THE ITO-2, Ratlam V. THE ALOTE SAHAKARI MARKETING SANSTHA MYDT., Ratlam

ITA 848/IND/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6045 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-08-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 10-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ARPIT GAUR CAS
• Keywords: Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE , , BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER . . /. I.T.A. NO. 848 /IND/2016 [[ / ASSESSMENT YEAR : 2013 - 14 INCOME - TAX OFFICER - 2, RATLAM VS. M / S . THE ALOTE SAHAKARI MARKETING SANSTHA MYDT., JAGDEV GANJ, ALOTE, DISTT. RATLAM / APPELLANT / RESPONDENT . . ./ PAN: AABAT1758J / APPELLANT BY : SHRI SATISH SOLANKI, DR / RESPONDENT BY : SHRI ANIL KAMAL GARG AND SHRI ARPIT GAUR, CAS / DATE OF HEARING : 29 .0 5 .2018. / DATE OF PRONOUNCEMENT : 07 .0 6 .2018 M/S. THE ALOTE SAH.SANSTHA MKTG.MYDT., RATLAM - : 2 : - / O R D E R PER KUL BHARAT , J.M. : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), UJJAIN, DATED 31.05.2016 AND RELATES TO ASSESSMENT YEAR 2013 - 14. 2 . BRIEF LY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS MARKETING SOCIETY REGISTERED UNDER COOPERATIVE SOCIETY ACT, 1960. THE ASSESSEE DERIVES INCOME FROM MARKETING OF AGRICULTURAL PRODUCE AND WHOLESALE PDS. THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 13,720/ - WAS FILED ON 31.03.2014. THE AO MADE ADDITION S OF RS. 22,25, 979/ - U/S 80P(2)(A)(III) OF THE INCOME - TAX ACT, 1961, (HEREINAFTER REFERRED TO AS THE ACT), RS. 91,023/ - U/S 80P(2)(E) OF THE ACT, RS . 6,542/ - U/S 80P(2) (D) OF THE ACT, RS. 23,00,000/ - ON ACCOUNT OF STATUTORY EXPENSES, RS. 4,99,600/ - ON ACCOUNT OF INCOME TAX AND RS. 2,83,305/ - ON ACCOUNT OF P. F. ON APPEAL, THE LD. CIT(A) HAS DELETED M/S. THE ALOTE SAH.SANSTHA MKTG.MYDT., RATLAM - : 3 : - SOME OF THE ADDITIONS AND ALSO GIVEN PART RELIEF. THE REVENUE HAS COME UP IN APPEAL AGAINST THESE DELETION OF ADDITIONS. 3 . THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL : - ( 1 ) WHETHER THE LD. CIT(A) WAS JUSTIFIED IN ALLOWING DEDUCTION OF RS. 6,10, 263/ - U/S 80P(2) EVEN WHEN ASSESSEE WAS NOT ELIGIBLE FOR THE SA ID DEDUCTIONS AS PER RETURN OF INCOME. ( 2 ) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE ADDITION OF RS. 22,25,979/ - TO RS. 2,74,453/ - ON ACCOUNT OF DEDUCTION U/S 80P(2)(E) OF THE INCOME - TAX ACT, 1961, EVEN WHE N ASSESSEE HAS MERELY RECEIVED COMMISSION INCOME AND ASSESSEE HAS NOT SHOWN BEFORE AO THAT IT HAS MARKETED AGRICULTURAL PRODUCE OF ITS MEMBERS ONLY. M/S. THE ALOTE SAH.SANSTHA MKTG.MYDT., RATLAM - : 4 : - ( 3 ) THE LD. CIT(A) WAS NOT JUSTIFIED IN GRANTING RELIEF U/S 80P(2)(E) BASED ON ADDITIONAL EVIDENCES WITHOUT FOLLOWING PROCEDURE AS PER RULE 46A . ( 4 ) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 23,00,000/ - ON ACCOUNT OF STATUTORY FUND AS THE SAME WAS APPROPRIATION OF FUNDS AND NOT IN NATURE OF EXPENSES. ( 5 ) WHETHE R IN THE FACTS AND CIRCUMSTANCES OF THE CASE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 4,99,600/ - ON ACCOUNT OF INCOME TAX DEBITED WHICH IS NOT ALLOWABLE. ( 6 ) WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE CIT(A) HAS ERRED IN DELETING THE ADDITION O F RS. 2,83,305/ - ON ACCOUNT OF PROVIDENT FUND PAYABLE EVEN WHEN NO ANY DOCUMENTARY EVIDE N CE M/S. THE ALOTE SAH.SANSTHA MKTG.MYDT., RATLAM - : 5 : - WAS PRODUCED BY THE ASSESSEE REGARDING ITS PAYMENT. 4 . AT THE OUT - SET, T HE LD. COUNSEL FOR THE ASSESSEE HAS REITERATED THE SUBMISSION S AS MADE BEFORE THE LD. CIT(A). F OR THE SAKE OF CLARITY, WE ARE REPRODUCING THE SAME : - ( 1 ) 143 ( 10 . 6 , 10 , 263 / - [ 143 ( 1 ) [ . 6 , 10 , 263 / - 6 , 10 , 263 / - , [ ( PDS ) , . 6 , 10 , 263 / - 80 P ( 2 )( E ) . . . . [ [ . . [ [ . . M/S. THE ALOTE SAH.SANSTHA MKTG.MYDT., RATLAM - : 6 : - . . . . [ ( 2 ) : - , . . . 22 , 25 , 979 / - 80 P ( 2 )( A )( III ) [ . 38 , 40 , 01 , 950 / - 5 , 40 , 04 , 300 / - [ - 80 P ( 2 )( A )( III ) THE MARKETING OF THE AGRICULTURE PRODUCE GROWN BY ITS MEMBERS. ( 3 ) [ : - . 23 , 10 , 000 / - [ , M/S. THE ALOTE SAH.SANSTHA MKTG.MYDT., RATLAM - : 7 : - 80 P ( 2 )( A )( III ) ( 4 ) : - [ . 4 , 99 , 600 / - [ [ 2010 - 11 [ U - 264 / 2012 - 13 03 / 12 / 2015 , . 4 , 99 , 600 / - , 80 P ( 2 )( A )( III ) [ [ ( 5 ) . . : - . 2 , 83 , 306 / - . . . . . 2 , 83 , 306 / - 80 P ( 2 )( A )( III ) [ M/S. THE ALOTE SAH.SANSTHA MKTG.MYDT., RATLAM - : 8 : - 271 ( 1 )( C ) [ [ GROUND NOS. 1 TO 3 : 5 . GROUND NOS. 1 TO 3 ARE INTER - CONNECTED. 6 . THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE AO REGARDING THESE GROUNDS. 7 . T HE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION AS MADE IN THE WRITTEN SUBMISSIONS. 8 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LD. CIT(A) HAS DELETED THE ADDITIONS WITHOUT CALLING A REMAND REPORT FROM THE ASSESSING OFFICER ONLY ON THE BASIS THAT INCOME OF THE ASSESSEE IS EXEMPT U/S 80P(2)(E) OF THE INCOME - TAX ACT, 1961. IN OUR CONSIDERED VIEW, THE LD. CIT(A) OUGHT TO HAVE CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. WE, THEREFORE, RESTORE THESE GROUNDS TO THE FILE OF THE LD. CIT(A) FOR DECISION AFRESH. THE LD. CIT(A) WOULD CALL FOR A REMAND M/S. THE ALOTE SAH.SANSTHA MKTG.MYDT., RATLAM - : 9 : - REPORT FROM THE ASSESSING OFFICER AND THEN DECIDE THESE GROUNDS. THE LD. DEPARTMENTAL REPRESENTATIVE DID NOT OBJECT AND AGREED TO IT. GROUND NOS. 1 TO 3 ARE ALLOWED FOR STATISTICAL PURPOSES. 9 . GROUND NO. 4 IS AGAINST THE DELETION OF ADDITION OF RS. 23 LAKHS ON ACCOUNT OF STATUTORY FUND. 10 . THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE AO AND SUBMITTED WHETHER THE ASSESSEE IS ENTITLED FOR EXEMPTION IS A MATTER TO BE EXAMINED . 11 . THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A) AND SUBMITTED THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION WHEN THE INCOME OF THE ASSESSEE IS EXEMPT U/S 80 P (2)(A)(III) OF THE ACT. 12 . WE HAVE HEARD THE RIVAL SUBMISSIONS . THE EXPLANATION BEFORE THE AUTHORITIES BELOW REGARDING STATUTORY FUND WAS THAT THE INCOME OF THE ASSESSEE BEING EXEMPT, THERE IS NO M/S. THE ALOTE SAH.SANSTHA MKTG.MYDT., RATLAM - : 10 : - JUSTIFICATION OF MAKING ADDITION. WE FIND THAT THE AO HAS OBS ERVED THAT THE STATUTORY FUND IS CREATED FOR PAYMENT OF INCOME TAX, WHICH WAS CLAIMED AS EXPENDITURE. HOWEVER, THE LD. CIT(A) WITHOUT EXAMINING THE ALLOWABILITY OF TH E EXPENDITURE, MERELY STATED THAT SINCE THE INCOME OF THE ASSESSEE IS EXEMPT U/S 80 P(2)(E), THERE WAS NO NEED OF MAKING ANY ADDITION. WE, THEREFORE, RESTORE TH IS GROUND ALSO TO THE FILE OF THE LD. CIT(A) FOR DECISION AFRESH , WITH THE DIRECTION THAT HE WOULD CALL FOR A REMAND REPORT FROM THE ASSESSING OFFICER AND THEN DECIDE TH IS GROUND . 13 . GROUND NO. 5 IS AGAINST THE DELETION OF ADDITION OF RS. 4,99,000/ - ON ACCOUNT OF INCOME TAX DEBITED. 14 . THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE AO. 15 . THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT A SUM OF RS. 4,99,600/ - WAS DEPOSITE D FOR THE ASSESSMENT YEAR 2010 - 11 AGAINST THE DEMAND RAISED AND VIDE ORDER NO. M/S. THE ALOTE SAH.SANSTHA MKTG.MYDT., RATLAM - : 11 : - U - 264/2012 - 13 DATED 03.12.2015 , IT WAS CEASED. THE ASSESSEE DEBITED THE EXPENSES ON ACCOUNT OF INCOME TAX. LD. CIT(A) AGREED TO IT AND DELETED THE SAME STATING THAT THE INCOME OF THE ASSESSEE WAS EXEMPT U/S 80P(2)(A)(III) OF THE ACT. 16 . WE HAVE HEARD THE RIVAL SUBMISSIONS . WE RESTORE THIS GROUND ALSO TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTION THAT HE WOULD CALL FOR THE REMAND REPORT FROM THE AO. THE AO SHALL VERIFY THE DETAILS AND SHALL FIND OUT AS TO WHETHER THIS AMOUNT OF INCOME TAX HAS BEEN PAID OR NOT. AFTER RECEIVING THE REMAND REPORT, THE LD. CIT(A) SHALL DECIDE THE MATTER AFRESH. 17 . GROUND NO. 6 RELATES TO DELETION OF THE ADDITION OF RS. 2,83,305 / - ON ACCOUNT OF PROVIDENT FUND. 18 . THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE AO AND CONTENDED THAT NO EVIDENCE WAS PRODUCED BY THE ASSESSEE INSPITE OF OPPORTUNITY GIVEN AND M/S. THE ALOTE SAH.SANSTHA MKTG.MYDT., RATLAM - : 12 : - THE AMOUNT OF RS. 2,83,305/ - WAS RIGHTLY ADDED TO THE INCOME OF THE ASSESSEE. 19 . THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE AMOUNT OF RS. 2,83,30 5 / - WAS DEPOSITED IN P. F. ACCOUNT. THIS INCOME WAS EARNED OUT OF THE AMOUNT OF MEMBERS OF SANSTHA ON MARKETING OF WHEAT THROUGH STATE CIVIL SUPPLY CORPORATION AND NO SEPARATE INCOME WAS RECEIVED. HENCE, IT WAS EXEMPT. THE LD. CIT(A) DELETED THE ADDITION ON THE GROUND THAT THE INCOME OF THE ASSESSEE WAS EXEMPT U/S 80P(2)(A)(III) OF THE ACT. 20 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE RESTORE THIS GROUND ALSO TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTION THAT HE WOULD CALL FOR THE REMAND REPORT FROM THE AO AND THEN DECIDE THE MATTER AFRESH . THE AO SHALL VERIFY TH E DETAILS SUBMITTED BY THE ASSESSEE. GROUND NO. 6 IS ALSO ALLOWED FOR STATISTICAL PURPOSES. M/S. THE ALOTE SAH.SANSTHA MKTG.MYDT., RATLAM - : 13 : - 21 . IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES IN VIEW OF OUR OBSERVATIONS MADE ABOVE. THE ORDER PRONOUNCED IN THE OPEN COURT ON 0 7 . 0 6 .2018 . S D / - ( ) S D / - ( ) (MANISH BORAD) (KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER INDORE; DATED : 0 7 /0 6 /2018 CPU * / SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUARD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE