COMMISSIONER OF INCOME TAX, HISAR vs. MARKET COMMITTEE JAKHAL

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ITA/825/2010HC Punjab & HaryanaPHHC01093799201028 January 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 filed by the Revenue. The Court noted that the substantial question of law raised in the appeal had already been decided against the Revenue by the same Court in a previous order dated 5.7.2010 in ITA No.151 of 2010 (Commissioner of Income-Tax, Hisar Vs. Market Committee, Narwana). Therefore, no substantial question of law arose for consideration in the present appeal. The Court did not delve into the merits of the specific arguments regarding the nature of the payment as application of income or sharing by overriding title, as the matter was covered by a prior decision. The operative direction was to dismiss the appeal.

What were the facts?

The Revenue (Commissioner of Income-Tax, Hisar) has appealed under Section 260A of the Income Tax Act, 1961, against an order dated 18.6.2009 passed by the Income Tax Appellate Tribunal, Delhi Bench 'F'. The appeal pertains to the assessment year 2006-07 and concerns the Market Committee, Jakhal, as the respondent. The dispute revolves around the deductibility of 30% of market fees earned by the Market Committee, which was paid to the Haryana Agricultural Marketing Board. The Revenue challenged the decision allowing this payment as an application of income for charitable purposes.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the learned CIT(A) was justified in allowing payment of 30% of Market fees earned by the assessee (Market Committee) and paid to the Haryana Agricultural Marketing Board as an application of income for charitable purposes, despite the finding that this 30% had to be paid as a statutory obligation under the Agricultural Marketing Board Act, and therefore, it is not an application of income but a sharing of income by an overriding title? Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue argued that the payment of 30% of market fees to the Haryana Agricultural Marketing Board was a statutory obligation and constituted sharing of income by an overriding title, not an application of income for charitable purposes. They relied on the principle that statutory payments are not deductible as application of income.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Income-tax Appeal No.825

of 2010

-1- **** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income-tax Appeal No.825

of 2010

Date of decision: 28.1.2011 Commissioner of Income-Tax, Hisar ...Appellant Versus Market Committee, Jakhal ...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)

This Appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) against order dated 18.6.2009 passed by the Income Tax Appellate Tribunal, Delhi Bench 'F', New Delhi in ITA No.1411/Del/09, for the assessment year 2006-07, raising following substantial question of law:- “Whether on the facts and in the circumstances of the case, the learned CIT(A) was justified in allowing payment of 30% of Market fees earned by it paid to Haryana Agricultural Marketing Board as application of income for charitable purpose, despite the finding that 30% of the market fee has to be Income-tax Appeal No.825

of 2010

-2- **** paid to the said Board as a statutory obligation under the Agricultural Marketing Board Act, and, therefore, it is not application of income, but it is sharing of Income by an overriding title as per the Act by which the Market Committee is governed?” Learned counsel for the revenue very fairly states that question raised has been decided against the revenue by this Court vide order dated 5.7.2010 in ITA No.151 of 2010 (Commissioner of Income-Tax, Hisar Vs. Market Committee, Narwana). In view of above, no substantial question of law arises.

The appeal is dismissed.

(Adarsh Kumar Goel)

Judge January 28,2011 (Ajay Kumar Mittal) Pka

Judge

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