M/S M.P.STATE CO-OPERATIVE HOUSING FEDERATION LTD., v. THE ACIT 1(2),

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER ITA NOS. 22 & 23/IND/09 A.YS. 2004-05 AND 2005-06 M.P. STATE CO. OP.HOUSING FEDERATION LIMITED BHOPAL PAN AAAAM-1593M APPELLANT VS ASSTT. COMMISSIONER OF INCOME TAX 1(2) BHOPAL APPELLANT APPELLANT BY : SHRI S.S. DESHPANDE RESPONDENT BY : SMT. APARNA KARAN SR. DR O R D E R PER BENCH THESE APPEALS ARE BY THE ASSESSEE FOR THE ASSESSME NT YEARS 2004-05 AND 2005-06 AGAINST THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY DATED 17.10.2008 WHEREIN THE ON LY COMMON GROUND TAKEN IS AS UNDER - 2 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN MAINTAINING THE ADDITION OF RS.7 28 532/- AND RS.18 63 739/- BEING THE MISCELLANEOUS INCOME OF T HE ASSESSEE NOT ELIGIBLE FOR DEDUCTION U/S 80P(2) OF T HE ACT. ALTERNATIVELY IT WAS CLAIMED THAT THE IMPUGNED ADD ITIONS MAY BE DELETED OR THE ACTUAL EXPENSES INCURRED OR T HE OTHER PROPORTIONATE EXPENSES MAY BE ALLOWED AS DEDUCTION. 2. DURING HEARING WE HAVE HEARD SHRI S.S. DESHPANDE CA AND SMT. APARNA KARAN SR. DR. THE CRUX OF ARGUMENT S ON BEHALF OF THE ASSESSEE ON SECTION 80P(2) IS THAT TH E ASSESSEE BEFORE THE LEARNED ASSESSING OFFICER AS WELL AS BEF ORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) PROVED THAT THE EXPENSES WERE INCURRED AND WERE DEBITED TO PROFIT A ND LOSS ACCOUNT THEREFORE THESE ARE TO BE DEDUCTED FROM T HE BUSINESS INCOME. HOWEVER THE LD. SENIOR DEPARTMENTAL REPRES ENTATIVE STRONGLY DEFENDED THE IMPUGNED ORDER AND LED US TO VARIOUS PAGES OF THE ASSESSMENT ORDER AS WELL AS IMPUGNED O RDER. ON A QUERY FROM THE BENCH ABOUT THE NATURE OF INCOME THE LD. 3 COUNSEL FOR THE ASSESSEE FAIRLY AGREED NOT TO PRESS THE GROUND OF DEDUCTION U/S 80P(2) OF THE ACT BUT ADDED THAT N ETTING OF EXPENSES INCURRED TO EARN SUCH INCOME MAY BE ALLOWE D. IN VIEW OF THESE FACTS AND SINCE THE NATURE OF MISCELL ANEOUS EXPENSES WAS NOT FULLY EXPLAINED THEREFORE THE AS SESSING OFFICER IS DIRECTED TO SEE THE NEXUS BETWEEN THE TW O AND DECIDE THE ISSUE AFRESH AS PER THE PROVISIONS OF THE ACT CONSEQUENTLY TO THIS LIMITED EXTENT BOTH THESE APPEALS OF THE A SSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. IF THE ASSESSEE P ROVES THE NEXUS THEN NETTING MAY BE ALLOWED. RESULTANTLY BOTH THESE APPEALS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING ON 22 ND APRIL 2010 (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER APRIL 22 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE *DBN/