Dy. CIT,3(1) , Bhopal V. M/s Krishi Upaj Mandi Samiti , Mandi Compound, Sehore

ITA 824/Ind/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6463 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 30-04-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 12-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V J BORICHA
• Assessee Lawyers: N O N E
• Keywords: Depreciation; Charitable institution
• Section: 143(3); 12AA; 147

Judgement Text

[ITA NO.824/IND/2017] [M/S. KRISHI UPAJ MANDI SAMITI, SEHORE] , , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.824/IND/2017 ASSESSMENT YEAR: 2008-09 DCIT - 3(1) BHOPAL / VS. M/S. KRISHI UPAJ MANDI SAMITI MANDI COMPOUND SEHORE ( APPELLANT ) ( REVENUE ) P.A. NO. AAALK0364P APPELLANT BY SHRI V.J. BORICHA, SR. D.R. RESPONDENT BY N O N E DATE OF HEARING: 30.04.2019 DATE OF PRONOUNCEMENT: 08.05.2019 / O R D E R PER KUL BHARAT, J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDER OF THE CIT(A)-2, BHOPAL DATED 19.9.2017 PERTAINING TO THE [ITA NO.824/IND/2017] [M/S. KRISHI UPAJ MANDI SAMITI, SEHORE] 2 ASSESSMENT YEAR 2008-09. THE ONLY EFFECTIVE GROUND I N THE PRESENT APPEAL I.E. GROUND NO.1 READS AS UNDER: THE LD. CIT HAS ERRED IN FACTS AND CIRCUMSTANCES O F THE CASE BY DIRECTING THE ASSESSING OFFICER TO ASSESS THE INCOM E OF THE APPELLANT AT RS.NIL. 2. AT THE TIME OF HEARING, NO ONE APPEARED ON BEHALF OF THE ASSESSEE. IT IS NOTICED THAT THERE WAS NO REPRES ENTATION FOR THE LAST 3 HEARINGS. IT IS ALSO FOUND THAT NOTICE OF HEARING WAS DULY SERVED UPON THE ASSESSEE. THEREFORE, THE APPEALS ARE TAKEN UP FOR HEARING IN THE ABSENCE OF THE ASSESSEE. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT THE ASSESSEE FILED A RETURN OF INCOME DECLARING TO TAL INCOME AT RS.NIL. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLE D AS THE ACT) ON 31.12.2010 AND INCOME WAS ASSESSED AT RS.14,27,380/-. SUBSEQUENTLY, THE CASE WAS REOPENED U /S 147 OF THE ACT AND THE ASSESSMENT WAS FRAMED U/S 147 R.W.S. 143(3) OF THE ACT ON 22.3.2016. THE A.O. WH ILE MAKING REASSESSMENT MADE ADDITION OF RS.4,54,813/- IN [ITA NO.824/IND/2017] [M/S. KRISHI UPAJ MANDI SAMITI, SEHORE] 3 RESPECT OF EXCESS CLAIM OF DEPRECIATION. AGGRIEVED B Y THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A). 3. LD. D.R. SUPPORTED THE ORDER OF THE A.O. AND SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED TO DELET E THE ADDITION. 4. WE HAVE HEAD THE LD. D.R. AND PERUSED THE MATERIALS AVAILABLE ONE RECORD. THE LD. CIT(A) AFTER CONSIDERIN G THE FACTS AND THE POSITION OF LAW, DECIDED THE ISSUE UNDE R PARA- 7, WHICH READS AS UNDER: 7. ALL THE GROUNDS OF APPEAL ARE BEING TAKEN UP TO GETHER. IT IS SEEN THAT THE APPELLANT HAS OBTAINED REGISTRATION U/S 12AA OF THE ACT W.E.F. 1.4.2003. IN THE CASE OF ORIGINAL ASSESSMENT U/S 143(3) DATED 31 .12.2010, AN APPEAL WAS PREFERRED BY THE APPELLANT AGAINST THE ADDITIONS MA DE BY THE A.O. IN THE ASSESSMENT ORDER AND THE LD. CIT(A)-1, BHOPAL HAD D ECIDED THAT AS THE EXPENDITURE AFTER ADDITION THE DISALLOWED EXPENSES IS MORE THAN 85% OF THE TOTAL RECEIPTS OF THE APPELLANT, HENCE THERE WAS NO INCOM E LIABLE FOR TAX. AS PER THE APPEAL ORDER OF THE LD. CIT(A)-1, BHOPAL REPRODUCED ABOVE, IT WAS CLEARLY MENTIONED THAT THE APPLICATION OF FUNDS OF RS.5,29, 13,937/- WAS IN EXCESS OF 85% OF THE TOTAL RECEIPTS OF THE APPELLANT AT RS.5, 17,82,032/-. NOW EVEN IF, THE TOTAL AMOUNT OF RS.4,54,813/- ADDED BY THE A.O. IS NOT CONSIDERED AS APPLICATION OF FUNDS FOR CHARITABLE PURPOSE, THE BALANCE AMOUNT OF APPLICATION OF FUNDS WOULD BE RS.5,24,59,124/- (RS.5,29,13,937 RS.4,54 ,813), WHICH IS IN EXCESS OF 85% OF THE TOTAL RECEIPTS OF THE APPELLANT. THUS, THERE WAS NO INCOME LIABLE FOR TAX DURING THE YEAR UNDER CONSIDERATION AND THE INC OME HAD TO BE ASSESSED AT RS.NIL. THE A.O. IS THEREFORE, DIRECTED TO ASSESS THE INCOME OF THE APPELLANT FOR THE YEAR UNDER CONSIDERATION AT RS.NIL. [ITA NO.824/IND/2017] [M/S. KRISHI UPAJ MANDI SAMITI, SEHORE] 4 5. THE BASIS OF DELETING THE ADDITION BY THE LD. CIT( A) IS THAT EVEN THE EXCESS CLAIM OF DEPRECIATION IS DISALLOWE D, IN THAT EVENT ALSO, THE AMOUNT WOULD NOT BE TAXABLE AS THE ASSESSEE IS REGISTERED U/S 12AA OF THE ACT. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THIS REASONING OF THE LD. CIT(A). THE REVENUE COULD NOT REBUT THE FACT THAT EVEN IF IT IS DISALLOWED, THE INCOME WOULD NOT BE TAXABLE. THEREFO RE, WE DO NOT SEE ANY REASON TO INTERFERE IN THE FINDING OF THE LD. CIT(A). THE GROUND RAISED BY THE REVENUE IS DISMISS ED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 08 . 05.2019. SD/- (MANISH BORAD) SD/- (KUL BHARAT) A CCOUNTANT MEMBER JUDICIALMEMBER INDORE; DATED : 08/05/2019 VG/SPS [ITA NO.824/IND/2017] [M/S. KRISHI UPAJ MANDI SAMITI, SEHORE] 5 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE