COMMISSIONER OF INCOME TAX, HISAR vs. MARKET COMMITTEE BHUNA

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ITA/826/2010HC Punjab & HaryanaPHHC01093800201028 January 2011Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court, in its decision, noted that the revenue's counsel fairly stated that the first substantial question of law (i) is covered by a previous judgment of the same Court dated 05.07.2010 in ITA No. 151 of 2010 (Commissioner of Income-Tax, Hisar Vs. Market Committee, Narwana). Furthermore, the second substantial question of law (ii) was stated to be covered by another judgment of the same Court delivered on the same day in ITA No. 823 of 2010 (Commissioner of Income Tax, Hisar Vs. Market Committee, Tohana). Based on these submissions, the Court concluded that no substantial question of law arose for consideration. Consequently, the appeals were dismissed. The operative direction was the dismissal of the appeals.

What were the facts?

The revenue, Commissioner of Income-Tax, Hisar, filed Income-tax Appeal No. 826 of 2010 against an order dated 18.06.2009 passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'F', New Delhi. The appeal pertains to the assessment year 2006-07 and challenges the ITAT's decision regarding an expenditure of Rs. 37,00,000/- claimed by the assessee, Market Committee, Bhuna. The expenditure was claimed as a contribution to the HSAM Board under statutory obligation as per Section 27 of the Punjab Agricultural Produce Market Act, 1961. The revenue also questioned the fulfillment of mandatory requirements of Section 11(2) of the Income-tax Act, 1961, concerning the purpose of accumulation.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether the expenditure of Rs. 37,00,000/- contributed to the HSAM Board under statutory obligation is allowable, considering the lack of evidence for its actual incurrence and whether it falls within the ambit of application of income for charitable purposes as defined in Section 2(15) of the Income-tax Act, 1961. 2. Whether the assessee fulfilled the mandatory requirements of Section 11(2) of the Income-tax Act, 1961, without specifically mentioning the definite purpose(s) of accumulation in Form No. 10. The revenue contended that no evidence was produced to prove the actual incurrence of the expenditure and questioned its eligibility as a charitable application of income. The revenue also argued that the assessee failed to meet the requirements of Section 11(2) regarding the specific purpose of accumulation. The judgment does not record any specific arguments from the assessee's side.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income-tax Appeal No.826

of 2010

-1- **** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income-tax Appeal No.826

of 2010

Date of decision: 28.1.2011 Commissioner of Income-Tax, Hisar ...Appellant Versus Market Committee, Bhuna ...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 order will dispose of ITAs No.824 and 826 of 2010 as it is stated that questions involved in both the appeals are same.

2.

ITA No.826 of 2010 has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 against order dated 18.6.2009 passed by the Income Tax Appellate Tribunal, Delhi Bench 'F', New Delhi in ITA No.1412/Del/09, for the assessment year 2006-07, raising following substantial question of law:- “(i) Whether on the facts and in the circumstances of the case, the learned CIT(A) was justified in holding that the expenditure of Rs.37,00,000/- 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 Income-tax Appeal No.826

of 2010

-2- **** 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, 1961? (ii) 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 mentioned the definite propose or purposes of accumulation in form No.10?”

3.

Learned counsel for the revenue very fairly states that question (i) is covered by the judgment of this Court dated 5.7.2010 in ITA No.151 of 2010 (Commissioner of Income-Tax, Hisar Vs. Market Judge

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