The ACIT, 1 (2), v. M/s Krshi Upaj Mandi Samiti, Itarsi

ITA 250/IND/2008 | misc
Pronouncement Date: 26-02-2010 | Result: Dismissed

Appeal Details

RSA Number 25022714 RSA 2008
Assessee PAN AAALK0572B
Bench Indore
Appeal Number ITA 250/IND/2008
Duration Of Justice 1 year(s) 8 month(s) 23 day(s)
Appellant The ACIT, 1 (2),
Respondent M/s Krshi Upaj Mandi Samiti, Itarsi
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 26-02-2010
Date Of Final Hearing 26-02-2010
Next Hearing Date 26-02-2010
Assessment Year misc
Appeal Filed On 02-06-2008
Judgment Text
PAGE 1 OF 7 - I.T.A.NOS. 249 & 250/IND/2008 KUMS ITARSI IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : AAALK0572B I.T.A.NO.249 & 250/IND/2008 A.Y. : 2003-04 & 2004-05 ACIT M/S. KRISHI UPAJ MANDI SAMITI 1(2) VS ITARSI BHOPAL APPELLANT RESPONDENT APPELLANT BY : SHRI V.K.KARAN SR. DR RESPONDENT BY : NONE DATE OF HEARING : 26.02.2010 O R D E R PER V.K. GUPTA A.M. BOTH THESE APPEALS OF THE REVENUE BELONG TO THE SAM E ASSESSEE HENCE THESE WERE HEARD TOGETHER AND THESE ARE BEIN G DISPOSED OF THROUGH THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE . 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. HENCE WE PROCEEDED TO DECIDE THESE APPEALS ON MERITS AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE. 3. FIRST WE SHALL TAKE UP THE REVENUES APPEAL IN I.T .A.NO. 249/IND/2008. PAGE 2 OF 7 - I.T.A.NOS. 249 & 250/IND/2008 KUMS ITARSI 4. GROUND NO.1 READS AS UNDER :- IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS ON ACCOU NT OF PENSION FUND AMOUNTING TO RS. 1204587/- BY HOLDING THAT THE SAME ARE DEDUCTION IN VIEW OF SECTION 36(1)(XII) OF INCOME- TAX ACT 1961 EVEN WHEN THE SAME CANNOT BE ALLOWED TO ASSESS AS IT HAS NOT UTILIZED THE SAME FOR PURPOSE MEANT FOR AND THE INTEREST ACCRUED ON SUCH AMOUNT IS ALSO TAX ABLE. 5. THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY CONTENDE D THAT THIS ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE CASE OF KUMS BURHANPUR AS REPORTE D IN 12 ITJ 12 RELEVANT PAGES 21 23 & 24. HE FURTHER CONTENDED TH AT THIS ISSUE HAD NOT RESTORED TO THE FILE OF A.O. FOR THE REASON THAT IF THE ASSESSEE HAD CLAIMED EXPENDITURE ON PROVISION BASIS HENCE IN THE YEAR OF ACTUAL EXPENDITURE NO FURTHER DEDUCTION SHOULD HAVE BEEN CLAIMED. ACCO RDINGLY WE ALSO RESTORE THE ISSUE TO THE FILE OF A.O. FOR RE-ADJUDI CATION OF THIS ISSUE IN ACCORDANCE WITH THE RATIO OF THE DECISION OF THE TR IBUNAL IN THE CASE OF KUMS (SUPRA). 6. GROUND NOS. 2 & 3 READ AS UNDER :- 2. IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITIONS ON ACCOU NT PAGE 3 OF 7 - I.T.A.NOS. 249 & 250/IND/2008 KUMS ITARSI OF DISALLOWANCE OF DEPRECIATION CLAIM AMOUNTING TO RS. 14 16 576/- BY HOLDING THAT IT IS CLAIMED AS PE R LAW AS CONTAINED IN SECTION 32 OF INCOME-TAX ACT 1961 EVEN WHEN THE ASSESSEE FAILED TO SUBMIT THE SPECIFI C DOCUMENTS REQUIRED UNDER THE ACT FOR ALLOWANCE OF CLAIM OF DEPRECIATION U/S 32. 3. IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION ON ACCOUN T OF DISALLOWANCE OF DEPRECIATION CLAIM AMOUNTING TO RS. 14 16 576/-WITHOUT APPRECIATING THE REASONS GIV EN BY THE ASSESSING OFFICER FOR MAKING SUCH DISALLOWANCES AND FINDING OF CIT(A) ARE CONTRARY TO THE MATERIAL PLACED ON RECORD. 7. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THA T THE DISPUTE INVOLVED IN THESE GROUNDS WAS REGARDING THE ALLOWAB ILITY OF DEPRECIATION ON THE W.D.V. AS ON 1.4.2002 BY COMPUTING THE SAME ON THE BASIS OF DEEMED DEPRECIATION OUT OF ACTUAL COST OF SUCH FIXE D ASSETS. HE REFERRED TO PARA 76 AT PAGE 16 OF THE ASSESSMENT ORDER WHEREIN THE A.O. HAD POINTED OUT THAT THE VALUE OF FIXED ASSETS HAD BEEN SHOWN O N 1.4.2002 WAS NOT W.D.V. BUT THE HISTORICAL COST. AT THIS STAGE TH E ATTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE WAS DRAWN TO THE FINDIN GS OF THE LD. CIT(A) PAGE 4 OF 7 - I.T.A.NOS. 249 & 250/IND/2008 KUMS ITARSI AT PAGE 3 OF THE APPELLATE ORDER WHEREIN THE LD. C IT(A) HAD STATED THAT THE VALUE AS ON 1.4.2002 WAS W.D.V. WORKED OUT BY T HE ASSESSEE BY DEDUCTING NOTIONAL DEPRECIATION. 8. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THIS WAS A DISPUTE IN NUMBER OF CASES OF KUMS AND THE MATTER H AD BEEN RESTORED TO VERIFY THESE FACTS. SINCE WE ARE PARTY TO SUCH DECI SIONS HENCE WE RESTORE THIS ISSUE TO THE FILE OF A.O. TO VERIFY THESE FACT S AND IF THE CLAIMS OF THE ASSESSEE ARE FOUND TO BE CORRECT THEN THERE WOULD NOT BE ANY REQUIREMENT FOR MAKING ADJUSTMENT FOR REDUCING THE QUANTUM OF D EPRECIATION AS CLAIMED BY THE ASSESSEE. IF THE FACTS EMERGE OTHERW ISE THEN THE A.O. WILL COMPUTE THE QUANTUM OF DEPRECIATION AS PER LAW. IT IS NEEDLESS TO MENTION THAT AN ADEQUATE OPPORTUNITY OF HEARING SHALL BE PR OVIDED TO THE ASSESSEE IN DOING SO. 9. GROUND NO. 4 READS AS UNDER :- IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUN T OF EXPENSES OF CAPITAL NATURE OF RS. 2 21 714/- HOLDIN G THAT THE A.O. HAD DISALLOWED THE CLAIM AGAINST THE PRINCIPLE S OF NATURAL JUSTICE WITHOUT REBUTTING TO ASSESSEE EVEN WHEN THE SAME WERE DISALLOWED BEING OF CAPITAL NATURE. PAGE 5 OF 7 - I.T.A.NOS. 249 & 250/IND/2008 KUMS ITARSI 10. THE FACTS IN BRIEF ARE THAT THE IMPUGNED EXPEND ITURE WAS DISALLOWED BY THE ASSESSING OFFICER TREATING THE SA ME AS CAPITAL NATURE. HOWEVER ON APPEAL THE LD. CIT(A) DELETED SUCH DIS ALLOWANCE FOR THE REASON THAT THE IMPUGNED EXPENDITURE HAD BEEN INCUR RED ON REPAIRS AND MAINTENANCE OF THE ROADS INSPITE OF THE MANDI YARDS HENCE WAS OF REVENUE. AGGRIEVED BY THIS THE REVENUE IS IN APPEA L BEFORE US. 11. THE LD. DEPARTMENTAL REPRESENTATIVE PLACED STRONG R ELIANCE ON THE ORDER OF A.O. 12. ON DUE CONSIDERATION OF FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT THE REVENUE NATURE OF EXPENDITURE CANNOT BE DISPUTED. HENCE WE CONFIRM THE FINDINGS OF THE LD. CIT(A). THUS TH IS GROUND OF THE REVENUE IS DISMISSED. 13. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS P ARTLY ALLOWED FOR STATISTICAL PURPOSES. 14. NOW WE SHALL TAKE UP REVENUES APPEAL IN I.T.A.NO. 250/IND/2008 WHEREIN THE REVENUE HAS RAISED FOLLOW ING GROUNDS :- 1. IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIONS ON ACCOU NT OF FIXED FUND AND RESERVE FUND AMOUNTING TO RS. 23 34 451/- AND RS. 58 36 127/- RESPECTIVELY BY HOLDING THAT TH E SAME ARE DEDUCTIBLE IN VIEW OF SECTION 36(1)(XII) OF INCOME- TAX ACT PAGE 6 OF 7 - I.T.A.NOS. 249 & 250/IND/2008 KUMS ITARSI 1961 EVEN WHEN THE SAME CANNOT BE ALLOWED TO ASSES SEE AS IT HAS NOT UTILIZED THE SAME FOR PURPOSE MEANT FOR AND THE INTEREST ACCRUED ON SUCH AMOUNT IS ALSO TAXABLE. 2. IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION ON ACCOUN T OF FIXED FUND AND RESERVE FUND AMOUNTING TO RS. 23 34 451/- AND RS. 58 36 127/- RESPECTIVELY WITHOUT APPRECIATI NG THE REASONS GIVEN BY THE ASSESSING OFFICER FOR MAKING S UCH DISALLOWANCES AND FINDINGS OF CIT(A) ARE CONTRARY T O THE MATERIAL PLACED ON RECORD. 15. THE LEARNED COUNSEL SUBMITTED THAT THIS ISSUE WAS ALSO COVERED BY THE DECISION OF THE TRIBUNAL IN THE CAS E OF KUMS BURHANPUR (SUPRA) WHEREIN THESE EXPENSES WERE ALLOWABLE AND REFERRED TO THE RELEVANT OBSERVATIONS AT PAGES 14 & 15 OF THE REPOR T. 16. ON DUE CONSIDERATION OF FACTS AND MATERIAL ON RECOR D WE FIND THAT THE IMPUGNED PAYMENTS HAVE BEEN MADE AS PER TH E PROVISIONS OF MANDI SAMITI ACT HENCE ARE DEDUCTIBLE IN VIEW OF THE SECTION 36(1)(XII) OF THE INCOME-TAX ACT 1961. RELEVANT FINDINGS OF T HE LD. CIT(A) HAVE ALSO REMAINED UNCONTROVERTED BEFORE US. ACCORDINGLY BOTH THE GROUNDS OF THE REVENUE ARE DISMISSED. PAGE 7 OF 7 - I.T.A.NOS. 249 & 250/IND/2008 KUMS ITARSI 17. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED 18. TO SUM UP REVENUES APPEAL IN I.T.A.NO. 249/IND/200 8 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND I.T.A.N O. 250/IND/2008 STANDS DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 26 TH FEBRUARY 2010. CPU* 262