COMMISSIONER OF INCOME-TAX, HISAR vs. MARKET COMMITTE, RANIA

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ITA/17/2011HC Punjab & HaryanaPHHC01095487201131 March 2011Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for consideration. The Court noted that question (i) was covered against the revenue by its own judgment dated 5.7.2010 in ITA No.151 of 2010 (Commissioner of Income-Tax, Hisar Vs. Market Committee, Narwana). Similarly, questions (ii) and (iii) were covered against the revenue by another judgment of the Court dated 5.7.2010 in ITA No.535 of 2009 (Commissioner of Income Tax, Karnal Vs. Market Committee, Pipli). Consequently, the appeal was dismissed without delving into the merits of the ITAT's decision on the specific issues raised. The ratio decidendi is that if the issues raised in an appeal are already covered by previous judgments of the same court, no fresh substantial question of law arises, and the appeal can be dismissed summarily.

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 25.5.2010 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench 'A'. The appeal pertains to the assessment year 2007-08 and challenges the ITAT's decision regarding the allowability of an expenditure of Rs.59,21,662/- contributed to the HSAM Board under statutory obligation and the allowance of depreciation on capital assets. The assessee is Market Committee, Rania. The ITAT's order was passed in ITA No.427/Chd/2010.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the ITAT was justified in holding that the expenditure of Rs.59,21,662/- contributed to the HSAM Board under statutory obligation (Section 27 of the Punjab Agricultural Produce Market Act, 1961) is allowable without evidence of 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 Income Tax Act. 2. Whether the ITAT was justified in allowing depreciation on capital assets when the capital expenditure on their acquisition had already been allowed as 'application of income' for exemption under Section 11 of the Income Tax Act, leading to a double deduction. 3. Whether allowing depreciation on capital assets is justified in light of the Supreme Court decision in Escorts India Ltd. (199 ITR 43) regarding prohibiting double deductions on the same expenditure without clear statutory indication. Contentions: Assessee: Not recorded in the judgment. Revenue: Argued that the expenditure was not proven to be incurred and did not qualify as application of income for charitable purposes. Further argued that allowing depreciation on assets whose cost was already allowed as application of income amounts to double deduction, citing Escorts India Ltd.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income-tax Appeal No.17

of 2011

-1- *** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income-tax Appeal No.17

of 2011

Date of decision: 31.3.2011 Commissioner of Income-Tax, Hisar ...Appellant Versus Market Committee, Rania ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr. Yogesh Putney, Advocate for the appellant.

**** ADARSH KUMAR GOEL, J (

Oral)

.

1.

This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 against order dated 25.5.2010 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh in ITA No.427/Chd/2010, for the assessment year 2007-08, raising following substantial questions of law:- “i). Whether on the facts and in the circumstances of the case, the learned ITAT was justified in holding that the expenditure of Rs.59,21,662/- 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

Income-tax Appeal No.17

of 2011

-2- *** 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? ii).

Whether on the facts and in the circumstances of the case, the learned ITAT is justified in allowing depreciation on capital assets even when capital expenditure on acquisition of the corresponding assets had already been allowed as 'application of income' for the purpose of allowing exemption under section 11 of the income-tax Act and as such further allowing of depreciation on these capital assets will amount to double deduction for the same expenditure? iii). Whether allowing of depreciation on the capital assets by Hon'ble High Court is justified in the light of the Hon'ble Apex Court decision in the case of Escorts India Ltd. (199 ITR 43), wherein it has been held that in the absence of clear statutory indication to the contrary, the statute should not be read as to permit an assessee two deductions on the same expenditure?

3.

Learned counsel for the revenue very fairly states that Income-tax Appeal No.17

of 2011

-3- *** question (i) is covered against the revenue by the judgment of this Court dated 5.7.2010 in ITA No.151 of 2010 Commissioner of Income-Tax, Hisar Vs. Market Committee, Narwana whereas Judge

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