ITO, SRIGANGANAGAR V. M/s. Krishi Upaj Mandi Samiti (Grain), SRIGANGANAGAR

ITA 81/JODH/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78172 (ITAT-JODHPUR)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-05-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 14-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWALDR
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Revised return
• Section: 11

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.81/JODH/2014 (A.Y. 2007-08) ITO, WARD-2, VS. M/S. KRIS HI UPAJ MANDI SAMITI SRIGANGANAGAR. (GRAIN), NEW DHAN MANDI, SRIGANGANAGAR. PAN NO. AABTK 0300 Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAKESH GUPTA. DEPARTMENT BY : SHRI A.K. KHANDELWAL-DR DATE OF HEARING : 20/05/2014. DATE OF PRONOUNCEMENT : 20/05/2014. O R D E R PER BENCH THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 26/11/2013 OF LD. CIT(A), BIKANER. THE ONLY GROUND RAISED IN THIS APPEAL READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN ALLOWING RELIEF OF RS. 7,77,63,934/- ON AC COUNT OF EXCESS EXPENDITURE INCURRED OVER INCOME AS APPLICATION OF INCOME U/S 11(1)(A) I.T. ACT, 1961. 2 2 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSIN G OFFICER MADE THE ADDITION OF IMPUGNED AMOUNT BY OBSERVING THAT T HE ASSESSEE HAD INCURRED EXPENDITURE OF RS. 14,78,650/- (RS. 7,92,4 2,584/- (-) RS. 7,77,63,934/-) OUT OF BALANCE IN PD ACCOUNT AS ON 0 1/04/2006. HE WAS OF THE VIEW THAT THE EXEMPTION UNDER SECTION 11 (1)(A) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) COULD NOT BE ALLOWED TO THE ASSESSEE. RELIANCE WAS PLACED IN TH E CASE OF M/S. SHRI AKHEY RAM ISHWARI PRASAD TRUST VS. CIT REPORTED AT (2004) 266 ITR 281 (RAJ). 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER T O THE LD. CIT(A), WHO OBSERVED THAT THE ASSESSEE HAD INCURRED EXPENDITURE IN EXCESS OF ITS INCOME DURING THE YEAR AND THE ASSESS ING OFFICER ALLEGED THAT THE EXCESS EXPENDITURE WAS MADE OUT OF SURPLUS IN PD ACCOUNT. HE FURTHER OBSERVED THAT THIS ISSUE HAD BEEN DECIDE D IN FAVOUR OF THE ASSESSEE BY THE ITAT JODHPUR BENCH VIDE ORDER DATED 04/12/2012 IN I.T.A.NO. 304/JU/2011. NOW THE DEPARTMENT IS IN AP PEAL. 4. LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSE T STATED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASS ESSEE AND AGAINST THE DEPARTMENT VIDE ORDER DATED 23/11/2012 IN I.T.A.NO. 438/JU/2011 3 AND OTHERS FOR THE A.Y. 2008-09 IN THE CASE OF M/S. KRISHI UPAJ MANDI SAMITI, DHAN MANDI, KESRISINGHPUR VS. ITO, SRIGANGA NAGAR WHEREIN BY FOLLOWING THE EARLIER DECISION DATED 01/09/2009 IN I.T.A.NO. 385/JU/2009 AND OTHERS FOR THE A.Y. 2006-07 IN THE CASE OF ITO, WARD-2, SRIGANGANAGAR & OTHERS VS. M/S. KRISHI UPAJ MANDI SAMITI, RIDMALSAR AND OTHERS, THE ISSUE HAD BEEN DECIDED IN FAVOUR OF THE ASSESSEE. 5 . IN HIS RIVAL SUBMISSIONS, LEARNED D.R., ALTHOUGH, SUPPORTED THE ORDER OF THE ASSESSING OFFICER, BUT COULD NOT CONTR OVERT THE AFORESAID CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. 6 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ISSUE UNDER CO NSIDERATION IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAI NST THE DEPARTMENT VIDE AFORESAID REFERRED TO ORDER DATED 23/11/2012 I N I.T.A.NO. 438/JU/2011 AND OTHERS FOR THE A.Y. 2008-09 IN THE CASE OF M/S. KRISHI UPAJ MANDI SAMITI, DHAN MANDI, KESRISINGHPUR VS. IT O, WARD-2, SRIGANGANAGAR. THE RELEVANT FINDINGS HAVE BEEN GI VEN IN PARA 12 & 13 WHICH READ AS UNDER:- 4 12. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND MATERIAL ON RECORD, IT IS NOTICED THAT AN IDENTICAL ISSUE H AVING SIMILAR FACTS HAS ALREADY BEEN ADJUDICATED BY THIS BENCH OF THE TRIB UNAL IN THE ABOVE REFERRED TO ORDER DATED 1.9.2009 WHEREIN THE RELEVANT FINDING HAS BEEN GIVEN IN PARAS 6 & 7 OF THE SAID ORDER WHICH READ AS UNDER:- 6. WE HAVE HEARD THE PARTIES AND HAVE CAREFULLY PE RUSED THE MATERIAL ON RECORD WITH REFERENCE TO SUB-RULE (6) O F RULE 18 OF APPELLATE TRIBUNAL RULES, 1963 AND THE PRECEDENTS CITED AT BAR. THE HON'BLE APEX COURT IN GOETZE (INDIA) LTD (SUPRA ) HAS CLARIFIED THAT THE ISSUE AS REGARDS MAKING OF FRESH CLAIM FO R DEDUCTION OTHERWISE THAN FILING REVISED RETURN IS LIMITED TO THE POWERS OF ASSESSING AUTHORITY AND DOES NOT IMPINGE ON THE POW ER OF THE TRIBUNAL U/S 254 OF IT ACT. FOLLOWING THIS RATIO, W E ARE SATISFIED THAT WHEN THE APPELLATE AUTHORITY INCLUDING THE LD . CIT(A), ENTERTAINS A NEW CLAIM AS SUCH, THE JUDGMENT RENDE RED BY HON'BLE APEX COURT IN GOETZE (INDIA) LTD (SUPRA) D OES NOT IMPINGE ON HIS POWER TO ENTERTAIN THE CLAIM FOR DEDUCTION O THERWISE THAN BY FILING REVISED RETURN BEFORE THE ASSESSING AUTHO RITY. THE LD. CIT(A), THEREFORE, CANNOT BE SAID TO HAVE COMMITTED ANY ERROR IN ENTERTAINING THE CLAIM FOR DEDUCTION MADE BEFORE HI M AS SUCH. 7. AS REGARDS DIRECTION GIVEN BY THE LD. CIT(A) TO ALLOW SET OFF OF ACCUMULATED EXCESS OF EXPENDITURE OVER INCOME OF TH E YEAR UNDER CONSIDERATION, THE FACTS IN THE PRESENT APPEALS ARE AKIN TO THE FACTS AS WERE AVAILABLE BEFORE THE HIGH COURT OF JU DICATURE OF RAJASTHAN IN THE CASE OF CIT VS. MAHARANA OF MEWAR CHARITABLE FOUNDATION (SUPRA) WHEREIN IT HAS CLEARLY BEEN LAI D DOWN THAT THE DEFICIT ARISING OUT EXCESS OF EXPENDITURE OVER INC OME IN THE PRECEDING YEAR SHOULD BE SET OFF AGAINST SURPLUS OF SUBSEQUENT YEAR, COMPUTING TAXABLE INCOME. IN THIS VIEW OF THE MATTER, THE JUDGMENT RENDERED BY HON'BLE RAJASTHAN HIGH COURT I N SUBSEQUENT DECISION IN THE CASE OF SHRI AKHEY RAM I SHWARI PRASAD TRUST VS CIT (SUPRA)BEING AT VARIANCE, IS NOT APPLI CABLE IN ASMUCH AS IN THAT THE CASE THE ASSESSEE WAS SEEKING EXEMPT ION U/S 11(1)(A) OF IT ACT EVEN THOUGH HE HAD INCURRED EXCE SSIVE EXPENDITURE OVER HIS INCOME FOR THE RELEVANT ASSESS MENT YEAR IN WHICH SUCH EXEMPTION WAS BEING SOUGHT. THE REVENUE IS NOT 5 PRECISELY ABLE TO SHOW THAT EXEMPTION U/S 11(1)(A) OF IT ACT STANDS DENIED IN EARLIER YEARS WHERE ASSESSEE CLAIM S TO HAVE INCURRED EXCESSIVE EXPENDITURE OVER ITS INCOME. SIN CE THE LD. CIT(A) ACTED WITHIN THE REALM OF POWERS VESTED IN H IM AND ISSUE AT HAND IS COVERED BY JUDGMENT RENDERED BY HON'BLE RAJ ASTHAN HIGH COURT IN MAHARANA OF MEWAR CHARITABLE FOUNDATION (S UPRA) NO INFIRMITY CAN BE SAID TO HAVE BEEN COMMITTED BY HIM IN ALLOWING SET OFF OF ACCUMULATED EXCESS OF EXPENDITURE OVER INCOME OF YEAR UNDER CONSIDERATION IN ALL THE APPEALS BEFORE THE T RIBUNAL. GROUND RAISED BY REVENUE IN ALL THE APPEALS, THEREFORE, ST ANDS REJECTED. 13. SO RESPECTFULLY FOLLOWING THE ABOVE REFERRED TO ORDER DATED 1.9.2009 IN ITA NO.385/JU/2009 AND OTHERS FOR ASSESSMENT YE AR 2006-07 IN THE CASE OF ITO, WARD 2, SRI GANGANAGAR AND OTHERS VS. KRISHI UPAJ MANDI SAMITI, RIDMALSAR AND OTHERS, THIS GROUND OF THE A SSESSEE IS ALLOWED. 7 . SO BY RESPECTFULLY FOLLOWING THE AFORESAID REFERR ED TO ORDER, WE ARE OF THE VIEW THAT THE LD. CIT(A) WAS FULLY JUSTI FIED IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE RELIEF ON ACCOUNT OF EXCESS EXPENDITURE INCURRED OVER INCOME CONSIDERING THE SAME AS APPLIC ATION OF INCOME UNDER SECTION 11(1)(A) OF THE ACT. 8. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISS ED. (ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MAY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20 TH MAY, 2014. 6 VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.