Haryana State Agricultural Marketing Board, Panchkula V. DCIT, Panchkula

ITA 665/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60852 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 23-05-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 09-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: HARISH NAYYAR
• Keywords: Charitable institution; Capital receipt
• Section: 12A; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO.147/CHD/2011 ASSESSMENT YEAR: 2007-08 HARYANA STATE AGRICULTURAL V ADDL. CIT, MARKETING BHAWAN,C-6, PANCHKULA RANGE, SECTOR 6, PANCHKULA. PANCHKULA. PAN: AAALH-0016R & ITA NO. 665/CHD/2011 ASSESSMENT YEAR : 2008-09 HARYANA STATE AGRICULTURAL V DCIT, MARKETING BHAWAN,C-6, PANCHKULA RANGE, SECTOR 6, PANCHKULA. PANCHKULA. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HARISH NAYYAR DEPARTMENT BY : SMT. JAISHREE SHARMA DATE OF HEARING : 23.05.2012 DATE OF PRONOUNCEMENT : 06.06.2012 ORDER PER MEHAR SINGH, AM THE PRESENT TWO APPEALS HAVE BEEN FILED BY THE SAME ASSESSEE, AGAINST THE ORDER DATED 29.11.2010 AND 16.03.2011 RESPECTIVELY, PASSED BY THE LD. CIT(A) U /S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'THE ACT'). AS THE FACTS AND ISSUES, IN BOTH THE APPEALS ARE SIMILAR, THEREF ORE, THE SAME ARE BEING DISPOSED OF TOGETHER, FOR THE SAKE O F CONVENIENCE AND BREVITY. 2. AS THE GROUNDS OF APPEAL IN BOTH THE APPEALS ARE SIMILARLY, THEREFORE, THE GROUNDS AS RAISED I N ITA NO. 2 147/CHD/2011, ARE REPRODUCED HEREUNDER: 1. THAT THE ORDER PASSED BY THE CIT(A) IN PARTLY ALLOWING THE APPEAL AND CONFIRMING ACTION OF THE ASSESSING OFFICER ARE ILLEGAL, ARBITRARY, HAVE BE EN PASSED IN A HASTE AND HAVE IGNORED BASIC ASPECTS AN D FACTS THUS CAUSING UNDUE HARDSHIP TO THE APPELLANT. 2. THAT THE CIT (A) HAS ERRED BOTH ON FACTS AND LAW IN CONFIRMING THE ADDITION OF RS.8876931/- ON ACCOUNT OF INTEREST ON DEPOSIT WORKS. THE ADDITION IS ILLEGAL , BEREFT OF MERIT AND DESERVES TO BE DELETED. IT IS PRAYED THAT ADDITION OF RS.8876931 MAY KINDLY BE ORDERED TO BE DELETED. 3. THAT THE CIT (A) HAS ERRED BOTH ON FACTS AND LA W IN CONFIRMING THE ADDITION OF RS.2947650/- ON ACCOUNT OF SALE ON TENDER FORMS. THE ADDITION HAS BEEN CONFIRMED WI THOUT CONSIDERING THE FACTS OF THE CASE CORRECTLY AND IS ILLEGAL, BEREFT OF MERIT AND DESERVES TO BE DELETED. IT IS PRAYED THAT ADDITION OF RS.2947650 MAY KINDLY BE ORDERED TO BE DELETED. 4. THAT THE CIT (A) HAS ERRED BOTH ON FACTS AND LAW IN CONFIRMING THE ADDITION OF RS.1202550/- ON ACCOUNT OF ESTABLISHMENT FEES PAID BY THE CONTRACTOR. THE ADDI TION HAS BEEN CONFIRMED WITHOUT CONSIDERING THE FACTS OF THE CASE CORRECTLY AND IS ILLEGAL, BEREFT OF MERITS AND DESERVES TO BE DELETED. IT IS PRAYED THAT ADDITION OF RS.1202550 MAY KINDLY BE ORDERED TO BE DELETED. 5. THAT THE CIT (A) HAS ERRED BOTH ON FACTS AND LAW IN FT/CONFIRMING THE ADDITION OF RS.30190158 ON ACCOUN T OF SUMS RECEIVED FROM HRDF BEING CONTRIBUTION RECEIVED FROM A CHARITABLE TRUST EXEMPT UNDER SECTION 12A OF INCOME TAX ACT. THE ADDITION HAS BEEN CONFIRMED WITHOUT CONSIDERING THE FACTS OF THE CASE CORRECTLY AND IS ILLEGAL, BEREFT OF MERITS AND DESERVES TO BE DELETED. IT IS PRAYED THAT ADDITION OF RS.30190158 MAY KINDL Y BE ORDERED TO BE DELETED. 6. THAT THE CIT (A) HAS ERRED BOTH ON FACTS AND LAW IN CONFIRMING THE ADDITION OF RS. 3601663 ON ACCOUNT OF HIRING CHARGES IN RESPECT OF TOOLS AND PLANTS. THE ADDITION HAS BEEN CONFIRMED WITHOUT CONSIDERING THE FACTS OF THE CASE CORRECTLY AND IS ILLEGAL, BEREFT OF MERIT AND DESER VES TO BE DELETED. IT IS PRAYED THAT ADDITION OF RS.3601663 MAY KINDLY BE ORDERED TO BE DELETED. 7. THAT THE CIT (A) HAS ERRED BOTH ON FACTS AND LAW IN CONFIRMING THE ADDITION OF A SUM OF RS.256429 ON AC COUNT OF 3 HONORARIUM PAID TO THE CHAIRMAN.THE ADDITION HAS BE EN CONFIRMED WITHOUT CONSIDERING THE FACTS OF THE CASE CORRECTLY AND IS ILLEGAL, BEREFT OF MERIT AND DESERVES TO BE DELETED. IT IS PRAYED THAT ADDITION OF RS. 256429 MAY KINDLY BE ORDERED TO BE DELETED. 8. THAT THE APPELLANT CRAVES TO ADD, DELETE, CONCED E, MODIFY AND ALTER ANY OR ALL THE GROUNDS OF APPEAL AT THE T IME OF HEARING. 3. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, BOTH LD. 'AR' AND LD. 'DR' STATED THAT MOST OF THE GROUNDS A RE COVERED BY THE ORDER OF THE TRIBUNAL, IN ASSESSEE'S OWN CAS E IN ITA NO. 1003/CHD/2009, ASSESSMENT YEAR 2006-07, ORDER D ATED 30.3.2010. 4. LD. 'AR' STATED THAT GROUND NO. 1 IS GENERAL IN NATURE AND NEEDS NO SEPARATE ADJUDICATION. 5. IN GROUND NO. 2, THE LD. 'AR' CONTENDED THAT CIT (A) ERRED, BOTH ON FACTS AND LAW IN CONFIRMING THE ADDI TION OF RS.8876931/- ON ACCOUNT OF INTEREST ON DEPOSIT WORK S. LD. 'AR' FURTHER STATED THAT THE ISSUE IS COVERED AGAIN ST THE ASSESSEE VIDE PARA 3 & 4 OF THE ORDER OF THE TRIBUN AL, IN ASSESSEE'S OWN CASE (SUPRA). FOR THE PURPOSE OF REA DY REFERENCE AND APPRECIATION OF THE ISSUE AND FINDING S, THE RELEVANT FINDINGS ARE REPRODUCED HEREUNDER : 3. GROUND NO. 5 RELATES TO ADDITION OF RS.1,09,01, 506/- MADE ON ACCOUNT OF DEPOSIT WORK. THE CIT(APPEALS) HAS SUSTAINED THE ADDITION ON THE GROUND THAT SIMILAR I SSUE WAS DECIDED AGAINST THE ASSESSEE IN THE PRECEDING YEAR BY HIS PREDECESSOR CIT(APPEALS). THE CIT(APPEALS) HAS FURT HER OBSERVED THAT THE ORDER OF THE CIT(APPEALS) OF THE PAST YEAR HAS NOT BEEN AGITATED BY THE ASSESSEE IN APPEAL BEF ORE THE TRIBUNAL. ACCORDINGLY, ADDITION HAS BEEN UPHELD. 4 4. BEFORE US, THE FACT POSITION NOTED BY THE CIT(A PPEALS) IS NOT ASSAILED. THE CIT(APPEALS) HAS NOTED THAT THER E IS NO EVIDENCE ON RECORD TO ESTABLISH THAT THE AMOUNT INV ESTED IN FDRS BELONG TO THE MARKET COMMITTEE AND NOT TO THE APPELLANT AND THEREFORE, AS PER HIM, THE INTEREST E ARNED BY THE ASSESSEE HAS BEEN RIGHTLY ASSESSED IN THE HANDS OF THE ASSESSEE. AT THE TIME OF HEARING, NO COGENT MATERI AL AND EVIDENCE HAS BEEN LED BY THE APPELLANT WHICH WOULD REQUIRE US TO INTERFERE WITH THE ABOVE FINDING DRAWN BY THE CIT(APPEALS). IN VIEW OF THE ABSENCE OF EVIDENCE A ND ALSO THE PRECEDENT IN ASSESSEE'S OWN CASE, WE FIND NO JU STIFICATION TO INTERFERE WITH THE ORDER OF THE CIT(APPEALS). A CCORDINGLY, GROUND NO. 5 RAISED BY THE ASSESSEE IS DISMISSED. 5(I) IN VIEW OF THE SIMILAR ISSUE, BEING ADJUDICATE D BY THE TRIBUNAL, IN ASSESSEE'S OWN CASE, THE SAME IS, RESP ECTFULLY FOLLOWED AND THE GROUND OF APPEAL OF THE ASSESSEE I S DISMISSED. 6. IN GROUND NOS. 3 & 4, THE ASSESSEE CONTENDED THA T CIT(A) ERRED IN CONFIRMING THE ADDITIONS OF RS.29,47,650/- AND RS.12,02,550/- ON ACCOUNT OF SALE OF TENDER FORMS A ND ESTABLISHMENT FEES, PAID TO THE CONTRACTOR RESPECTI VELY. LD. 'AR' STATED, THAT THE ISSUES ARE COVERED AGAINST TH E ASSESSEE VIDE PARA 5 OF THE ORDER OF THE TRIBUNAL, IN ASSESS EE'S OWN CASE (SUPRA). FOR THE PURPOSE OF READY REFERENCE AND APP RECIATION OF THE ISSUES AND FINDINGS, THE RELEVANT FINDINGS ARE REPRODUCED HEREUNDER : 5. GROUND NO. 6 AND 7 RELATE TO ADDITIONS OF RS.10 ,57,800/- AND RS.6,00,700/- ON ACCOUNT OF SALE ON TENDER FORM S AND ESTABLISHMENT FEES PAID BY THE CONTRACTOR RESPECTIV ELY. ON THESE ADDITIONS ALSO, WE FIND THAT THE CIT(APPEALS) HAS NOTICED THAT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, THE ISSUE WAS DECIDED AGAINST THE ASSESSEE AND FOLLOWING THE SAME, IMPUGNED ADDITION HAS BEEN UPHELD. THE SAID POSITI ON 5 CONTINUES EVEN BEFORE US AND THERE IS NO MATERIAL B ROUGHT ON RECORD BY THE APPELLANT TO THE CONTRARY. ACCORDING LY, GROUND NOS. 6 & 7 RAISED BY THE APPELLANT ARE DISMISSED AS BEING BEREFT OF MERIT. 6(I) AS THE ISSUES ARE COVERED AGAINST THE ASSESSEE , IN ASSESSEE'S OWN CASE, THE GROUNDS RAISED BY THE ASSE SSEE CANNOT BE ALLOWED. RESPECTFULLY FOLLOWING THE DECIS ION OF THE TRIBUNAL IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2006- 07 (SUPRA), THE GROUND NOS. 3 & 4 ARE DISMISSED. 7. IN GROUND NO. 5, THE ASSESSEE CONTENDED THAT CIT (A) ERRED BOTH ON FACTS AND LAW, IN CONFIRMING THE ADDI TION OF RS.3,01,90,158/- ON ACCOUNT OF SUMS RECEIVED FROM H RDFA, BEING CONTRIBUTION RECEIVED FROM A CHARITABLE TRUST , EXEMPT U/S 12A OF THE ACT. 7(I) IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS , LD. 'AR' FAILED TO ADDUCE ANY EVIDENCE, TO THE EFFECT THAT T HE IMPUGNED AMOUNT OF DONATION HAS BEEN RECEIVED BY TH EM. AS THE ONUS IS CLEARLY CAST ON THE ASSESSEE, TO ESTABL ISH THE FACTUM OF RECEIPT OF SUCH DONATIONS AND ELIGIBILITY THEREOF, UNDER THE PROVISIONS OF THE ACT, THE SAME CANNOT BE ALLOWED IN THE ABSENCE OF DISCHARGING THE ONUS CAST ON THE ASSESSEE. THE RELEVANT FINDINGS OF THE CIT(A), ON THE ISSUE, ARE REPRODUCED HEREUNDER: 7. GROUND NO. 6 TH ON ACCOUNT OF ADDITION OF RS.3,01,90,158/- ON ACCOUNT OF SUMS RECEIVED FROM HRDFA. THE APPELLANT HAD SHOWN THESE AS CAPITAL RECEIPTS WHEREAS THE AO HAD TREATED IT TO BE REVENU E RECEIPTS. THE APPELLANT HAS CHALLENGED HE ADDITION 6 STATING THAT THE AMOUNT IN QUESTION IS A CONTRIBUTI ON RECEIVED FROM A CHARITABLE TRUST WHOSE INCOME IS EXEMPT U/S 12A OF THE I.T.ACT. HOWEVER, THERE IS NO MERIT IN THIS SUBMISSION AS THE NATURE OF THE RECEI PTS IN THE HANDS OF THE APPELLANT IS REVENUE IRRESPECTI VE OF THE SOURCE FROM WHERE IT HAS BEEN RECEIVED. THE AO' S ACTION IN TREATING THESE RECEIPTS AS REVENUE RECEIP TS IS UPHELD. THIS GROUND OF APPEAL IS DISMISSED. 7(II) AS THE ASSESSEE HAS FAILED TO ADDUCE ANY EVI DENCE AND DISCHARGE THE ONUS CAST ON HIM IN THE MATTER, THE A DDITION IS CONFIRMED AND GROUND OF APPEAL OF THE ASSESSEE I S DISMISSED. 8. IN GROUND NO. 6, ASSESSEE CONTENDED THAT CIT(A) ERRED BOTH ON FACTS AND LAW IN CONFIRMING THE ADDITION OF RS. 36,01,663/- ON ACCOUNT OF HIRING CHARGES, IN RESPECT OF TOOLS AND PLANTS. THE ADDITION HAS BEEN CONFIRMED WITHOUT CONSIDERING THE FACTS OF THE CASE. THE FINDINGS OF THE CIT(A), IN THE MATTER, AS CONTAINED IN PARA 8 THE ORDER, AR E REPRODUCED HEREUNDER : 8. THE 7 TH GROUND OF APPEAL REGARDING ADDITION OF RS.36,01,663/- ON ACCOUNT OF HIRING CHARGES RECEIVE D IN RESPECT OF TOOLS & PLANTS. THE APPELLANT HAD TREATE D THIS INCOME AS CAPITAL RECEIPTS STATING THAT THESE HAVE BEEN RECEIVED IN CONNECTION WITH THE CAPITAL WORK UNDERT AKEN BY THE APPELLANT ON BEHALF OF THE MARKET COMMITTEES . THE AO HOWEVER TREATED THESE TO BE A REVENUE RECEIPTS. THE APPELLANT HAS NOT ELABORATED AS TO HOW THE AO'S ACT ION IN TREATING THESE RECEIPTS AS REVENUE RECEIPTS IS A GAINST LAW. THEREFORE, THE ACTION OF THE AO IN TREATING TH E RECEIPTS FORM HIRE CHARGES OF TOOL & PLANTS IS REVE NUE RECEIPTS IS UPHELD. THIS GROUND OF APPEAL IS DISMIS SED. 7 8(I) A BARE PERUSAL OF THE FACTS OF THE CASE AND TH E RELEVANT RECORD, IT IS EVIDENT THAT SUCH RECEIPTS C ANNOT BE TREATED AS CAPITAL RECEIPTS AND HENCE, FINDINGS OF THE CIT(A), DO NOT SUFFER FROM ANY INFIRMITY AND THE SAME ARE U PHELD. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 9. IN GROUND NO.7, ASSESSEE CONTENDED THAT CIT(A) ERRED BOTH ON FACTS AND LAW IN CONFIRMING THE ADDITION OF A SUM OF RS.2,56,429/-, ON ACCOUNT OF HONORARIUM PAID TO THE CHAIRMAN. 9(I) IN THE CASE OF PRESENT APPELLATE PROCEEDINGS, LD. 'AR' CONTENDED THAT TO RUN ADMINISTRATION OF THE BOARD, IT IS ESSENTIAL THAT SOME COMPETENT PERSON SHOULD BE POST ED FOR RENDERING SUITABLE SERVICE, IN CONNECTION WITH ASSE SSEE'S BUSINESS. THIS AMOUNT WAS PAID AS HONORARIUM FOR T HE SERVICES RENDERED BY THE CHAIRMAN. IT IS FURTHER A RGUED THAT SUCH SUM IS ADMISSIBLE UNDER THE RELEVANT PROVISION S OF SECTION 11, 12 AND 13 OF THE ACT. LD. 'AR' PLACED RELIANCE ON THE ORDER OF THE CIT(A). 9(II) WE HAVE CAREFULLY PERUSED THE FACTS OF THE CA SE. THE FINDINGS OF THE CIT(A), AS CONTAINED IN PARA 9, ARE REPRODUCED HEREUNDER : 9. GROUND NO. 8 TH OF APPEAL IS REGARDING THE DISALLOWANCE OF RS.2,56,429/- AS HONORARIUM PAID TO THE CHAIRMAN. THE AO HAS DISALLOWED THIS AMOUNT AS NOT SPENT FOR THE OBJECTS OF THE INSTITUTIONS. THE APPELLANT HAS JUSTIFIED THE CLAIM STATING THAT THE HONORARIUM HAS BEEN PAID TO THE CHAIRMAN WHO IS THE ADMINISTRATIVE HEAD OF THE ORGANIZATION. AFTER CAREFULLY GOING THROUGH THE FACTS OF THE CASE, IT IS SEEN THA T THE 8 APPELLANT HAS NOT FILED DETAILS AS TO FOR WHAT PURP OSES THE HONORARIUM WAS PAID TO THE CHAIRMAN AND AS TO WHETHER ANY SALARY AND ALLOWANCES WERE ALSO PAID TO HIM. IN THE ABSENCE OF THESE DETAILS, IT CAN NOT BE PROVED THAT THE EXPENDITURE HAVE BEEN INCURRED FOR THE PURPOSES/OBJECTS OF THE ORGANIZATION. THE ACTION OF THE AO IN DISALLOWING THE EXPENSES AS NOT ADMISSIBLE IS CORRECT AND IS THEREFORE UPHELD. THIS GROUND OF APP EAL IS DISMISSED. 9(III) THE IMPUGNED AMOUNT HAS BEEN DISALLOWED BY T HE CIT(A), ON THE GROUND THAT ASSESSEE HAS FAILED TO F ILE DETAILS, AS TO FOR WHAT PURPOSE, HONORARIUM WAS PAID TO THE CHAIRMAN AND AS TO WHETHER, ANY SALARY AND ALLOWANC ES WERE ALSO PAID TO HIM. BASICALLY, IN THE ABSENCE OF SUC H DETAILS, ADDITION WAS MADE. 9(IV) IT CANNOT BE DENIED THAT THE CHAIRMAN REND ERED SERVICES TO THE ASSESSEE AND FOR SUCH SERVICES, HE IS ENTITLED FOR SOME SALARY OR HONORARIUM. THE ASSESSEE HAS PA ID HONORARIUM TO THE CHAIRMAN, AMOUNTING TO RS.2,56,42 9/-. NEEDLESS TO SAY, THAT IT IS IMPERATIVE AND A NECESS ITY FOR PROPER MANAGEMENT OF THE ACTIVITIES OF THE ASSESSEE , TO ENGAGE SOMEONE WHO CAN MANAGE ITS ACTIVITY EFFICIEN TLY. THEREFORE, THE DISALLOWANCE MADE BY THE AO AND UPHE LD BY THE CIT(A), IS TO BE SEEN, IN THE LIGHT OF THE EXIG ENCY OF THE ACTIVITIES OF THE ASSESSEE, IN ENGAGING SUCH PERSON AS CHAIRMAN, FOR ITS MANAGEMENT. FURTHER, THE ADDITION HAS BEEN MADE ON THE GROUND OF NON-FILING OF THE DETAIL S, IN THE MATTER. IN VIEW OF THIS, IT WOULD BE FAIR AND REAS ONABLE TO RESTORE THE ISSUE, TO THE FILE OF THE AO, FOR FRESH ADJUDICATION OF THE ISSUE, AS PER LAW, AFTER OBTAINING NECESSARY DETAILS, IN THE MATTER. THE ASSESSEE IS REQUESTED TO RENDER NEC ESSARY 9 COOPERATION TO THE AO, IN THE MATTER. HOWEVER, IT IS INCUMBENT UPON THE AO TO AFFORD REASONABLE OPPORTUN ITY TO THE ASSESSEE. ACCORDINGLY, THIS GROUND OF APPEAL O F THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 10. GROUND NO. 8 IS GENERAL IN NATURE, THEREFORE, N EEDS NO SEPARATE ADJUDICATION AND, HENCE, THE SAME IS DISMI SSED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 12. AS THE FACTS, AND CIRCUMSTANCES AS ALSO THE ISSUES/GROUND OF APPEAL, RAISED IN ITA NO.665/CHD/2 011 ARE SIMILAR TO THOSE OF OBTAINING IN THE APPEAL OF THE ASSESSEE IN ITA NO.147/CHD/2011, THE FINDINGS OF THE BENCH IN I TA NO.147/CHD/2011, WOULD APPLY MUTATIS MUTANDIS, TO T HE APPEAL OF THE ASSESSEE, IN ITA NO.665/CHD/2011 ALSO . THEREFORE, BOTH APPEALS OF THE ASSESSEE (ITA NO. 147/CHD/2011 AND ITA NO.665/CHD/2011) ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JUNE,2012. SD/- SD/- (H.L.KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 6 TH JUNE,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT ,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH