Madhya Pradesh High Court
Commissioner Of Income Tax vs Mohanlal Mishrilal & Sons. (Also Cit V. ... on 25 March, 1996
Equivalent citations: (1996)135CTR(MP)483
ORDER
A. R. TIWARI, J. :
At the instance of the applicant (CIT, Bhopal), the Tribunal has stated the cases and referred the undernoted common question of law, as extracted below, under s. 256(1) of the IT Act, 1961 (for short the Act), on particulars as documented for our consideration and opinion :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that Mandi fee was not a tax nor a duty within the meaning of cl. (a) of s. 43B of the IT Act, 1961 ?"
2. Briefly stated, the facts of each case are as under :
(A) Misc. Civil Case No. 380 of 1992 :
The Department filed applications under s. 256(1) of the Act which were registered as RA No. 253 and 259/Ind/91 arising out of the orders passed by the Tribunal in ITA No. 111 and 414/Ind/1988 for asst. yrs. 1984-85 and 1985-86. The assessee is a registered firm. The ITO found that there was outstanding balance of Rs. 24,256 in the asst. yr. 1984-85 and of Rs. 26,800 in the asst. yr. 1985-86, in Krishi Upaj Mandi Account. He held that provisions of s. 43B of the Act were attracted. He, therefore, made addition of the said amount to the income of the assessee. On appeal, the CIT(A) held that the Mandi Tax was a fee collected for the services rendered and as such provisions of s. 43B of the Act were not attracted. He, therefore, deleted the additions. The Department then filed appeals before the Tribunal. The Tribunal held that it was neither a tax nor a duty but a fee and the word "fee" was inserted in s. 43B(a) of the Act w.e.f. 1st April, 1989. Placing reliance on S. Subbarao & Co. vs. Union of India (1988) 173 ITR 708 (AP) , the Tribunal dismissed the appeals. The Department then filed an application under s. 256(1) of the Act proposing two questions. The Tribunal, however, accepted the application in part and referred only one question of law, as noted above.
(B) Misc. Civil Case No. 382 of 1992 :
The Department filed application under s. 256(1) of the Act which was registered as RA No. 305/Ind/1991 arising out of the order passed by the Tribunal in ITA No. 106/Ind/1990 for asst. yr. 1985-86. The assessee is a registered firm. The ITO found that there was outstanding balance of Rs. 26,021 in Mandi Tax Account as payable to Krishi Upaj Mandi Committee. He held that provisions of s. 43B of the Act were attracted. He, therefore, made addition of the said amount to the income of the assessee. On appeal, the CIT(A) held that the Mandi Tax was a fee collected for the services rendered and as such provisions of s. 43B of the Act were not attracted. He, therefore, deleted the additions. The Department then filed appeal before the Tribunal. The Tribunal held that it was neither a tax nor a duty but a fee and the word "fee" was inserted in s. 43B(a) of the Act w.e.f. 1st April, 1989. Placing reliance on S. Subbarao & Co. vs. Union of India (supra), the Tribunal dismissed the appeal. The Department then filed an application under s. 256(1) of the Act proposing two questions. The Tribunal, however, accepted the application in part and referred only one question of law, as noted above.
(C) Misc. Civil Case No. 383 of 1992 :
The Department filed application under s. 256(1) of the Act which was registered as RA No. 304/Ind/1991 arising out of the order passed by the Tribunal in ITA No. 718/Ind/1990 for asst. yr. 1986-87. The assessee is a registered firm. The ITO found that there was outstanding balance of Rs. 48,606 in Mandi Tax Account as payable to Krishi Upaj Mandi Committee. He held that provisions of s. 43B of the Act were attracted. He, therefore, made addition of the said amount to the income of the assessee. On appeal, the CIT(A) held that the Mandi Tax was a fee collected for the services rendered and as such provisions of s. 43B of the Act were not attracted. He, therefore, deleted the additions. The Department then filed appeal before the Tribunal. The Tribunal held that it was neither a tax nor a duty but a fee and the word "fee" was inserted in s. 43B(a) of the Act w.e.f. 1st April, 1989. Placing reliance on S. Subbarao & Co. vs. Union of India (supra), the Tribunal dismissed the appeal. The Department then filed an application under s. 256(1) of the Act proposing two questions. The Tribunal, however, accepted the application in part and referred only one question of law, as noted above.
(D) Misc. Civil Case No. 384 of 1992 :
The Department filed application under s. 256(1) of the Act which was registered as RA No. 257/Ind/1991 arising out of the order passed by the Tribunal in ITA No. 68/Ind/1989 for asst. yr. 1984-85. The assessee is a registered firm. The AO found that there was outstanding balance of Rs. 5,903 in Mandi Tax Account as payable to Krishi Upaj Mandi Committee. He held that provisions of s. 43B of the Act were attracted. He, therefore, made addition of the said amount to the income of the assessee. On appeal, the CIT(A) held that the Mandi Tax was a fee collected for the services rendered and as such provisions of s. 43B of the Act were not attracted. He, therefore, deleted the addition. The Department then filed appeal before the Tribunal. The Tribunal held that it was neither a tax nor a duty but a fee and the word "fee" was inserted in s. 43B(a) of the Act w.e.f. 1st April, 1989. Placing reliance on S. Subbarao & Co. vs. Union of India (supra), the Tribunal dismissed the appeal. The Department then filed an application under s. 256(1) of the Act proposing two questions. The Tribunal, however, accepted the application in part and referred only one question of law, as noted above.
(E) Misc. Civil Case No. 385 of 1992 :
The Department filed application under s. 256(1) of the Act which was registered as RA No. 256/Ind/1991 arising out of the order passed by the Tribunal in ITA No. 58/Ind/1989 for asst. yr. 1984-85. The assessee is a registered firm. The AO found that there was outstanding balance of Rs. 11,958 in Mandi Tax Account as payable to Krishi Upaj Mandi Committee. He held that provisions of s. 43B of the Act were attracted. He, therefore, made addition of the said amount to the income of the assessee. On appeal, the CIT(A) held that the Mandi Tax was a fee collected for the services rendered and as such provisions of s. 43B of the Act were not attracted. He, therefore, deleted the addition. The Department then filed appeal before the Tribunal. The Tribunal held that it was neither a tax nor a duty but a fee and the word "fee" was inserted in s. 13B(a) of the Act w.e.f. 1st April, 1989. Placing reliance on S. Subbarao & Co. vs. Union of India (supra), the Tribunal dismissed the appeal. The Department then filed an application under s. 256(1) of the Act proposing two questions. The Tribunal, however, accepted the application in part and referred only one question of law, as noted above.
3. We have heard Shri D. D. Vyas, learned counsel for the applicant/Department in all these Misc. Civil Cases. We also heard Shri Nazir Singh, learned counsel for the applicant/assessee in Misc. Civil Case Nos. 382 and 383 of 1992. None appeared for the non-applicant/assessee in Misc. Civil Case Nos. 380, 384 and 385 of 1992.
4. The similar question was referred by the Tribunal in Misc. Civil Case No. 381 of 1992 [CIT vs. Dineshkumar Gordhanlal [since reported at (1996) 135 CTR (MP) 481]. However, as the point had stood concluded against the Department in decisions in (1988) 173 ITR 708 (AP) (supra) and CIT vs. Mohansingh & Sons (1995) 216 ITR 432 (MP), the question was answered in favour of the assessee and against the Department.
5. The aforesaid question thus stands concluded. Nothing substantial is urged to persuade us to take a different view in the matter.
6. Accordingly we answer the question in all these Misc. Civil Cases in the affirmative i.e. in favour of the assessee and against the Department.
7. These Misc. Civil Cases are thus decided in terms indicated above, but without any order as to costs.
8. Counsel fee for each side in each case is, however, fixed at Rs. 750, if certified.
9. A copy of this common order shall be transmitted to the Tribunal immediately with reference to the aforesaid cases for information.
10. Retain this order in the record of Misc. Civil Case No. 380 of 1992 and place its each copy in the record of connected Misc. Civil Cases, as particularised above, for ready reference.