ACIT, Panchkula v. M/s Haryana Warehousing Corporation, Panchkula

ITA 1079/CHANDI/2010 | 2007-2008
Pronouncement Date: 31-03-2011 | Result: Dismissed

Appeal Details

RSA Number 107921514 RSA 2010
Assessee PAN AAACH3948K
Bench Chandigarh
Appeal Number ITA 1079/CHANDI/2010
Duration Of Justice 7 month(s) 15 day(s)
Appellant ACIT, Panchkula
Respondent M/s Haryana Warehousing Corporation, Panchkula
Appeal Type Income Tax Appeal
Pronouncement Date 31-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-03-2011
Date Of Final Hearing 11-06-2012
Next Hearing Date 11-06-2012
Assessment Year 2007-2008
Appeal Filed On 16-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL: B BENCH: CH ANDIGARH BEFORE SHRI D K SRIVASTAVA AM AND MS.SUSHMA CHOWLA JM ITA NO. 1079/CHANDI/2010 ASSESSMENT YEAR: 2007-08 A.C.I.T. CIRCLE PANCHKULA V. M/S HARYANA WAREHOUS ING CORPORATION BAY NO. 15-18 SECTOR 2 PANCHKULA PAN: AAACH 3948 K APPELLANT BY: SMT. JAISHREE SHARMA RESPONDENT BY: S/SHRI B.K. NOHARIA & RAVIKANT SHARM A ORDER D K SRIVASTAVA: THE APPEAL FILED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) ON 1.6.2010 ON THE FOLLOWING GROUNDS: 1 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS RIGHT IN HOLDING THAT THE ASSESSEE IS CAR RYING OUT ACTIVITIES INCIDENTAL TO THE MAIN OBJECTIONS OF THE CORPORATION FOR WHICH IT HAS BEEN GRANTED REGISTRATION U/S 12AA? 2 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS RIGHT IN HOLDING THAT THE ASSESSEE TRUST IS ELIGIBLE FOR DEDUCTION U/S 11 AND 12 OF THE INCOME-TAX ACT NOTWITHSTANDING THA T THE DOMINANT ACTIVITIES OF THE ASSESSEE ARE OF BUSINESS ACTIVITIES WITH PRO FIT MOTIVES AND NOT IN THE NATURE OF CHARITY. 3 WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS . 43 55 261/- ON ACCOUNT OF PRIOR PERIOD EXPENSES DESPITE THE FACT THAT THE ASSESSEE IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. 4 IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2. WE HAVE HEARD BOTH THE PARTIES. AT THE TIME OF H EARING IT WAS FAIRLY SUBMITTED THAT THE ISSUES RAISED IN FIRST TWO GROUN DS ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT RENDERED BY THE HON'BLE JU RISDICTIONAL HIGH COURT ON 30.8.2010 IN CIT C. HARYANA WAREHOUSING CORP IN I.T .A NO. 563 OF 2006. IN THIS VIEW OF THE MATTER FIRST TWO GROUNDS OF APPEAL ARE DISMISSED. 3. APROPOS THIRD GROUND THE DR RELIED UPON THE ORD ER PASSED BY THE AO IN THIS BEHALF WHILE THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE RELIED UPON THE ORDER PASSED BY THE LD. CIT(A). THE LD. CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE WITH THE FOLLOWING OBSERVATIONS:- THE THIRD GROUND OF APPEAL IS REGARDING ADDITION O F RS. 43 55 261/- AS PRIOR PERIOD EXPENSES. THE AO ASKED THE ASSESSEE WHY PRIO R PERIOD EXPENSES SHOULD NOT BE DISALLOWED. THE ASSESSEE STATED THAT THESE EXPENSES HAVE HARYANA WAREHOUSING CORPORATION 1079/CHANDI/2010 2 2 BEEN CLAIMED ON PAYMENT BASIS BEING CHARITABLE INST ITUTION. THE AO DID NOT ACCEPT THE REPLY OF THE ASSESSEE AND HELD THAT EXEM PTION J/S 11 AND 12 HAS BEEN DENIED AND THE ASSESSEE IS FOLLOWING MERCANTIL E SYSTEM OF ACCOUNTING AND HENCE PRIOR PERIOD EXPENSES ARE NOT ALLOWABLE. THE COUNSEL ON THE OTHER HAND ARGUED THAT THESE EXPENSES HAVE ARISEN D URING THE YEAR ONLY AND HAVE BEEN PAID DURING THE YEAR. THE AO HAS DISALLOW ED THESE EXPENSES ON THE GROUND THAT THE ASSESSEE HAS BEEN DENIED THE CL AIM U/S 11 AND 12 OF THE INCOME-TAX ACT. THE AO HAS NOT GIVEN ANY FINDING T HAT THESE EXPENSES HAVE NOT ARISEN DURING THE YEAR AND HOW THESE EXPENSES A RE NOT INNCIDENTAL TO THE RUNNING OF THE BUSINESS. ON CAREFUL CONSIDERATION OF THE FACTS IT IS FOUND THAT THE AO HAS MADE THE DISALLOWANCE OF PRIOR PERI OD EXPENSES ON THE GROUND THAT EXEMPTION U/S 11 AND 12 HAS BEEN DENIED TO THE APPELLANT. THE SAME HAS BEEN ALLOWED IN THE PREVIOUS PARAGRAPH. MO REOVER IN THE CASE OF CHARITABLE INSTITUTION THE APPLICATION OF INCOME IS CONSIDERED. THE ADDITION MADE BY THE AO IS NOT JUSTIFIED AND THE SAME IS ORD ERED TO BE DELETED. THIS GROUND OF APPEAL IS ALLOWED. 4. THE FINDINGS RECORDED BY THE LD. CIT(A) HAVE NOT BEEN REBUTTED BY THE DEPARTMENT BEFORE US. WE THEREFORE CONFIRM THE OR DER PASSED BY THE LD. CIT(A) IN THIS BEHALF. GROUND NO. 3 IS ALSO DISMISSED. 5. APPEAL FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED ON MARCH 2011 (SUSHMA CHOWLA) ( D K SRIVASTAVA) JUDICIAL MEMBER ACCOUNTANT MEMBER CHANDIGARH: THE MARCH 2011 SURESH COPY TO: 1. THE APPELLANT A.C.I.T. CIRCLE PANCHKULA 2. THE RESPONDENT M/S HARYANA WAREHOUSING CORPORAT ION PANCHKULA 3. THE CIT(A) PANCHKULA 4. THE LD. CIT PANCHKULA 5. THE D.R INCOME-TAX DEPARTMENT CHANDIGARH TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT CHANDIGARH