Agricultural Market Committee, Narasapuram v. ITO, Palakol

ITA 230/VIZ/2009 | 2005-2006
Pronouncement Date: 21-01-2010 | Result: Partly Allowed

Appeal Details

RSA Number 23025314 RSA 2009
Assessee PAN AAALA0360K
Bench Visakhapatnam
Appeal Number ITA 230/VIZ/2009
Duration Of Justice 8 month(s) 14 day(s)
Appellant Agricultural Market Committee, Narasapuram
Respondent ITO, Palakol
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted DB
Tribunal Order Date 21-01-2010
Date Of Final Hearing 04-12-2013
Next Hearing Date 04-12-2013
Assessment Year 2005-2006
Appeal Filed On 07-05-2009
Judgment Text
ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY JUDICIAL MEMBER SL. NO. CASE NO. ASST. YEAR PAN NO. APPELLANTS RESPONDENTS 1 ITA 226/VIZ/2009 2005-06 AAALA 0360K AMC GOPALAPU RAM ITO WARD-2 TANUKU 2 ITA 228/VIZ/2009 2005-06 AAALA 0388F AMC PENUGOND A ITO WARD-1 TANUKU 3 ITA 229/VIZ/2009 2005-06 AAALA 0388F AMC PENUGOND A ITO WARD-1 TANUKU 4 ITA 230/VIZ/2009 2006-07 AAALA 0389E AMC NARSAPUR AM ITO WARD-1 PALAKOLE 5 ITA 231/VIZ/2009 2005-06 AAALA 0352K AMC TANUKU I TO WARD-2 TANUKU 6 ITA 232/VIZ/2009 2006-07 AAALA 0352K AMC TANUKU I TO WARD-2 TANUKU 7 ITA 234/VIZ/2009 2006-07 AAALA 0351L AMC ATTILI I TO WARD-1 TANUKU 8 ITA 235/VIZ/2009 2005-06 AAKFA 9125C AMC POLAVARA M ITO WARD-1 ELURU 9 ITA 269/VIZ/2009 2006-07 AAALA 0675M AMC UNDI ITO WARD-2 BHIMAVARAM 10 ITA 270/VIZ/2009 2005-06 AAKFA 8420C AMC AKIVIDU ITO WARD-2 BHIMAVARAM 11 ITA 271/VIZ/2009 2006-07 AAKFA 8420C AMC AKIVIDU ITO WARD-2 BHIMAVARAM 12 ITA 291/VIZ/2009 2005-06 AAALA 0359C AMC KOVVUR ITO WARD-2 GUNTUR 13 ITA 292/VIZ/2009 2006-07 AAALA 0359C AMC KOVVUR ITO WARD-2 GUNTUR APPELLANT BY: SHRI G.V.N. HARI ADVOCATE RESPONDENT BY: SHRI D. MANOJ KUMAR ADDL. CIT DATE OF HEAR ING : 04.12.2013 DATE OF PRONOUNCEMENT : 11.12.2013 ORDER PER BENCH:- THESE APPEALS BY THE ASSESSEES AGAINST THE ORDERS OF THE CIT(A) RESPECTIVELY INVOLVE COMMON ISSUES. THEREFORE THESE ARE CONSID ERED TOGETHER AND DECIDED BY THIS COMMON ORDER. 2. WE HAVE HEARD THE LD. COUNSEL FOR THE ASSESSEE A ND LD. D.R. IN DETAIL. EVEN THOUGH VARIOUS ISSUES HAVE BEEN RAISED IN THE GROUN DS THE LD. COUNSEL HAS ARGUED THREE MAIN GROUNDS WHICH ARE 1. ON THE ISSUE OF EXE MPTION UNDER THE PROVISIONS OF SECTION 11 & 12 OF THE ACT 2. CORRESPONDING ALLOWA NCE OF EXPENDITURE AND 3. CLAIM OF DEPRECIATION. ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 2 3. THE FIRST ISSUE TO BE CONSIDERED IS WITH REFEREN CE TO NON-GRANTING OF BENEFIT U/S 11(2) FOR DELAY IN FILING FORM NO.10 AND ACCUMU LATION FOR SEVERAL OBJECTS. WHILE CONSIDERING THE ISSUE OF EXEMPTION OF ASSESSEES IN COME U/S 11 OF THE ACT THE ASSESSING OFFICER DID NOT AGREE ON THE CLAIM/ BENEF IT FOR ACCUMULATION OF INCOME AS THE RELEVANT FORM NO.10 WAS FILED BELATEDLY. THE L D. CIT(A) FOLLOWING THE PRINCIPLES LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. NAGPUR HOTEL OWNERS ASSOCIATION 247 ITR 20(SC) WHEREIN IT WAS HELD THA T THE NOTICE FOR ACCUMULATION OF INCOME COULD BE GIVEN ANY TIME BEFORE THE CONCLUSIO N OF THE ASSESSMENT PROCEEDINGS ALLOWED THE ASSESSEES CONTENTION WITH A DIRECTION TO ACCEPT THE FORM NO.10. HOWEVER THE LD. CIT(A) UPHELD THE ASSESSIN G OFFICERS CONTENTION THAT THE NOTICE FOR ACCUMULATION HAS NOT SPECIFIED ANY SPECI FIC PURPOSE AND THE GENERAL PURPOSE WHICH WAS MENTIONED IN FORM NO.10 CANNOT BE TERMED AS SPECIFIC AND CONCRETE PURPOSE AND AS SUCH THERE EXISTS INCURABLE INFIRMITY WITH REGARD TO THE PURPOSE FOR WHICH THE ACCUMULATION OF ITS INCOME HA S BEEN SOUGHT. THEREFORE DESPITE THE GRANT OF REGISTRATION U/S 12AA THE ASS ESSING OFFICER AND CIT HELD THAT ASSESSEE FAILED IN COMPLYING WITH THE PROVISIONS OF SECTION 11(2) OF THE ACT IN SO FAR AS FAILING TO INDICATE SPECIFIC PURPOSE FOR ACCUMUL ATION OF ITS INCOME. 4. IT WAS FAIRLY ADMITTED THAT THIS ISSUE WAS COVER ED BY THE DECISION OF THE COORDINATE BENCH IN SIMILAR GROUP OF CASES WHEREIN THE MATTER WAS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER BY OBSERVING AS UNDER : 6. THE FIRST DEFECT POINTED OUT BY THE ASSESSING OF FICER IS WITH REGARD TO THE PURPOSE OF ACCUMULATION OF FUNDS. IN THE FORM NO. 1 0 THESE ASSESSEES HAVE STATED THE PURPOSE OF ACCUMULATION AS UNDER:- FOR BETTERMENT OF MARKET COMMITTEE INCLUDING CO NSTRUCTION OF STRUCTURES SPILLOVER WORKS NEW WORKS TO CONTRIBU TE FUND TO ANY DEPARTMENT AS PER NEEDS' THE ASSESSING OFFICER CONSIDERED THE ABOVE SAID PUR POSE AS GENERAL IN NATURE AND BY TAKING SUPPORT FROM THE DECISION OF THE HON' BLE CALCUTTA HIGH COURT IN THE CASE OF TRUSTEES OF SINGHANIA CHARITABLE TRUST (SUPRA) HAS HELD THAT THESE ASSESSEES HAVE NOT STATED ANY SPECIFIC OR CONCRETE PURPOSE IN FORM NO. 10. HOWEVER IN THE CASE OF SINGHANIA CHARITABLE TRUST WE NOTICE THAT THE ASSESSEE THEREIN HAD LISTED ALL THE CHARITABLE OBJECTS FOR WHICH IT WAS CREATED AS THE PURPOSE OF ACCUMULATION. DEFINITELY THAT IS NOT THE CASE IN THE INSTANT APPEALS. IT IS A SETTLED POSITION OF LAW THAT THE P URPOSE OF ACCUMULATION SHOULD BE PRECISE AND SPECIFIC AND FURTHER THE PLURALITY OF PURPOSES IS ALSO NOT PROHIBITED. IN THIS VIEW OF THE MATTER THIS ISS UE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER AS HE HAS CONSIDERED THE 'PURPOSE OF ACCUMULATION' AS STATED BY THESE ASSESS EES AS GENERAL IN NATURE BY FOLLOWING THE CALCUTTA DECISION REFERRED (SUPRA) WITHOUT NOTING THAT THERE IS NO PARITY OF FACTS. ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 3 5. DURING THE PRESENT PROCEEDINGS IT WAS FURTHER S UBMITTED THAT THIS ISSUE IS ALSO CONSIDERED BY THE HONBLE DELHI HIGH COURT IN THE C ASE OF BHARAT KALYAN PRATISTHAN VS. DIT (EXEMPTION) 299 ITR 406 (DEL) WHEREIN IT W AS HELD AS UNDER: HELD : THE ASSESSEE HAS ONLY THREE OBJECTS AS FAR AS ITS T RUST DEED IS CONCERNED. THE TRUST DEED REQUIRES THE TRUST TO UTI LIZE ITS FUNDS FOR CHARITABLE PURPOSES WHICH ARE MEDICAL RELIEF E DUCATION AND RELIEF TO THE POOR. IN THE APPLICATION SEEKING EXEM PTION THE ASSESSEE HAS SPECIFIED THESE THREE OBJECTS. IT WAS NOT REQUIRED FOR THE ASSESSEE TO BE MORE SPECIFIC WITH REGARD TO THE UTILIZATION OF THE FUNDS. PLURALITY OF PURPOSES IS PERMITTED AND IF IT SO HAPPENS THAT AN ASSESSEE HAS ONLY THREE OBJEC TS OR PURPOSES IT MAY WELL UTILIZE THE FUNDS FOR ALL THE THREE OBJECTS AND PURPOSES.CIT VS. HOTEL & RESTAURANTS ASSOCIATI ON (2003) 182 CTR (DEL) 374 : (2003) 261 ITR 190 (DEL) AND DI RECTOR OF IT (EXEMPTION) VS. DAULAT RAM EDUCATION SOCIETY (20 05) 278 ITR 260 (DEL) FOLLOWED; CIT VS. M.CT. MUTHAIAH CHET TIAR FAMILY TRUST &. ORS. (2000) 162 CTR (MAD) 63 AND DIRECTOR OF IT (EXEMPTION) VS. TRUSTEES OF SINGHANIA CHARITABLE TR UST (1993) 199 ITR 819 (CAL) DISSENTED FROM. CONCLUSION : WHILE SPECIFYING THE PURPOSES OF ACCUMULATION OF IN COME UNDER S.11(2) A CHARITABLE TRUST CAN MENTION ALL ITS OBJ ECTS WITHOUT BEING SPECIFIC. 6. FURTHER HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. MARKET COMMITTEE 201 TAXMAN 235 ALSO CONSIDERED SIMILAR ISSUE AND HELD AS UNDER: WHERE IN THE APPLICATION FOR ACCUMULATION OF INCO ME THE ASSESSEE HAD STATED THAT ACCUMULATION OF THE FUNDS HAS BEEN MADE FOR DEVELOPMENT OF WORKS AND TRIBUNAL CLEARLY FOUND THAT THE PURPOSE STOOD SPECIFIED AND IT WAS STATUTORY PURPOS E FOR UTILIZING THE AMOUNT I.E. DEVELOPMENT AS PER S. 28 OF PUNJAB AGRICULTURE PRODUCE MARKETING ACT NO SUBSTANTIAL QUESTION OF L AW AROSE FROM THE ORDER OF THE TRIBUNAL ALLOWING EXEMPTION UNDER S.11(2). 7. THE HONBLE HIGH COURT VIDE PARA 2 OF ITS JUDGEM ENT DISCUSSED THE ISSUE IN DETAIL AS UNDER:- 2. THE ASSESSEE IS A STATUTORY BODY UNDER THE PROV ISIONS OF PUNJAB AGRICULTURE PRODUCE MARKETING ACT 1961 (HEREINAFTE R REFERRED TO AS THE 'PAPM ACT'). THE AO MADE ADDITION TO THE DECLARED I NCOME ON ACCOUNT OF ACCUMULATION OF FUNDS WITHOUT COMPLIANCE OF CONDITI ONS UNDER S. 11(2) OF ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 4 THE ACT. ON APPEAL THE SAID ADDITION WAS DELETED BY THE CIT(A) HOLDING THAT THE ACCUMULATION WAS AS PER THE STATUTORY PROVISIONS. THE SAID VIEW HAS BEEN UPHELD BY THE TRIBUNAL AS FOLLOWS : 'MERELY BECAUSE THE ASSESSEE HAS MENTIONED DEVELOPM ENT WORKS IN GENERAL MANNER IN FORM NO. 10 IT CANNOT BE SAID T HAT THE PRIMARY CONDITION OF S. 11(2) HAS NOT BEEN FULFILLED AS SO OBSERVED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF IT VS. MITSUI & CO. ENVIRONMENTAL TRUST (2007) 211 CTR (DEL) 352 : (200 8) 167 TAXMAN 43 (DEL). WE THEREFORE UPHOLD THE ORDER OF LEARNE D CIT (A) ON THIS ISSUE WHICH HAS BEEN DECIDED BY THE LEARNED CIT(A) BY SAYING THAT IN FORM NO. 10 THE ASSESSEE HAS MENTIONED THAT ACCUMULATION OF THE FUNDS HAS BEEN MADE FOR DEVELOPMENT OF WORKS AND THIS MENTIONING OF DEVELOPMENT OF WORKS IN FORM NO. 10 CANNOT BE SAID TO CASUAL BECAUSE THE ASSESSEE COULD NOT UTILIZE THE FUND OTHER THAN THE PURPOSES MENTIONED IN S. 28 OF PUNJAB AGRICULTURE PRODUCE MA RKETING ACT 1961. THE PURPOSES LISTED IN S. 28 OF PUNJAB AGRICULTURE PRODUCE MARKETING ACT 1961 ARE UNDOUBTEDLY IN THE NATURE OF DEVELOPM ENT WORKS. THEREFORE THE ORDER OF LEARNED CIT(A) IN DIRECTING THE AO TO ALLOW THE EXEMPTION IN RESPECT OF THE FUND ACCUMULATED FOR DEVELOPMENT WORKS IS JUSTIFIED.' WE HAVE HEARD LEARNED COUNSEL FOR APPELLANT. 3. THE CONDITION FOR EXCLUDING ACCUMULATED INCOME O F A CHARITABLE INSTITUTION FROM TOTAL INCOME IS SPECIFICATION OF THE PURPOSE FOR WHICH THE INCOME WAS ACCUMULATED AND DEPOSIT IN THE SPECI FIED MODE. EXEMPTION WAS DISALLOWED ON THE GROUND THAT THE ASS ESSEE FAILED TO SPECIFY THE PURPOSE OF ACCUMULATION. THE CIT(A) AS WELL AS THE TRIBUNAL HAVE CLEARLY HELD THAT THE PURPOSE STOOD SPECIFIED AND WAS STATUTORY PURPOSE FOR UTILIZING THE AMOUNT I.E. DEVELOPMENT A S PER S. 28 OF PAPM ACT. SEC. 11(2) OF THE ACT TO THE EXTENT RELEVANT IS AS UNDER : '11(2) WHERE EIGHTY FIVE PER CENT OF THE INCOME REF ERRED TO IN CL. (A) OR CL. (B) OF SUB-S. (1) READ WITH THE EXPLANATION TO THAT SUB-SECTION IS NOT APPLIED OR IS NOT DEEMED TO HAVE BEEN APPLIED TO CHARITABLE OR RELIGIOUS PURPOSES IN INDIA DURING THE PREVIOUS YEA R BUT IS ACCUMULATED OR SET APART EITHER IN WHOLE OR IN PART FOR APPLICATION TO SUCH PURPOSES IN INDIA SUCH INCOME SO ACCUMULATED OR SET APART SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE PREVIOUS YEAR OF THE PER SON IN RECEIPT OF THE INCOME PROVIDED THE FOLLOWING CONDITIONS ARE COMPL IED WITH NAMELY : (A) SUCH PERSON SPECIFIES BY NOTICE IN WRITING GIV EN TO THE AO IN THE PRESCRIBED MANNER THE PURPOSE FOR WHICH THE INCOME IS BEING ACCUMULATED OR SET APART AND THE PERIOD FOR WHICH T HE INCOME IS TO BE ACCUMULATED OR SET APART WHICH SHALL IN NO CASE EX CEED TEN YEARS; (B) ** ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 5 8. RESPECTFULLY FOLLOWING PRINCIPLES LAID DOWN BY THE ABOVE WE DIRECT THE ASSESSING OFFICER TO CONSIDER THE CLAIM OF SECTION 11(2) AFRESH IN THE LIGHT OF THE JUDGEMENTS ON THE ISSUE. THEREFORE THE ISSUE OF A CCUMULATION OF INCOME AS PER PROVISIONS OF SECTION 11(2) IS RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE AND ALLOW THE CLAIM AFTER AFFO RDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. THE SECOND ISSUE FOR CONSIDERATION IS WITH REFER ENCE TO GRANT OF RELIEF OF VARIOUS PAYMENTS MADE CONSEQUENT TO THE DIRECTIONS OF DIRECTOR OF MARKETING WHICH ASSESSING OFFICER DID NOT ALLOW AND THE LD. CIT(A) SUSTAINED THE ADDITION ON THE REASON THAT THE DIRECTIONS OF THE DIRECTOR OF MARKE TING WERE NOT FILED. IT WAS THE SUBMISSION OF THE ASSESSEE THAT AT THE RELEVANT POI NT OF TIME THE DIRECTIONS COULD NOT BE LOCATED BUT THEY ARE FILED AS ADDITIONAL EVIDENC E BEFORE US. HOWEVER ALLOWANCE OF THE EXPENDITURE CONSEQUENT TO THE DIRECTIONS OF DIRECTOR OF MARKETING HAS ALREADY BEEN DECIDED IN A WAY BY HONBLE JURISDICTIONAL HIG H COURT IN THE CASE OF CIT VS. AGRICULTURAL MARKET COMMITTEE GIDDALORE AND ORS. 3 36 ITR 641. THERE WHILE EXAMINING THE ISSUE OF GRANTING OF REGISTRATION TO THE AGRICULTURAL MARKET COMMITTEE AS SUCH THE HONBLE JURISDICTIONAL HIGH COURT EXAM INED THE PROVISIONS OF SECTION 15 OF ANDHRA PRADESH (AGRICULTURAL PRODUCE AND LIVESTO CK) MARKETS ACT 1966 UNDER WHICH THE AGRICULTURAL MARKET COMMITTEES WERE CONST ITUTED. VIDE PARA 12 OF THE JUDGEMENT THE ISSUE WAS CONSIDERED ELABORATELY AS UNDER: 17. THE DECISION OF THE SUPREME COURT IN SREENIVASA GEN ERAL TRADERS VS. STATE OF A.P. AIR 1983 SC 1246 : (1983 ) 4 SCC 353 CONTAINS AN OVERVIEW OF THE AMC ACT IN PARAS 11 TO 15. INSTE AD OF THIS COURT AGAIN GIVING AN OVERVIEW OF THE ANDHRA PRADESH AMC ACT I T IS USEFUL TO EXTRACT THESE PARAS HEREUNDER : '11. THE OBJECT AND PURPOSE OF THE ANDHRA PRADESH ( AGRICULTURAL PRODUCE AND LIVESTOCK) MARKETS ACT 1966 AS REFLECTED IN TH E LONG TITLE IS TO CONSOLIDATE AND AMEND THE LAW RELATING TO THE REGUL ATION OF PURCHASE AND SALE OF AGRICULTURAL PRODUCE LIVESTOCK AND PRODUCT S OF LIVESTOCK AND THE ESTABLISHMENT OF MARKETS IN CONNECTION THEREWITH. T HE LEGISLATION IS DESIGNED TO ELIMINATE MIDDLEMEN IN NOTIFIED AGRICULTURAL PRO DUCE LIVESTOCK AND PRODUCTS OF LIVESTOCK TO PROTECT THE PRODUCERS OF SUCH AGRICULTURAL PRODUCE LIVESTOCK AND PRODUCTS OF LIVESTOCK FROM E XPLOITATION AND TO ENSURE TO THEM A FAIR PRICE FOR THEIR PRODUCE. THE MATERIAL PROVISIONS OF THE ACT MAY BE REFERRED TO. SEC. 2 IS THE DEFINITION CL AUSE AND DEFINES THE EXPRESSION 'AGRICULTURAL PRODUCE' IN CL. (I) TO MEA N ANYTHING PRODUCED FROM LAND IN THE COURSE OF AGRICULTURE OR HORTICULTURE A ND INCLUDES FOREST PRODUCE OR ANY PRODUCE OF LIKE NATURE EITHER PROCESSED OR U NPROCESSED AND ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 6 DECLARED BY THE GOVERNMENT BY NOTIFICATION TO BE AG RICULTURAL PRODUCE FOR THE PURPOSES OF THIS ACT. THE TERM 'MARKET' AS DEFI NED IN S. 2(VI) MEANS A MARKET ESTABLISHED UNDER SUB-S. (3) OF S. 4 AND INC LUDES MARKET YARD AND ANY BUILDING THEREIN. THE EXPRESSION 'NOTIFIED AREA' AS DEFINED IN S. 2(XI) MEANS ANY AREA NOTIFIED S. 3 AND 'NOTIFIED MARKET AREA' IN CL. (XII) MEANS ANY AREA DECLARED TO BE A MARKET AREA BY NOTIFICATION UNDER S. 4. UNDER S. 3 OF THE ACT THE STATE GOVERNMENT IS EMPOWERED TO DECLA RE THEIR INTENTION OF REGULATING THE PURCHASE AND SALE OF SUCH AGRICULTUR AL PRODUCE LIVESTOCK OR PRODUCTS OF LIVESTOCK IN SUCH AREA AS MAY BE SPECIF IED IN SUCH NOTIFICATIONS. AFTER CONSIDERING THE OBJECTIONS AND SUGGESTIONS IF ANY THE STATE GOVERNMENT IS AUTHORISED TO PUBLISH A FINAL NOTIFIC ATION UNDER SUB-S. (3) THEREOF DECLARING SUCH AREA TO BE A NOTIFIED AREA. BY SUB-S. (1) OF S. 4 THE STATE GOVERNMENT IS EMPOWERED TO CONSTITUTE A MARKET COMM ITTEE FOR EVERY NOTIFIED AREA WHICH SHALL BE A BODY CORPORATE HAVING PERPETUAL SUCCESSION AND A COMMON SEAL. THE DUTY OF ENFORCING THE PROVISIONS OF THE ACT AND THE RULES AND BYE-LAWS IS ENTRUSTED TO A MA RKET COMMITTEE UNDER SUB-S. (2) THEREOF. SUB-S. (3) OF S. 4 EMPOWERS THE MARKET COMMITTEE TO ESTABLISH SUCH NUMBER OF MARKETS AS THE STATE GOVER NMENT MAY FROM TIME-TO-TIME DIRECT FOR THE PURCHASE AND SALE OF A NY NOTIFIED AGRICULTURAL PRODUCE LIVESTOCK OR PRODUCTS OF LIVESTOCK. SUB-S. (3) OF S. 4 PROVIDES SUCH FACILITIES IN THE MARKET AS MAY BE SPECIFIED BY THE GOVERNMENT FROM TIME TO TIME BY A GENERAL OR SPECIAL ORDER. SUB-S. (4) PROVIDES THAT THE STATE GOVERNMENT SHALL AFTER THE ESTABLISHMENT OF A MARKET UNDER SUB-S. (3) DECLARE BY NOTIFICATION THE MARKET AREA AND SUCH OT HER AREA ADJOINING THERETO AS MAY BE SPECIFIED IN THE NOTIFICATION TO BE A NOTIFIED MARKET AREA FOR THE PURPOSES OF THE ACT. . . . . . . 12. UNDER THE SCHEME OF THE ACT THE MARKET COMMITT EE IS ENJOINED BY SUB-S. (1) OF S. 14 TO PAY INTO A FUND CALLED THE 'MARKET COMMITTEE FUND' ALL MONEYS RECEIVED FROM THE TRADERS AS MARKET FEE ON TRANSACTIONS OF SALE OR PURCHASE OF AGRICULTURAL PRODUCE TAKING PLACE WITHI N THE NOTIFIED MARKET AREA AND THEY ARE TO BE CREDITED IN THE NEAREST GOV ERNMENT TREASURY OR IN A BANK WITH THE PREVIOUS SANCTION OF THE STATE GOVERNMENT. ALL EXPE NDITURE INCURRED BY THE MARKET COMMITTEE UNDER AND FOR PURPOSES OF THE ACT HAVE TO BE DEFRAYED OUT OF THE SAID FUND AND ANY SURPLUS REMAINING AFTER SUCH EXPENDITURE HAS TO BE INVESTED IN SUCH MANNER AS M AY BE PRESCRIBED. UNDER SUB-S. (2) EVERY MARKET COMMITTEE HAS TO PAY TO TH E STATE GOVERNMENT OUT OF ITS FUND THE COST OF ANY SPECIAL OR ADDITIONAL STAFF EMPLOYED BY THE GOVERNMENT WITH THEIR CONSULTATION. WHERE SUCH ADDITIONAL STAFF IS EMPLOYED FOR THE PURPOSES OF ON E OR MORE MARKET COMMITTEES THE STATE GOVERNMENT HAS TO APPORTION THE COST OF SUCH SPECIAL OR ADDITIONAL STAFF AMONG THE MARKET COMMITTEES CONCERNED IN SUCH MANNER AS THEY THINK FIT. UNDER SUB-S. (3) TH E MARKET COMMITTEE MAY GRANT LOANS TO ANOTHER MARKET COMMITTEE OUT OF ITS SURPLUS FUNDS WITH THE PREVIOUS SANCTION OF THE STATE GOVERNMENT AT SUCH RATES OF INTEREST AS MAY BE PRESCRIBED. THE PURPOSES FOR WHI CH THE MARKET COMMITTEE FUND MAY BE EXPENDED ARE SET OUT IN S. 15 WHICH READS : - (I) THE ACQUISITION OF SITE FOR THE MARKET; (II) THE ESTABLISHMENT MAINTENANCE AND IMPROVEMENT OF THE MARKET; ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 7 (III) THE CONSTRUCTION AND MAINTENANCE OF BUILDINGS NECESSARY FOR THE MARKET AND FOR THE HEALTH CONVENIENCE AND SAFETY OF THE PERSONS USING THE MARKET AND MAINTENANCE OF BUILDINGS UNDER THE CONTROL OF THE MARKET COMMITTEE; (IV) THE PROVISION AND MAINTENANCE OF STANDARD WEIG HTS AND MEASURES; (V) THE PAY PENSIONS LEAVE ALLOWANCE GRATUITIES COMPASSIONATE ALLOWANCES AND CONTRIBUTION TOWARDS LEAVE ALLOWANCES PENSIONS OR PROVIDENT FUND OF OFFICERS AND SERVANTS EMPLOYED BY THE MARKET COMMITTEE; (VI) THE PAYMENT OF INTEREST ON LOANS THAT MAY BE R AISED FOR PURPOSES OF THE MARKET AND THE PROVISIONS OF A SINKING FUND IN RESPECT OF SUCH LOANS; (VII) THE COLLECTION AND DISSEMINATION OF INFORMATI ON REGARDING ALL MATTERS RELATING TO CROP STATISTICS AND MARKETING IN RESPECT OF NOTIFIED AGRICULTURAL PRODUCE LIVESTOCK AND PRODUCTS OF LIV ESTOCK; (VIII) SCHEMES FOR THE EXTENSION OR CULTURAL IMPROV EMENT OF NOTIFIED AGRICULTURAL PRODUCE LIVESTOCK AND PRODUCTS OF LIV ESTOCK WITHIN THE NOTIFIED AREA INCLUDING THE GRANT SUBJECT TO THE APPROVAL OF THE GOVERNMENT OF FINANCIAL AID TO THE SCHEMES FOR SUC H EXTENSION OR IMPROVEMENT WITHIN SUCH AREA UNDERTAKEN BY OTHER BODIES OR INDIVIDUALS; (IX) PROPAGANDA FOR THE IMPROVEMENT OF AGRICULTURE LIVESTOCK AND PRODUCTS OF LIVESTOCK AND THRIFT; (X) THE EXPENSES OF AND INCIDENTAL TO THE CONDUCT OF ELECTIONS; (XI) THE PROMOTION OF GRADING SERVICES; (XII) MEASURES FOR THE PRESERVATION OF FOOD GRAINS; (XIII) SUCH OTHER PURPOSES AS MAY BE SPECIFIED BY T HE GOVERNMENT BY GENERAL OR SPECIAL ORDER; 13. SUB-S. (1) OF S. 16 OF THE ACT PROVIDES THAT TH ERE SHALL BE FORMED FOR THE WHOLE OF THE STATE A FUND TO BE CALLED THE 'CEN TRAL MARKET FUND'. EVERY MARKET COMMITTEE IS REQUIRED TO CONTRIBUTE 10 PER CENT OF ITS ANNUAL INCOME TO THE CENTRAL MARKET FUND AND THE CONTRIBUT ION SO PAID SHALL BE PLACED TO THE CREDIT OF THE SAID FUND. SUB-S. (2) O F S. 16 PROVIDES THAT THE CENTRAL MARKET FUND SHALL BE VESTED IN THE STATE GO VERNMENT AND DEPOSITED IN THE GOVERNMENT TREASURY AT HYDERABAD. IT IS ADMINISTERED AND APPLIED BY THE DIRECTOR OF MARKETING FOR ALL OR ANY OF THE PURPOSES SET OUT THEREIN VIZ. ; 1(I) GRANT-IN-AID OF THE MARKET COMMITTEES FOR THE FIRST YEAR AFTER THEIR CONSTITUTION UNDER THIS ACT; (II) GRANT-IN-AID OF A DEFICIT MARKET COMMITTEE FOR A PERIOD NOT EXCEEDING THREE YEARS; ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 8 (III) GRANT OF LOANS TO THE MARKET COMMITTEES AT SU CH RATES OF INTEREST AS ARE CHARGED ON LOANS GRANTED BY THE GOVERNMENT FOR DEVELOPMENT PURPOSES; AND (IV) SUCH OTHER SIMILAR OR ALLIED PURPOSES AS MAY B E SPECIFIED BY THE GOVERNMENT BY GENERAL OR SPECIAL ORDER.' 14. IN EXERCISE OF THE POWERS CONFERRED BY S. 33 OF THE ACT THE STATE GOVERNMENT OF ANDHRA PRADESH HAVE FRAMED THE ANDHRA PRADESH (AGRICULTURAL PRODUCE AND LIVESTOCK) MARKETS RULES 1969. CHAPTER IV OF THE RULES DEALS WITH THE POWERS AND FUNCTIONS OF THE MA RKET COMMITTEES AND CHAPTER V DEALS WITH THE REGULATION OF TRADING. CHA PTER VI RELATES TO THE LEVY AND COLLECTION OF MARKET FEE CHAPTER VII REGU LATES THE MANNER IN WHICH THE MARKET COMMITTEE FUND SHALL BE MAINTAINED AND CHAPTER VIII THE MANNER IN WHICH THE MARKET COMMITTEES SHALL FUN CTION. THE ACT AND THE RULES PROVIDE FOR A COMPLETE SCHEME FOR THE EST ABLISHMENT AND REGULATION OF MARKETS FOR THE PURCHASE AND SALE OF NOTIFIED AGRICULTURAL PRODUCE LIVESTOCK AND PRODUCTS OF LIVESTOCK IN THE STATE OF ANDHRA PRADESH. WE ARE HERE CONCERNED WITH CHAPTER V 15. MARKETING LEGISLATION WHICH SEEKS TO ENABLE PRO DUCERS TO GET A FAIR PRICE FOR THE COMMODITIES BY ELIMINATING MIDDLEMEN AND PROVIDING A REGULATED MARKET CANNOT BE SAID TO IMPOSE 'UNREASONABLE REST RICTION' ON THE CITIZENS RIGHT TO DO BUSINESS UNLESS IT IS CLEARLY ESTABLISH ED THAT THE PROVISIONS ARE TOO DRASTIC TO ACHIEVE THE OBJECT FOR WHICH IT WAS ENACTED. IN ORDER TO MAKE EFFECTIVE SUCH LEGISLATION FOR THE CONTROL OF A MARKET IT WOULD B E REASONABLE FOR THE LEGISLATURE TO CONTROL TRANSACTIONS BETWEEN TRADERS AND ALSO THE SALE OF PRODUCE GROWN OUTSIDE THE MARKET A REA IF SOLD IN THE MARKET AREA... ......' 18. SEC. 7 OF THE AMC ACT REQUIRES EVERY PERSON TO OBTA IN A LICENCE FROM THE MARKET COMMITTEE TO SET UP ESTABLISH AND USE ANY PLACE IN THE NOTIFIED AREA FOR THE PURCHASE SALE STORAGE OR WEIGHMENT PROCESSING OR PRESSING OF ANY NOTIFIED AGRICULTURAL PRODUCE. SEC. 12 EMPOWERS THE MARKET COMMITTEE TO LEVY FEES ON AGRICULTURAL PRODUCE PUR CHASE OR SALE IN THE NOTIFIED MARKET AREA. THESE MONIES FORM THE MARKET COMMITTEE FUND AND SHALL HAVE TO BE SPENT IN ACCORDANCE WITH THE PROVISIONS OF S. 14 AND THE ANDHRA PRADESH (AGRICULTURAL PRODUCE AND LIVESTOCK) MARKETS RULES 1969 (THE RULES FOR BREVITY). 19. IT MAY THEREFORE BE TAKEN AS WELL ACCEPTED THAT T HE AMCS DISCHARGE AN IMPORTANT DUTY AND FUNCTION OF PROTECTING THE INTEREST OF A LARGE BODY OF PERSONS NAMELY AGRICULTURISTS FARMERS AND GROWERS OF AGRICULTURAL PRODUCE AND LIVESTOCK. A MARKET COMMITTEE IS A PLAT FORM TO FACILITATE EQUAL BARGAINING POWER FOR THE SALE OR PURCHASE OF AGRICU LTURAL PRODUCE WITH THE MAIN OBJECT OF ENSURING FAIR AND REASONABL E PRICE FOR THE AGRICULTURAL PRODUCE AND LIVESTOCK BROUGHT BY THE A GRICULTURISTS AND FARMERS TO THE MARKET AREA/YARD. 20. THE MARKET COMMITTEE CONSTITUTED UNDER S. 4 OF THE AMC ACT SHALL BE A BODY CORPORATE HAVING PERPETUAL SUCCESSION AND A COMMON SEAL WITH POWER TO ACQUIRE HOLD AND DISPOSE OF THE PROP ERTY AND MAY BY ITS ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 9 CORPORATE NAME SUE AND BE SUED. IT IS REQUIRED TO E STABLISH AS MANY NUMBER OF MARKETS AS THE GOVERNMENT MAY DIRECT FOR THE PURCHASE AND SALE OF NOTIFIED AGRICULTURAL PRODUCE AND SHALL PROVIDE SUCH FACILITIES AS MAY BE PRESCRIBED BY THE GOVERNMENT [S. 4(3)(A) OF THE AMC ACT]. THERE IS NO DISPUTE THAT ALL THE AMCS PROVIDE PLATFORMS GODOWNS NECESSARY INFRASTRUCTURAL FACILITIES LIKE ROADS REST HOUSES WATER FACILITIES IN THE MARKET AREAS AND CATER TO THE NEEDS OF THE SELLERS AND BUYERS OF THE AGRICULTURAL PRODUCE IN THE NOTIFIED MARKET AREA. C AN IT THEN BE SAID THAT THE AMC IS CONSTITUTED FOR A CHARITABLE PURPOSE I.E . FOR THE ADVANCEMENT OF OBJECT OF GENERAL PUBLIC UTILITY? 10. THE HONBLE HIGH COURT WENT ON TO DISCUSS THE I SSUE ELABORATELY. SUFFICE TO SAY IT WAS ADMITTED THAT GOVT HAS POWER TO GIVE DIRECTI ONS AND SUCH PAYMENT AS PER PROVISIONS OF GOVERNING ACT HAS TO BE CONSIDERED F OR THE OBJECTS ONLY. THEREFORE THE ISSUE IS NO LONGER RES INTEGRA AS THE STATE GOVERNM ENT HAS POWER TO GRANT/SANCTION AMOUNTS FOR ANY OTHER PURPOSE BY A GENERAL OR SPECI FIC ORDER. THESE FUNDS ARE TO BE UTILIZED FOR THE PURPOSE OF OBJECTS ONLY. ACCORDIN GLY THE AMOUNTS INVOLVED AND PAID AS PER THE ORDERS OF THE DIRECTOR MARKETING ARE TO BE ALLOWED AS EXPENDITURE/APPLICATION FOR THE PURPOSE OF OBJECTS OF THE ASSESSEE. IN VIEW OF THIS THE A.O. IS DIRECTED TO ALLOW SUCH CLAIMS SUBJECT TO VERIFICATION OF THE DIRECTIONS OF THE DIRECTOR MARKETING ISSUED IN THIS REGARD. THE REFORE FOR THE PURPOSE OF VERIFICATION THE ISSUE ON THIS IS SET ASIDE TO THE A.O. WITH A DIRECTION TO EXAMINE THE ISSUE AS DIRECTED AFTER GIVING DUE TO OPPORTUNITY T O ASSESSEE. 11. THE THIRD ISSUE AGITATED IS WITH REFERENCE TO T HE CLAIM OF DEPRECIATION NOT ALLOWED FOR WANT FOR DETAILS. THERE IS NO DISPUTE WITH REFERENCE TO THE ISSUE THAT ASSESSEE IS ELIGIBLE FOR DEPRECIATION. VARIOUS JUD ICIAL AUTHORITIES HAVE CONSIDERED THE ISSUE OF CLAIM OF DEPRECIATION ON CAPITAL ASSETS FR OM THE INCOME OF CHARITABLE TRUST FOR DETERMINING THE QUANTUM OF FUNDS WHICH HAVE TO BE A PPLIED FOR THE PURPOSE OF TRUST IN TERMS OF SECTION 11 OF THE ACT. THE HONBLE HIG H COURT OF PUNJAB & HARYANA IN THE CASE OF CIT VS. MARKET COMMITTEE PIPLI HAS CONSIDE RED THE ISSUE RECENTLY AND IN THEIR JUDGEMENT REPORTED IN 330 ITR 16 HELD AS UNDER:- DEPRECIATIONALLOWABILITYCHARITABLE TRUST DEPRECIATION IS ALLOWABLE ON CAPITAL ASSETS FROM TH E INCOME OF CHARITABLE TRUST FOR DETERMINING THE QUAN TUM OF FUNDS WHICH HAVE TO BE APPLIED FOR THE PURPOSES O F THE TRUST IN TERMS OF S. 11IT CANNOT BE SAID THAT DOUBL E BENEFIT IS GIVEN IN ALLOWING DEPRECIATION FOR COMPU TING INCOME FOR PURPOSES OF S. 11 CIT VS. SHETH MANILAL RANCHHODDAS VISHRARN BHAVAN TRUST (1992) 105 CTR (GUJ) 303 : (1992) 198 ITR 598 (GUJ) CIT VS. I NSTITUTE OF ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 10 BANKING PERSONNEL SELECTION (2003) 185 CTR (BOM) 49 2 : (2003) 131 TAXMAN 386 (BOM) CIT VS. RAO BAHADUR CALAVALA CUNNAN CHETTY CHARITIES (1982) 135 ITR 485 (MAD) CIT VS. SOCIETY OF THE SISTERS OF ST. ANNE (1984) 39 CTR (KAR) 9 : (1984) 146 ITR 28 (KAR) AND CIT VS. RAIPUR PALLOTTINE SOCIETY (1989) 80 CTR (MP) 127 : (1989) 180 ITR 579 (MP) CONCURRED WITH; ESCORTS LTD. VS. UNION OF INDIA (1992) 108 CTR (SC) 275 : (1993) 199 ITR 43 (SC) DISTINGUISHED CONCLUSION: DEPRECIATION IS ALLOWABLE ON CAPITAL ASSETS FROM TH E INCOME OF CHARITABLE TRUST FOR DETERMINING THE QUANTUM OF FUNDS WHICH HA VE TO BE APPLIED FOR THE PURPOSES OF THE TRUST IN TERMS OF S. 11. 12. SINCE THE ISSUE IS DECIDED IN FAVOUR OF THE ASS ESSEE THE CLAIM PER SE IS ALLOWABLE TO THE ASSESSEE. THE ASSESSING OFFICER I S DIRECTED TO ALLOW THE DEPRECIATION AFTER OBTAINING THE NECESSARY DETAILS FROM THE ASSESSEE. THIS ISSUE IS ALSO ACCORDINGLY CONSIDERED ALLOWED. 13. IN SOME OF THE APPEALS CONSIDERED HEREUNDER TH E ASSESSING OFFICER HAS NOT GRANTED EXEMPTION U/S 11(2) OF THE ACT ALLEGIN G THAT ASSESSEE VIOLATED SECTION 13 OF THE ACT. HOWEVER THE LD. CIT(A) DID NOT CONSIDER SECTION 13 VIOLATION BUT HE DID NOT ACCORD THE EXEMPTION ON AC COUNT OF PLURALITY OF OBJECTS MENTIONED IN FORM NO.10. THIS ISSUE OF PLURALITY O F OBJECTS WAS ALREADY CONSIDERED IN FIRST ISSUE DISCUSSED ABOVE AND ACCOR DINGLY IN THESE CASES ALSO THE ISSUE IS RESTORED TO THE FILE OF THE A.O. FOR A FRE SH EXAMINATION. 14. AFTER THE ABOVE GENERAL DISCUSSION ON THE VARIO US ISSUES WE CONSIDER THE SEPARATE GROUNDS RAISED BY THE ASSESSEE IN RESPECTI VE APPEALS AS UNDER: 15. ITA NO.226 OF 2009 : 15.1 GROUND NO.1: THIS GROUND IS GENERAL IN NATURE. 15.2 GROUND NOS.2 3 & 4: THESE GROUNDS ARE WITH REFERENCE TO THE CLAIM OF LOCAL AUTHORITY AND EXEMPTION U/S 10(26AAB) ON THE REASON THAT THE AMENDED PROVISION IS RETROSPECTIVE AND RETROACTIVE IN ITS OPERATION. THIS ISSUE IS ALREADY CONSIDERED AGAINST THE ASSESSEE BY THE HON BLE HIGH COURT OF ANDHRA PRADESH IN THE BATCH OF APPEALS IN VARIOUS AMCS WH ICH WAS REFERRED TO IN ITA NOS.421 523 TO 529 OF 2010 AND ITA NOS.2 3 4 6 7 11 20 22 32 36 37 38 ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 11 39 40 41 42 AND 43 OF 2011 IN THE CASE OF AGRICU LTURAL MARKET COMMITTEE TANUKU AND OTHERS DATED 30.03.2011. HENCE THESE G ROUNDS ARE DISMISSED. 15.3 GROUND NOS.5 6 & 7 : THESE GROUNDS ARE ON TH E ISSUE OF EXEMPTION U/S 11. FOR THE REASONS STATED IN PARA-8 ON FIRST ISSUE DISCUSSED ABOVE THE CLAIMS ARE RESTORED TO THE FILE OF THE A.O. FOR FRESH CONS IDERATION. 15.4 GROUND NO.8: THE GROUND IS ON ALLOWANCE OF VARIOUS EXPENDITURES PAID ON THE DIRECTIONS OF DIRECTOR MARKETING NOT ALLOWE D. ISSUE WAS DISCUSSED IN PARAS 9 & 10 ABOVE. FOR THE REASONS STATED ABOVE T HE MATTER IS RESTORED TO AO. GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 15.5 GROUND NO.9: THE GROUND IS FOR CONSIDERATION ALTERNATELY UNDER SECTION 36(1)(XIII). SINCE WE ARE CONSIDERING THE ISSUE U/ S 11 OF THE ACT PROVISIONS OF SECTION 36(1)(XIII) OF BUSINESS COMPUTATION DO NOT APPLY. GROUND REJECTED 15.6 GROUND NO.10: THIS GROUND IS ON ALLOWANCE OF DEPRECIATION. FOR THE REASONS DISCUSSED IN PARAS 11 & 12 ABOVE WE ALLOW THE GROUND FOR STATISTICAL PURPOSES. 15.7 GROUND NO.11: THIS GROUND IS ON REOPENING THE ASSESSMENT U/S 148. THIS GROUND IS NOT PRESSED AND ACCORDINGLY TREATED AS W ITHDRAWN. 15.8 AO IS DIRECTED TO CONSIDER THE ISSUES ACCOR DINGLY. 15.9 APPEAL BY ASSESSEE IS PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. 16. ITA NOS.228 & 229 OF 2009: 16.1 GROUND NO.1: THIS GROUND IS GENERAL IN NATURE . 16.2 GROUND NOS.2 3 & 4: THESE GROUNDS ARE WITH REFERENCE TO THE CLAIM OF LOCAL AUTHORITY AND EXEMPTION U/S 10(26AAB) ON THE REASON THAT THE AMENDED PROVISION IS RETROSPECTIVE AND RETROACTIVE IN ITS OPERATION. THIS ISSUE IS ALREADY CONSIDERED AGAINST THE ASSESSEE BY THE HON BLE HIGH COURT OF ANDHRA PRADESH IN THE BATCH OF APPEALS IN VARIOUS AMCS WH ICH WAS REFERRED TO IN ITA NOS.421 523 TO 529 OF 2010 AND ITA NOS.2 3 4 6 7 11 20 22 32 36 37 38 39 40 41 42 AND 43 OF 2011 IN THE CASE OF AGRICU LTURAL MARKET COMMITTEE TANUKU AND OTHERS DATED 30.03.2011. HENCE THESE GROUNDS ARE DISMISSED. 16.3 GROUND NOS.5 6 & 7 : THESE GROUNDS ARE ON TH E ISSUE OF EXEMPTION U/S 11. FOR THE REASONS STATED IN PARA-8 ON FIRST ISSUE DISCUSSED ABOVE THE CLAIMS ARE RESTORED TO THE FILE OF THE A.O. FOR FRESH CONS IDERATION. 16.4 GROUND NO.8: THE GROUND IS ON ALLOWANCE OF VARIOUS EXPENDITURES PAID ON THE DIRECTIONS OF DIRECTOR MARKETING NOT ALLOWE D. ISSUE WAS DISCUSSED IN ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 12 PARAS 9 & 10 ABOVE. FOR THE REASONS STATED ABOVE T HE MATTER IS RESTORED TO AO. GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 16.5 GROUND NO.9: THE GROUND IS FOR CONSIDERATION ALTERNATELY UNDER SECTION 36(1)(XIII). SINCE WE ARE CONSIDERING THE ISSUE U/ S 11 OF THE ACT PROVISIONS OF SECTION 36(1)(XIII) OF BUSINESS COMPUTATION DO NOT APPLY. GROUND REJECTED. 16.6 GROUND NO.10: THIS GROUND IS ON ALLOWANCE OF DEPRECIATION. FOR THE REASONS DISCUSSED IN PARAS 11 & 12 ABOVE WE ALLOW THE GROUND FOR STATISTICAL PURPOSES. 16.7 GROUND NO.11: THIS GROUND IS ON REOPENING THE ASSESSMENT U/S 148. THIS GROUND IS NOT PRESSED AND ACCORDINGLY TREATED AS W ITHDRAWN. 16.8 AO IS DIRECTED TO CONSIDER THE ISSUES ACCOR DINGLY. 16.9 APPEALS BY ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 17. ITA NO.230/VIZAG/2009: 17.1 GROUND NO.1: THIS GROUND IS GENERAL IN NATURE . 17.2 GROUND NOS.2 3 & 4: THESE GROUNDS ARE WITH REFERENCE TO THE CLAIM OF LOCAL AUTHORITY AND EXEMPTION U/S 10(26AAB) ON THE REASON THAT THE AMENDED PROVISION IS RETROSPECTIVE AND RETROACTIVE IN ITS OPERATION. THIS ISSUE IS ALREADY CONSIDERED AGAINST THE ASSESSEE BY THE HON BLE HIGH COURT OF ANDHRA PRADESH IN THE BATCH OF APPEALS IN VARIOUS AMCS WH ICH WAS REFERRED TO IN ITA NOS.421 523 TO 529 OF 2010 AND ITA NOS.2 3 4 6 7 11 20 22 32 36 37 38 39 40 41 42 AND 43 OF 2011 IN THE CASE OF AGRICU LTURAL MARKET COMMITTEE TANUKU AND OTHERS DATED 30.03.2011. HENCE THESE G ROUNDS ARE DISMISSED. 17.3 GROUND NOS.5 6 & 7 : THESE GROUNDS ARE ON TH E ISSUE OF EXEMPTION U/S 11. FOR THE REASONS STATED IN PARA-8 ON FIRST ISSUE DISCUSSED ABOVE THE CLAIMS ARE RESTORED TO THE FILE OF THE A.O. FOR FRESH CONS IDERATION. 17.4 GROUND NO.8: THE GROUND IS ON ALLOWANCE OF VARIOUS EXPENDITURES PAID ON THE DIRECTIONS OF DIRECTOR MARKETING NOT ALLOWE D. ISSUE WAS DISCUSSED IN PARAS 9 & 10 ABOVE. FOR THE REASONS STATED ABOVE T HE MATTER IS RESTORED TO AO. GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 17.5 GROUND NO.9: THE GROUND IS FOR CONSIDERATION ALTERNATELY UNDER SECTION 36(1)(XIII). SINCE WE ARE CONSIDERING THE ISSUE U/ S 11 OF THE ACT PROVISIONS OF SECTION 36(1)(XIII) OF BUSINESS COMPUTATION DO NOT APPLY. GROUND REJECTED. ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 13 17.6 GROUND NO.10: THIS GROUND IS ON ALLOWANCE OF DEPRECIATION. FOR THE REASONS DISCUSSED IN PARAS 11 & 12 ABOVE WE ALLOW THE GROUND FOR STATISTICAL PURPOSES. 17.7 GROUND NO.11: THIS GROUND IS ON REOPENING THE ASSESSMENT U/S 148. THIS GROUND IS NOT PRESSED AND ACCORDINGLY TREATED AS W ITHDRAWN. 17.8 AO IS DIRECTED TO CONSIDER THE ISSUES ACCOR DINGLY. 17.9 APPEAL BY ASSESSEE IS PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. 18. ITA NOS.231 & 232/VIZAG/2009: 18.1 GROUND NO.1: THIS GROUND IS GENERAL IN NATURE . 18.2 GROUND NOS.2 3 & 4: THESE GROUNDS ARE WITH REFERENCE TO THE CLAIM OF LOCAL AUTHORITY AND EXEMPTION U/S 10(26AAB) ON THE REASON THAT THE AMENDED PROVISION IS RETROSPECTIVE AND RETROACTIVE IN ITS OPERATION. THIS ISSUE IS ALREADY CONSIDERED AGAINST THE ASSESSEE BY THE HON BLE HIGH COURT OF ANDHRA PRADESH IN THE BATCH OF APPEALS IN VARIOUS AMCS WH ICH WAS REFERRED TO IN ITA NOS.421 523 TO 529 OF 2010 AND ITA NOS.2 3 4 6 7 11 20 22 32 36 37 38 39 40 41 42 AND 43 OF 2011 IN THE CASE OF AGRICU LTURAL MARKET COMMITTEE TANUKU AND OTHERS DATED 30.03.2011. HENCE THESE G ROUNDS ARE DISMISSED. 18.3 GROUND NOS.5 6 & 7 : THESE GROUNDS ARE ON TH E ISSUE OF EXEMPTION U/S 11. FOR THE REASONS STATED IN PARA-8 ON FIRST ISSUE DISCUSSED ABOVE THE CLAIMS ARE RESTORED TO THE FILE OF THE A.O. FOR FRESH CONS IDERATION. 18.4 GROUND NO.8: THE GROUND IS ON ALLOWANCE OF VARIOUS EXPENDITURES PAID ON THE DIRECTIONS OF DIRECTOR MARKETING NOT ALLOWE D. ISSUE WAS DISCUSSED IN PARAS 9 & 10 ABOVE. FOR THE REASONS STATED ABOVE T HE MATTER IS RESTORED TO AO. GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 18.5 GROUND NO.9: THE GROUND IS FOR CONSIDERATION ALTERNATELY UNDER SECTION 36(1)(XIII). SINCE WE ARE CONSIDERING THE ISSUE U/ S 11 OF THE ACT PROVISIONS OF SECTION 36(1)(XIII) OF BUSINESS COMPUTATION DO NOT APPLY. GROUND REJECTED. 18.6 GROUND NO.10: THIS GROUND IS ON ALLOWANCE OF DEPRECIATION. FOR THE REASONS DISCUSSED IN PARAS 11 & 12 ABOVE WE ALLOW THE GROUND FOR STATISTICAL PURPOSES. 18.7 GROUND NO.11: THIS GROUND IS ON REOPENING THE ASSESSMENT U/S 148. THIS GROUND IS NOT PRESSED AND ACCORDINGLY TREATED AS W ITHDRAWN. 18.8 AO IS DIRECTED TO CONSIDER THE ISSUES ACCOR DINGLY. 18.9 APPEALS BY ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 14 19. ITA NO.234/VIZAG/2009: 19.1 GROUND NO.1: THIS GROUND IS GENERAL IN NATURE . 19.2 GROUND NOS.2 3 & 4: THESE GROUNDS ARE WITH REFERENCE TO THE CLAIM OF LOCAL AUTHORITY AND EXEMPTION U/S 10(26AAB) ON THE REASON THAT THE AMENDED PROVISION IS RETROSPECTIVE AND RETROACTIVE IN ITS OPERATION. THIS ISSUE IS ALREADY CONSIDERED AGAINST THE ASSESSEE BY THE HON BLE HIGH COURT OF ANDHRA PRADESH IN THE BATCH OF APPEALS IN VARIOUS AMCS WH ICH WAS REFERRED TO IN ITA NOS.421 523 TO 529 OF 2010 AND ITA NOS.2 3 4 6 7 11 20 22 32 36 37 38 39 40 41 42 AND 43 OF 2011 IN THE CASE OF AGRICU LTURAL MARKET COMMITTEE TANUKU AND OTHERS DATED 30.03.2011. HENCE THESE G ROUNDS ARE DISMISSED. 19.3 GROUND NOS.5 6 & 7 : THESE GROUNDS ARE ON TH E ISSUE OF EXEMPTION U/S 11. FOR THE REASONS STATED IN PARA-8 ON FIRST ISSUE DISCUSSED ABOVE THE CLAIMS ARE RESTORED TO THE FILE OF THE A.O. FOR FRESH CONS IDERATION. 19.4 GROUND NO.8: THE GROUND IS ON ALLOWANCE OF VARIOUS EXPENDITURES PAID ON THE DIRECTIONS OF DIRECTOR MARKETING NOT ALLOWE D. ISSUE WAS DISCUSSED IN PARAS 9 & 10 ABOVE. FOR THE REASONS STATED ABOVE T HE MATTER IS RESTORED TO AO. GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 19.5 GROUND NO.9: THE GROUND IS FOR CONSIDERATION ALTERNATELY UNDER SECTION 36(1)(XIII). SINCE WE ARE CONSIDERING THE ISSUE U/ S 11 OF THE ACT PROVISIONS OF SECTION 36(1)(XIII) OF BUSINESS COMPUTATION DO NOT APPLY. GROUND REJECTED. 19.6 GROUND NO.10: THIS GROUND IS ON ALLOWANCE OF DEPRECIATION. FOR THE REASONS DISCUSSED IN PARAS 11 & 12 ABOVE WE ALLOW THE GROUND FOR STATISTICAL PURPOSES. 19.7 GROUND NO.11: THIS GROUND IS ON REOPENING THE ASSESSMENT U/S 148. THIS GROUND IS NOT PRESSED AND ACCORDINGLY TREATED AS W ITHDRAWN. 19.8 AO IS DIRECTED TO CONSIDER THE ISSUES ACCOR DINGLY. 19.9 APPEAL BY ASSESSEE IS PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. 20. ITA NO.235/VIZAG/2009: 20.1 GROUND NO.1: THIS GROUND IS GENERAL IN NATURE . 20.2 GROUND NOS.2 3 & 4: THESE GROUNDS ARE WITH REFERENCE TO THE CLAIM OF LOCAL AUTHORITY AND EXEMPTION U/S 10(26AAB) ON THE REASON THAT THE AMENDED PROVISION IS RETROSPECTIVE AND RETROACTIVE IN ITS OPERATION. THIS ISSUE IS ALREADY CONSIDERED AGAINST THE ASSESSEE BY THE HON BLE HIGH COURT OF ANDHRA ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 15 PRADESH IN THE BATCH OF APPEALS IN VARIOUS AMCS WH ICH WAS REFERRED TO IN ITA NOS.421 523 TO 529 OF 2010 AND ITA NOS.2 3 4 6 7 11 20 22 32 36 37 38 39 40 41 42 AND 43 OF 2011 IN THE CASE OF AGRICU LTURAL MARKET COMMITTEE TANUKU AND OTHERS DATED 30.03.2011. HENCE THESE G ROUNDS ARE DISMISSED. 20.3 GROUND NOS.5 6 & 7 : THESE GROUNDS ARE ON TH E ISSUE OF EXEMPTION U/S 11. FOR THE REASONS STATED IN PARA-8 ON FIRST ISSUE DISCUSSED ABOVE THE CLAIMS ARE RESTORED TO THE FILE OF THE A.O. FOR FRESH CONS IDERATION. 20.4 GROUND NO.8: THE GROUND IS ON ALLOWANCE OF VARIOUS EXPENDITURES PAID ON THE DIRECTIONS OF DIRECTOR MARKETING NOT ALLOWE D. ISSUE WAS DISCUSSED IN PARAS 9 & 10 ABOVE. FOR THE REASONS STATED ABOVE T HE MATTER IS RESTORED TO AO. GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 20.5 GROUND NO.9: THE GROUND IS FOR CONSIDERATION ALTERNATELY UNDER SECTION 36(1)(XIII). SINCE WE ARE CONSIDERING THE ISSUE U/ S 11 OF THE ACT PROVISIONS OF SECTION 36(1)(XIII) OF BUSINESS COMPUTATION DO NOT APPLY. GROUND REJECTED. 20.6 GROUND NO.10: THIS GROUND IS ON ALLOWANCE OF DEPRECIATION. FOR THE REASONS DISCUSSED IN PARAS 11 & 12 ABOVE WE ALLOW THE GROUND FOR STATISTICAL PURPOSES. 20.7 GROUND NO.11: THIS GROUND IS ON REOPENING THE ASSESSMENT U/S 148. THIS GROUND IS NOT PRESSED AND ACCORDINGLY TREATED AS W ITHDRAWN. 20.8 AO IS DIRECTED TO CONSIDER THE ISSUES ACCOR DINGLY. 20.9 APPEAL BY ASSESSEE IS PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. 21 . ITA 269/VIZAG/2009: 21.1 GROUND NO.1: THIS GROUND IS GENERAL IN NATURE . 21.2 GROUND NOS.2 3 4 &5 ARE WITH REFERENCE TO THE CLAIM OF LOCAL AUTHORITY NON-TAXABILITY U/S 4 & 5 OF THE ACT AND ALSO EXAMIN ED CLAIM U/S 10(26AAB) OF THE ACT ON THE REASON THAT THE AMENDED PROVISION IS RET ROSPECTIVE AND RETROACTIVE IN ITS OPERATION. THIS ISSUE IS ALREADY CONSIDERED AG AINST THE ASSESSEE BY THE HONBLE HIGH COURT OF ANDHRA PRADESH IN THE BATCH O F APPEALS IN VARIOUS AMCS WHICH WAS REFERRED TO IN ITA NOS.421 523 TO 529 OF 2010 AND ITA NOS.2 3 4 6 7 11 20 22 32 36 37 38 39 40 41 42 AND 43 OF 2011 IN THE CASE OF AGRICULTURAL MARKET COMMITTEE TANUKU AND OTHERS DAT ED 30.03.2011. HENCE THESE GROUNDS ARE DISMISSED. 21.3 GROUND NO.6 IS ON THE ISSUE OF EXEMPTION U/S 1 1 OF THE ACT. FOR THE REASONS STATED IN PARA-8 ON FIRST ISSUE DISCUSSED A BOVE THE CLAIM IS RESTORED TO THE FILE OF THE A.O. FOR FRESH CONSIDERATION. ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 16 21.4 GROUND NO.7 IS ON ALLOWANCE OF VARIOUS EXPENDI TURES PAID ON THE DIRECTIONS OF DIRECTOR MARKETING NOT ALLOWED. ISS UE WAS DISCUSSED IN PARAS 9 & 10 ABOVE. FOR THE REASONS STATED ABOVE THE MATTER IS RESTORED TO AO AND GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 21.5 GROUND NOS.8 & 9 ARE REGARDING LEVY OF INTERE ST U/S 234A & B OF THE ACT WHICH IS CONSEQUENTIAL IN NATURE. 21.6 AO IS DIRECTED TO CONSIDER THE ISSUES ACCOR DINGLY. 21.6 APPEAL BY ASSESSEE IS PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. 22. ITA NOS.270 & 271/VIZAG/2009: 22.1 GROUND NO.1: THIS GROUND IS GENERAL IN NATURE . 22.2 GROUND NOS.2 3 5 & 6 ARE WITH REFERENCE TO THE CLAIM OF LOCAL AUTHORITY AND EXEMPTION U/S 10(26AAB) ON THE REASON THAT THE AMENDED PROVISION IS RETROSPECTIVE AND RETROACTIVE IN ITS OPERATION. TH IS ISSUE IS ALREADY CONSIDERED AGAINST THE ASSESSEE BY THE HONBLE HIGH COURT OF A NDHRA PRADESH IN THE BATCH OF APPEALS IN VARIOUS AMCS WHICH WAS REFERRED TO I N ITA NOS.421 523 TO 529 OF 2010 AND ITA NOS.2 3 4 6 7 11 20 22 32 36 37 38 39 40 41 42 AND 43 OF 2011 IN THE CASE OF AGRICULTURAL MARKET COMMITTE E TANUKU AND OTHERS DATED 30.03.2011. HENCE THESE GROUNDS ARE DISMISSED. 22.3 GROUND NO.4 IS ON REOPENING THE ASSESSMENT U/S 148. THIS GROUND IS NOT PRESSED AND ACCORDINGLY TREATED AS WITHDRAWN. 22.4 GROUND NO.7 IS ON THE ISSUE OF EXEMPTION U/S 1 1 OF THE ACT. FOR THE REASONS STATED IN PARA-8 ON FIRST ISSUE DISCUSSED A BOVE THE CLAIM IS RESTORED TO THE FILE OF THE A.O. FOR FRESH CONSIDERATION. 22.5 GROUND NO.8 IS ON ALLOWANCE OF VARIOUS EXPENDI TURES PAID ON THE DIRECTION OF DIRECTOR MARKETING NOT ALLOWED. ISSUE WAS DISC USSED IN PARAS 9 & 10 ABOVE. FOR THE REASONS STATED ABOVE THE MATTER IS RESTORE D TO A.O. GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 22.6 GROUND NOS.9 & 10 ARE REGARDING LEVY OF INTERE ST WHICH IS CONSEQUENTIAL IN NATURE. 22.7 AO IS DIRECTED TO CONSIDER THE ISSUES ACCOR DINGLY. 22.8 APPEALS BY ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 17 23. ITA NOS.291 & 292/VIZAG/2009: 23.1 GROUND NO.1: THIS GROUND IS GENERAL IN NATURE . 23.2 GROUND NOS.2 3 4 &5 ARE WITH REFERENCE TO THE CLAIM OF LOCAL AUTHORITY NON-TAXABILITY U/S 4 & 5 OF THE ACT AND ALSO EXAMIN ED CLAIM U/S 10(26AAB) OF THE ACT ON THE REASON THAT THE AMENDED PROVISION IS RET ROSPECTIVE AND RETROACTIVE IN ITS OPERATION. THIS ISSUE IS ALREADY CONSIDERED AG AINST THE ASSESSEE BY THE HONBLE HIGH COURT OF ANDHRA PRADESH IN THE BATCH O F APPEALS IN VARIOUS AMCS WHICH WAS REFERRED TO IN ITA NOS.421 523 TO 529 OF 2010 AND ITA NOS.2 3 4 6 7 11 20 22 32 36 37 38 39 40 41 42 AND 43 OF 2011 IN THE CASE OF AGRICULTURAL MARKET COMMITTEE TANUKU AND OTHERS DAT ED 30.03.2011. HENCE THESE GROUNDS ARE DISMISSED. 23.3 GROUND NO.6 IS ON THE ISSUE OF EXEMPTION U/S 1 1 OF THE ACT. FOR THE REASONS STATED IN PARA-8 ON FIRST ISSUE DISCUSSED A BOVE THE CLAIM IS RESTORED TO THE FILE OF THE A.O. FOR FRESH CONSIDERATION. 23.4 GROUND NO.7 IS ON ALLOWANCE OF VARIOUS EXPENDI TURES PAID ON THE DIRECTIONS OF DIRECTOR MARKETING NOT ALLOWED. ISS UE WAS DISCUSSED IN PARAS 9 & 10 ABOVE. FOR THE REASONS STATED ABOVE THE MATTER IS RESTORED TO AO AND GROUND IS ALLOWED FOR STATISTICAL PURPOSES. 23.5 GROUND NOS.8 & 9 ARE REGARDING LEVY OF INTERE ST U/S 234A & B OF THE ACT WHICH IS CONSEQUENTIAL IN NATURE. 23.6 AO IS DIRECTED TO CONSIDER THE ISSUES ACCOR DINGLY. 23.7 APPEALS BY ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 24. IN THE RESULT APPEALS FILED BY THE ASSESSEE AR E PARTLY ALLOWED FOR STATISTICAL PURPOSES. P RONOUNCED IN THE OPEN COURT ON 11 TH DEC13 SD/ - SD/ - ( SAKTIJIT DEY ) ( B. RAMAKOTAIAH ) JUDICIAL MEMBER ACCOUNTANT MEMBER VG/SPS VISAKHAPATNAM DATED 11 TH DECEMBER 2013 ITA NOS.226/VIZ/2009 ETC. AMC GOPALAPURAM ETC. . 18 COPY TO 1 AMC GOPALAPURAM 10 THE CIT GUNTUR 2 AMC PENUGONDA 11 THE CIT RAJAHMUNDRY 3 AMC NARASAPURAM 12 THE CIT VIJAYAWADA 4 AMC TANUKU 13 THE CIT(A) GUNTUR 5 AMC ATTILI 14 THE CIT (A) RAJAHMUNDRY 6 AMC POLAVARAM 15 THE CIT (A) VIJAYAWADA 7 AMC UNDI 16 THE DR ITAT VISAKHAPATNAM 8 AMC AKIVIDU 17 GUARD FILE. 9 AMC KOVVUR BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM