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

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ITA/185/2011HC Punjab & HaryanaPHHC01095504201112 July 2011Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal. Regarding the first question of law concerning the allowability of the Rs. 28,00,000/- expenditure and its applicability to charitable purposes, the Court noted that this issue was covered against the Revenue by its own previous judgment dated 5.7.2010 in I.T.A. No.151 of 2010 (CIT v. Market Committee, Narwana). For the second question of law concerning the fulfillment of Section 11(2) requirements, the Court acknowledged that this issue was also covered against the Revenue by its judgment dated 28.1.2011 in I.T.A. No.823 of 2010 (Commissioner of Income Tax, Hisar v. Market Committee, Sohana). Since both questions of law were decided against the Revenue in prior judgments of the same High Court, the present appeal was dismissed on the basis of these precedents.

What were the facts?

The Revenue, Commissioner of Income Tax, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Delhi Bench. The appeal pertains to the assessment year 2007-08 and challenges the ITAT's decision regarding the allowability of an expenditure of Rs. 28,00,000/- claimed by the assessee, Market Committee, Jakhal. The expenditure was claimed as a contribution to the HSAM Board under a statutory obligation. The ITAT's order was dated 25.6.2010 in I.T.A. No.1745/DEL/2010. The appeal was filed proposing specific questions of law for determination by the High Court.

What were the issues?

The High Court was to decide two questions of law: 1. Whether the ITAT was justified in allowing an expenditure of Rs. 28,00,000/- contributed to the HSAM Board under statutory obligation (Section 27 of the Punjab Agricultural Produce Market Act, 1961), without evidence of actual incurring of expenditure and whether such contribution falls within the ambit of application of income for charitable purposes as defined in Section 2(15) of the Income-tax Act? Contentions: Assessee: Not recorded. Revenue: Argued that no evidence was produced to prove the expenditure was incurred and questioned if the contribution qualified for charitable purposes under Section 2(15). 2. Whether the ITAT 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. Revenue: Argued that the assessee failed to fulfill the mandatory requirements of Section 11(2) due to the absence of specific purposes of accumulation in Form No.10.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision: 12.7.2011 Commissioner of Income Tax -----Appellant Vs. Market Committee, Jakhal -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Yogesh Putney, Sr. Standing counsel for the Revenue. --- ADARSH KUMAR GOEL, ACJ This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order of Income Tax Appellate Tribunal, Delhi Bench “E”, New Delhi dated 25.6.2010 in I.T.A. No.1745/DEL/2010 for the assessment year 2007-08 proposing following questions of law:- “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.28,00,000/- claimed to have been 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 Income-tax 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 propose or purposes of accumulation in Form No.10?”

Learned counsel for the appellant fairly states that as far as question (1) is concerned, the same is covered against the revenue by judgment of this Court dated 5.7.2010 in I.T.A. No.151 of 2010 in CIT v. Market Committee, Narwana and as far as questions (2) is concerned, the same is covered against the revenue by judgment of this Court dated 28.1.2011 in I.T.A. No.823 of 2010 Commissioner of Income Tax, Hisar v. Market Committee, Sohana. Accordingly, this appeal is dismissed. (ADARSH KUMAR GOEL) ACTING CHIEF JUSTICE July 12, 2011 ( AJAY KUMAR MITTAL ) ashwani JUDGE 2

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