DY. CIT,3(1), BHOPAL vs. M/S KRISHI UPAJ MANDI SAMITI, MANDI COMPOUND, SEHORE

आदेश / O R D E R

PER KUL BHARAT, J.M: This appeal by the revenue is directed against order of the CIT(A)-2, Bhopal dated 19.9.2017 pertaining to the

“The Ld. CIT has erred in facts and circumstances of the case by directing the Assessing Officer to assess the income of the appellant at Rs.Nil.” 2. At the time of hearing, no one appeared on behalf of the assessee. It is noticed that there was no representation for the last 3 hearings. It is also found that notice of hearing was duly served upon the assessee. Therefore, the appeals are taken up for hearing in the absence of the assessee. The facts giving rise to the present appeal are that the assessee filed a return of income declaring total income at Rs.Nil. The assessment was completed u/s 143(3) of the Income Tax Act, 1961 (hereinafter called as ‘the Act’) on 31.12.2010 and income was assessed at Rs.14,27,380/-. Subsequently, the case was reopened u/s 147 of the Act and the assessment was framed u/s 147 r.w.s. 143(3) of the Act on 22.3.2016. The A.O. while making reassessment made addition of Rs.4,54,813/- in 2

[ ] [M/s. Krishi Upaj Mandi Samiti, Sehore] respect of excess claim of depreciation. Aggrieved by this, the assessee preferred an appeal before Ld. CIT(A).

“7. All the grounds of appeal are being taken up together. It is seen that the appellant has obtained registration u/s 12AA of the Act w.e.f. 1.4.2003. In the case of original assessment u/s 143(3) dated 31.12.2010, an appeal was preferred by the appellant against the additions made by the A.O. in the assessment order and the Ld. CIT(A)-1, Bhopal had decided that as the expenditure after addition the disallowed expenses is more than 85% of the total receipts of the appellant, hence there was no income liable for tax. As per the appeal order of the Ld. CIT(A)-1, Bhopal reproduced above, it was clearly mentioned that the application of funds of Rs.5,29,13,937/- was in excess of 85% of the total receipts of the appellant at Rs.5,17,82,032/-. Now even if, the total amount of Rs.4,54,813/- added by the A.O. is not considered as application of funds for charitable purpose, the balance amount of application of funds would be Rs.5,24,59,124/- (Rs.5,29,13,937 – Rs.4,54,813), which is in excess of 85% of the total receipts of the appellant. Thus, there was no income liable for tax during the year under consideration and the income had to be assessed at Rs.Nil. The A.O. is therefore, directed to assess the income of the appellant for the year under consideration at Rs.Nil.”

[ ] [M/s. Krishi Upaj Mandi Samiti, Sehore] 5. The basis of deleting the addition by the Ld. CIT(A) is that even the excess claim of depreciation is disallowed, in that event also, the amount would not be taxable as the assessee is registered u/s 12AA of the Act. We have given thoughtful consideration to this reasoning of the Ld. CIT(A).

The revenue could not rebut the fact that even if it is disallowed, the income would not be taxable. Therefore, we do not see any reason to interfere in the finding of the Ld. CIT(A). The ground raised by the revenue is dismissed.

Order was pronounced in the open court on 08 .05.2019.