Agricultural Produce Markdt Committee,, Sangli v. ITO, Wd.-2(3),, Sangli

ITA 664/PUN/2010 | 2005-2006
Pronouncement Date: 28-02-2012 | Result: Partly Allowed

Appeal Details

RSA Number 66424514 RSA 2010
Assessee PAN AAAAA3276E
Bench Pune
Appeal Number ITA 664/PUN/2010
Duration Of Justice 1 year(s) 9 month(s) 28 day(s)
Appellant Agricultural Produce Markdt Committee,, Sangli
Respondent ITO, Wd.-2(3),, Sangli
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2012
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 28-02-2012
Assessment Year 2005-2006
Appeal Filed On 30-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I C SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NO.664/PN/10 (ASSTT YEAR: 2005-06) AGRICULTURAL PRODUCE MARKET COMMITTEE .. APPELL ANT A/P ATPADI DIST. SANGLI PAN - AAAAA3276E VS. INCOME-TAX OFFICER .. RESPONDEN T WD. 2(3) SANGLI APPELLANT BY : SHRI PRAMOD SHINGTE RESPONDENT BY : SMT ANN KAPUSTHAMA DATE OF HEARING : 09.02.20 12 DATE OF PRONOUNCEMENT : 28.02. 2012 ORDER PER G.S. PANNU A.M .: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) KOLHAPUR DATED 2 2.12.2009 WHICH IN TURN HAS ARISEN FROM ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3) OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2005-06. 2. IN GROUND NO. 1 THE ASSESSEE IS AGGRIEVED BY AN AD H OC DISALLOWANCE MADE OUT OF DIRECTORS TRAVELLING OF RS 3000/- AND GENE RAL EXPENSES OF RS 2000/- . THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS AN AGRICULTURAL PRODUCE MARKET COMMITTEE CONSTITUTED U NDER A STATUTORY ACT AND ITS ACCOUNTS ARE SUBJECTED TO STATUTORY AUDIT IN LAW; THAT BOTH THE LOWER AUTHORITIES HAVE FAILED TO PIN POINT ANY UNVERIFIABL E VOUCHERS SO AS TO JUSTIFY THE IMPUGNED DISALLOWANCES. 3. WE HAVE CONSIDERED THE ORDERS OF THE AUTHORITIES BEL OW AS ALSO THE OBJECTIONS PUT-FORTH BY THE APPELLANT. IT IS EVIDENT T HAT THE EXPENSES HAVE BEEN DISALLOWED ON THE GROUND THAT THE VOUCHERS ARE NOT VE RIFIABLE AND THE SAME HAVE BEEN AFFIRMED BY THE COMMISSIONER OF INCOME-TAX ( APPEALS). IN OUR VIEW THERE IS NO INCIDENCE OF ANY INFIRMITY IN THE EXPENSE S CLAIMED BY THE ASSESSEE UNDER THE AFORESAID HEADS AND DISALLOWANCES HAVE BEEN M ADE MERELY ON BALD ASSERTIONS REGARDING UNVERIFIABILITY OF VOUCHERS. T HEREFORE IN THIS FACTUAL BACKGROUND WE DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE IMPUGNED DISALLOWANCES WHICH ARE HEREBY DIRECTED TO BE DELETED. THE ASSESSEE SUCCEEDS ON THIS GROUND. 4. THE SECOND GROUND IS WITH REGARD TO A DISALLOWANCE OF RS 15 000/- OUT OF ELECTION EXPENDITURE. THE ASSESSEE CLAIMED ELECTION EX PENDITURE AT RS 25 000/- WHICH WAS RESTRICTED TO RS 10 000/-BY THE ASSESSIN G OFFICER ON THE GROUND THAT BALANCE WAS NOT ADMISSIBLE IN TERMS OF THE P ROVISIONS OF THE AGRICULTURE PRODUCE MARKET COMMITTEE ACT. THE ASSESSEE EXPLAINED THAT THOUGH AS PER THE PROVISIONS OF THE APMC ACT ONLY A SUM OF RS 10 000/- WAS TO BE PROVIDED YET THE SAID LIMIT WAS FIXED MUCH EARL IER AND ON ACCOUNT OF INFLATION EXPENSES ARE GENERALLY HIGHER AND THEREFO RE SOUGHT TO JUSTIFY THE EXPENDITURE OF RS 25 000/- PROVIDED FOR ELECTION FUND . THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ALSO AFFIRMED THE STAND OF TH E ASSESSING OFFICER. 5. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE REIT ERATED THE PLEA RAISED BEFORE THE LOWER AUTHORITIES WHEREAS THE LEARN ED DEPARTMENTAL REPRESENTATIVE HAS AFFIRMED THE STAND OF THE REVENUE BASED ON THE FACT THAT THE AMOUNT DISALLOWABLE IS ONLY IN TERMS OF THE LIMITS LAID DOWN IN THE APMC ACT. 6. IN OUR VIEW THE CLAIM OF THE ASSESSEE IS QUITE JUSTI FIED AND IS ALLOWABLE ON ACCOUNT OF EXIGENCIES OF CARRYING ON THE BUSINESS. SO HOWEVER WHEREAS THE PROVISION TOWARDS ELECTION FUND IS ALLOWABLE AS PER THE LIMITS SPECIFIED IN THE APMC ACT BALANCE OF THE EXPENDITURE IS ALLOWABLE TO THE ASSESSEE AS AND WHEN THE SAME IS INCURRED. WE THEREFORE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND DIRECT THE ASSESSI NG OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE ON THE AFORESAID BASIS. THU S THE ASSESSEE SUCCEEDS PARTLY ON THIS GROUND. 7. THE LAST GROUND IS WITH REGARD TO INTEREST INCOME OF RS 1 03 142/- ADDED BY THE ASSESSING OFFICER TO THE RETURNED INCOME. A S PER THE ASSESSING OFFICER SAID AMOUNT WAS INTEREST ACCRUED ON FIXED DEPOSI TS WITH VARIOUS BANKS WHICH WAS NOT ACCOUNTED FOR BY THE ASSESSEE IN ITS ACCOUN T BOOKS. THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS ALSO SUSTAINED THE ADDITION. 8. BEFORE US THE LEARNED COUNSEL SUBMITTED THAT THOUG H SAID AMOUNT WAS NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT YET SAME WOUL D NOT CONSTITUTE INCOME ASSESSABLE IN THE HANDS OF THE ASSESSEE INASMUCH A S THE SAME RELATED TO SPECIFIC FUNDS AND SUCH INCOME ACCRUED ONLY TO TH OSE RESPECTIVE FUNDS. IN THIS REGARD OUR ATTENTION HAS BEEN INVITED TO PAGE 3 OF THE PAPER BOOK WHEREIN IT IS POINTED OUT THAT OUT OF 5 ITEMS 4 ITEMS PERTAIN TO EMPLOYEES WELFARE FUND LIKE PROVIDENT FUND GRATUITY FUND LE AVE SALARY ETC. AND SAME ARE TO BE CREDITED TO SUCH FUNDS AND NOT IN THE HANDS O F THE ASSESSEE ITSELF. IN OUR VIEW IN PRINCIPLE THE PLEA OF THE ASSESSEE DESERVES TO BE VERIFIED AND THEREAFTER ADJUDICATED. IN THE ABSENCE OF ANY SUCH ADJU DICATION BY THE LOWER AUTHORITIES WE DEEM IT FIT AND PROPER TO SET ASIDE TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND DIRECT THE ASSESSI NG OFFICER TO CONSIDER THE AFORESAID PLEA OF THE ASSESSEE AND THEREAFTE R PASS AN ORDER AFRESH ON THIS ASPECT OF THE DISPUTE. THUS ON THIS POINT ASSESSEE SUCCEEDS FOR STATISTICAL PURPOSES. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 28 TH DAY OF FEBRUARY 2012. SD/- SD/- (I C SUDHIR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMB ER PUNE DATED 28 TH FEBRUARY 2012 B COPY TO:- 1) AGRICULTURAL PRODUCE MARKET COMMITTEE ATPADI 2) ITO WD 2(3) SANGLI 3) THE CIT (A) KOLHAPUR 4 THE CIT KOLHAPUR 5) DR A BENCH I.T.A.T. PUNE. 6) GUARD FILE TRUE COPY BY ORDER SR. PS ITAT PUNE