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

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ITA/187/2011HC Punjab & HaryanaPHHC01095506201112 July 2011Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court noted that the learned counsel for the appellant (Revenue) fairly stated that the matter was covered against the Revenue by a previous judgment of the same Court dated 5.7.2010 in I.T.A. No. 151 of 2010 in the case of CIT v. Market Committee, Narwana. Therefore, based on the precedent established in the Narwana case, the appeal was dismissed. The specific reasoning or findings of the ITAT on the allowability of the expenditure or its characterization as application of income for charitable purposes were not elaborated upon by the High Court in this judgment, as it relied on the prior ruling.

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 pertained to the assessment year 2007-08 and challenged the ITAT's decision regarding the allowability of an expenditure of Rs. 1,41,62,401/- claimed by the assessee, Market Committee, Tohana. This expenditure was claimed as a contribution to the HSAM Board under a statutory obligation arising from Section 27 of the Punjab Agricultural Produce Market Act, 1961. The Revenue disputed whether this expenditure was actually incurred and if it qualified as application of income for charitable purposes under Section 2(15) of the Income-tax Act.

What were the issues?

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. 1,41,62,401/- 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? Contentions: Assessee: No arguments recorded for the assessee. Revenue: Argued that the ITAT was not justified in allowing the expenditure as no evidence was produced by the assessee to prove its actual incurrence, and questioned whether such a contribution falls within the definition of application of income for charitable purposes under Section 2(15) of the Income-tax Act.

Which sections of the Income-tax Act were involved?

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

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, Tohana -----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.1746/DEL/2010 for the assessment year 2007-08 proposing following question 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.1,41,62,401/- 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?

Learned counsel for the appellant fairly states that the matter 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 Accordingly, this appeal is dismissed. (ADARSH KUMAR GOEL) ACTING CHIEF JUSTICE July 12, 2011 ( AJAY KUMAR MITTAL ) ashwani JUDGE 2

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