITS AND OTHER RECEIPTS, MARKETING OF AGRICULTURAL COMMODITIES ETC ., THE LAW HAS PRESCRIBED SPECIFIC RULES FOR COMPUTATION OF INCOME FROM OTHER SOURCES IN PART 'F' UNDER CHAPTER IV OF THE IT ACT, 1961 RUNNING FROM SECTIONS 56 TO 59. SECTION 57 PROVIDES FOR DEDUCTI ON ALLOWABLE IN COMPUTING INCOME UNDER OTHER SOURCES. CLAUSE (II) OF SECTION 57 PROVIDES FOR DEPRECIATION U/S.32(2). IT SHOWS THAT EVEN IN COMPUTING THE INCOME FROM OTHER SOURCES, THE ASSESSEE IS ENTI TLED TO CLAIM DEPRECIATION U/S.32(2). THIS CRUCIAL ASPECT ALSO W AS NOT EXAMINED BY THE COMMISSIONER OF INCOME-TAX IN THE RIGHT PERSPEC TIVE. THEREFORE, WE FIND THAT THE ASSESSING OFFICER HAS RIGHTLY ALLO WED THE DEDUCTION OF ITA.652/BANG/2010 PAGE - 11 ` .2,26,57,709/- AS DEPRECIATION ALLOWANCE IN COMPUTI NG THE INCOME OF ASSESSEE TRUST. 14. THE NEXT POINT MADE OUT BY THE COMMISSIONER OF INCOME-TAX IS ACCUMULATION OF INCOME AMOUNTING TO ` .1,00,19,901/-. SECTION 11(1)(A) PROVIDES FOR THE RULES REGARDING ACCUMULAT ION OF INCOME ONLY IF THE ASSESSEE DOES NOT EXPEND 85% OF ITS INCOME. IT MEANS THAT FOR ACCUMULATING 15% OF ITS INCOME, THE ASSESSEE NEED N OT COMPLY WITH ANY RULES AND SEEK THE PRIOR APPROVAL OF THE ASSESS ING AUTHORITY. AGAIN TO ELABORATE THIS POSITION, IT IS TO BE SEEN THAT 1 5% OF THE INCOME IS PERMITTED FOR ACCUMULATION BY THE STATUTE ITSELF WI THOUT ANY CONDITIONS. THEREFORE, IT IS POSSIBLE TO QUALIFY THE SAME 15% A S STATUTORY ACCUMULATION PROVIDED IN THE ACT WITHOUT ADHERING T O ANY PROCEDURE AND RULES. IN THE PRESENT CASE, THE ASSESSEE HAS A LREADY SPENT 85% OF ITS INCOME. IT HAS ACCUMULATED ONLY 15% OF THE INC OME WHICH IS PERMISSIBLE U/S.11(1)(A) OF THE ACT. THEREFORE, TH E ASSESSING AUTHORITY IS JUSTIFIED IN ACCEPTING THE SAID 15% STATUTORY AC CUMULATION MADE BY THE ASSESSEE. THE FINDING OF THE COMMISSIONER OF I NCOME-TAX ON THIS POINT IS ALSO NOT SUSTAINABLE IN LAW. 15. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE REASONS STATED BY THE COMMISSIONER OF INCOME-TAX TO REVISE THE ITA.652/BANG/2010 PAGE - 12 ASSESSMENT ORDER ARE NOT SUSTAINABLE IN LAW AND THE REFORE THE REVISION ORDER IS LIABLE TO BE SET ASIDE. 16. IN RESULT, WE CANCEL THE REVISION ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX AND ALLOW THE APPEAL FIL ED BY THE ASSESSEE. ORDER PRONOUNCED ON TUESDAY, THE 08TH DAY OF MARCH, 2011, AT BANGALORE. SD/- SD/- (SMT. P. MADHAVI DEVI) (DR. O. K. NARAYANAN) JUDICIAL MEMBER VICE PRESIDENT