The Musiri Agricultural Producers Co-Operative Marketing Society, Trichy V. ITO, Trichy

ITA 702/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96544 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 10-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 06-04-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Keywords: Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , . ! ' , # '$ % [ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ] ./ I.T.A.NO. 702/MDS/2015 / ASSESSMENT YEAR : 2009-10 THE MUSIRI AGRICULTURAL PRODUCERS CO-OPERATIVE MARKETING SOCIETY NO.7, T.GOVT ARTS COLLEGE ROAD MUSIRI, TRICHY 621 211 VS. THE INCOME TAX OFFICER WARD I(1) TRICHY [PAN AAAAT 8118 K] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI S SRIDHAR, ADVOCATE /RESPONDENT BY : SHRI A.V SREEKANTH , JCIT / DATE OF HEARING : 10 - 12 - 2015 / DATE OF PRONOUNCEMENT : 18 - 1 2 - 2015 * / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TIRUCH IRAPALLI, DATED 9.1.2015, FOR ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF A PPEAL: ITA NO.702/15 :- 2 -: 1. THE ORDER OF LEARNED CIT(A) IS ERRONEOUS IN LAW AN D AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 2. THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE GRO UNDS OF APPEAL IN PROPER PERSPECTIVE. 3. THE LEARNED CIT(A) GROSSLY ERRED IN SIMPLY ACCEPTIN G THE STAND OF THE ASSESSING OFFICER WHO PROCEEDED FROM T HE GROSS PROFIT, INSTEAD OF NET PROFIT DESPITE CPIES O F THE TRADING AND PROFIT & LOSS ACCOUNT MADE AVAILABLE TO HIM (COPIES ENCLOSED.) 3. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE IS AN AGRICULTURAL PRODUCERS' CO-OPERATIVE MARKETING SOCIETY. FOR THE A.Y. 2009-10, THE ASSESSEE HAD EARNED INCOME FROM BUSINESS, INTEREST INCOME AND MISCELLANEOUS INCOME. THE ASSESSEE RETURNED A NET P ROFIT OF ` 30,26,380/- FOR THE YEAR UNDER CONSIDERATION AND CLAIMED THE WHOLE AMOUNT AS DEDUCTION U/S 80P(2). THE ARGUMENTS OF THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT THE PROFIT IS NOT TAXABLE AS IT IS A STATUTORY OBLIGATI ON THAT THE SOCIETY SHOULD RUN FAIR PRICE SHOPS; THE STATE GOVT. IS ALS O A MEMBER OF THE SOCIETY AND THERE ARE ALSO INSTANCES OF MARKETING O F AGRICULTURAL PRODUCE GROWN BY ITS MEMBERS WAS NOT ACCEPTED BY TH E ASSESSING OFFICER AS THE MARKETING PRODUCE IS NEITHER GROWN BY THE GOVERNMENT NOR THE MEMBERS OF THE SOCIETY. THE ASSESSING OFFIC ER TAXED THE PROFIT FROM RUNNING OF FAIR PRICE SHOPS AT ` 33,68,765/- AS INCOME FROM BUSINESS AND AFTER ALLOWING DEDUCTION U/S 80(P)(2)( C )(II) OF THE ACT OF ITA NO.702/15 :- 3 -: ` 50,000/-, AN INCOME OF ` 33,18,765/- WAS ASSESSED RAISING A DEMAND OF ` 13,59,800/-. 4. ON APPEAL, THE CIT(A) OBSERVED THAT THE ASSESSEE I S NOT ENTITLED FOR EXEMPTION U/S 80P(2)(A)(III) OF THE A CT AND ALSO OBSERVED THAT AS PER ANNUAL REPORT FILED, THE NET PROFIT OF THE ASSESSEE WAS ` 33,68,765/-. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. THE ORDER OF THE CIT(A) IS A VERY CRYPTIC ONE. HE HAS NOT GIVEN HOW THE NET PROFIT OF THE ASSESSEE IS ` 33,68,765/- THOUGH THE ASSESSEE HAS FILED ITS PROFIT & LOSS ACCOUNT AND ST ATEMENT OF INCOME WHERE THE NET PROFIT IS MENTIONED AS ` 9,33,664/-. IN OUR OPINION, BOTH THE LOWER AUTHORITIES HAVE NOT UNDERSTOOD PRO PERLY THE CONCEPT OF GROSS PROFIT AND NET PROFIT. THEREFORE, IT IS R EQUIRED TO BE REEXAMINED FROM THE END OF THE ASSESSING OFFICER TO CONSIDER THE CORRECT NET PROFIT AS PER THE PROFIT & LOSS ACCOUNT AND DECIDE THE ISSUE AFRESH. ACCORDINGLY, WE REMIT THE ENTIRE ISSUE BAC K TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION. NEEDLES S TO SAY THAT THE ASSESSING OFFICER SHALL GIVE ADEQUATE OPPORTUNITY O F HEARING TO THE ASSESSEE BEFORE DECIDING THE ISSUE. ITA NO.702/15 :- 4 -: 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER, 2015, AT CHENNAI. SD/- SD/- ( . ! ' ) (G. PAVAN KUMAR) # / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER !' / CHENNAI #$ / DATED: 18 TH DECEMBER, 2015 RD $%&& '(&)( / COPY TO: & 1 . / APPELLANT 4. & * / CIT 2. / RESPONDENT 5. (+,& - / DR 3. & *&./ / CIT(A) 6. ,0&1 / GF