COMMISSIONER OF INCOME TAX, SEC-14, HISAR vs. MARKET COMMITTEE FATEHANAD

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ITA/211/2011HC Punjab & HaryanaPHHC01095534201121 July 2011Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court noted that the substantial questions of law raised in the present appeal were covered by previous decisions of the same Court. Specifically, Question No. 1 was covered by the decision in Commissioner of Income Tax, Hisar vs. Market Committee, Narwana (Income Tax Appeal No. 151 of 2010), decided on 5.7.2010. Question No. 2 was covered by the decision in Commissioner of Income Tax, Hisar vs. Market Committee, Tohana (Income Tax Appeal No. 823 of 2010), decided on 28.1.2011. In both these cited cases, the appeals preferred by the Revenue had been dismissed. Therefore, following these precedents, the present appeal was also dismissed. The specific reasoning of the Tribunal on the allowability of the expenditure and the fulfillment of Section 11(2) requirements, as per the cited High Court judgments, is not detailed in this order, but the dismissal implies affirmation of the Tribunal's findings.

What were the facts?

The Revenue, Commissioner of Income Tax, Hisar, filed an appeal under Section 260A of the Income-Tax Act, 1961, against an order dated 25.6.2010 passed by the Income Tax Appellate Tribunal, Delhi Bench ‘E’, New Delhi. The appeal pertains to assessment year 2007-08 and challenges the Tribunal's decision regarding the allowability of an expenditure of Rs. 82,50,000/- claimed by the assessee, Market Committee, Fatehabad. The expenditure was claimed as a contribution to the HSAM Board under a statutory obligation. The procedural history involves the assessee claiming the expenditure, the Revenue challenging its allowability, and the Tribunal ruling in favor of the assessee, leading to the present appeal by the Revenue.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether the Tribunal was justified in holding that an expenditure of Rs. 82,50,000/-, claimed as a contribution to the HSAM Board under statutory obligation by virtue of Section 27 of the Punjab Agricultural Produce Market Act, 1961, is allowable, without appreciating that the assessee produced no evidence to prove actual incurrence and whether such contribution falls within the ambit of application of income for charitable purposes as defined in Section 2(15) of the Act? 2. Whether the Tribunal was justified in holding that the assessee fulfilled the mandatory requirements of Section 11(2) without specifically mentioning the definite purpose(s) of accumulation in Form No. 10? Contentions: Assessee: Not recorded in the judgment. Revenue: Argued that no evidence was produced to prove the expenditure and questioned its classification under Section 2(15). Also argued that Section 11(2) requirements were not met due to lack of specific purpose in Form No. 10. The Revenue relied on its own appeals in similar matters.

Which sections of the Income-tax Act were involved?

Section 260A,Section 2(15),Section 11(2),Section 27

AI-generated summary — verify with the full judgment below

Income Tax Appeal No. 211 of 2011 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. --- Income Tax Appeal No. 211 of 2011 Date of decision: 21.7.2011 Commissioner of Income Tax, Hisar --- Appellant Versus Market Committee, Fatehabad --- Respondent CORAM: HON’BLE MR. JUSTICE ADARSH KUMAR GOEL ACTING CHIEF JUSTICE HON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- Present: Mr. Yogesh Putney, Senior Standing Counsel for the appellant-revenue. --- AJAY KUMAR MITTAL, J. This appeal under Section 260A of the Income-Tax Act, 1961 (for short “the Act”) has been filed by the revenue against the order dated 25.6.2010, passed by the Income Tax Appellate Tribunal Delhi Bench ‘E’, New Delhi (in short “the Tribunal”) in ITA No. 1747/Del/2010, relating to the assessment year 2007-08. 2. The following substantial questions of law have been claimed for determination of this Court:

“1. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was justified in holding that the expenditure of Rs. 82,50,000/- claimed to have been Income Tax Appeal No. 211 of 2011 2 contributed to HSAM Board under statutory obligation by virtue of Section 27 of the Punjab Agricultural Produce Market Act, 1961 is allowable without appreciating that no evidence could be produced by the assessee to prove that such expenditure was actually incurred and whether such contribution can be treated to fall within the ambit of application of income for charitable purposes as defined in Section 2(15) of the Act?

2.

Whether on the facts and circumstances of the case, the learned ITAT was justified in holding that the assessee has fulfilled the mandatory requirements of Section 11(2) without specifically mentioning the definite purpose or purposes of accumulation in Form No. 10.” 3. *rkmalik*

Income Tax Appeal No. 211 of 2011 3

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