Income Tax Appellate Tribunal - Jaipur
Jaipur Zila Dugdh Utpadak Sangh Ltd., ... vs Department Of Income Tax on 17 July, 2015
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM
vk;dj vihy la-@ITA No. 128/JP/2013
fu/kZkj.k o"kZ@Assessment Year : 2009-10
Asstt. Commissioner of cuke M/s. Jaipur Zila Dugdh
Income Tax, Circle-6, Vs. Utpadak Sangh Ltd., Jaipur
Jaipur. Dairy, Near Gandhi Nagar
Railway Station, Jaipur.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABCN 8927 B
vihykFkhZ@Appellant izR;FkhZ@Respondent
ITA No. 142/JP/2013
Assessment Year : 2009-10.
M/s. Jaipur Zila Dugdh cuke Dy. Commissioner of Tax
Utpadak Sangh Ltd., Jaipur Vs. Officer, Circle-6, Jaipur.
Dairy, Near Gandhi Nagar
Railway Station, Jaipur.
vihykFkhZ@Appellant izR;FkhZ@Respondent
jktLo dh vksj ls@ Revenue by : Smt. Neena Jeph, JCIT
fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal, CA
lquokbZ dh rkjh[k@ Date of Hearing : 22/06/2015
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 17/07/2015
2
ITA NO. 128/JP/2013 & 142/JP/2013 A.Y. 2009-10
M/s. Jaipur Zila Dugdh Utpadak Sangh Ltd., Jaipur.
vkns'k@ ORDER
PER R.P. TOLANI, JM
These are two cross appeals one by Revenue and other by assessee filed against the order of ld. CIT (A)-II, Jaipur dated 21.11.2012. The sole ground raised in Revenue's appeal is as under :-
" On the facts and in the circumstances of the case the ld. CIT (Appeals) has erred in deleting the addition of Rs. 85,66,157/- made by the AO by disallowing contribution made to 'Sparsh Trust' without appreciating the fact that assessee failed to prove direct business nexus and it is not an allowable expenditure u/s 37(1)"
2. The ld. CIT (A) allowed the claim of the payments to "Sparsh Trust" relying on ITAT's order in assessee's own case in ITA No. 820/JP/2011 dated 15.03.2012 holding as under :-
" After considering the submissions, orders of the authorities below, we find that assessee deserve to succeed in its ground raised. It is noticed that before creating SPARSH, the assessee was doing all these expenditure itself. Just for betterment of administrative services, the assessee created the Trust through whom these expenses are incurred. The Profit & Loss account of the Trust is maintained, copy of which is placed in the compilation and it is seen that whatever the amount has been given by assessee or reimbursed by assessee that has been spent by the Trust on the animals to get better Quality and quantity of milk. The assessee had contributed @ Rs. 0.05 paise per liter of milk procured to its Trust for the purpose of incurring 3 ITA NO. 128/JP/2013 & 142/JP/2013 A.Y. 2009-10 M/s. Jaipur Zila Dugdh Utpadak Sangh Ltd., Jaipur.
expenditure for better quality of milk. An agenda note was prepared which clearly states that the purpose of the contribution is for medicals and health facility of the animals of the milk producers at the District Level. The contribution made by the assessee to trust is thus directly linked with the procurement of better quality, hygienic and more quantity of the milk. It is in the interest of the assessee that the milk animals at the village level from where it procures the milk are healthy & for this purpose, SPARSH trust incurred expenditure in providing vaternity care, regular treatment, emergency care, preventive care, breed improvement through A.I. uninterrupted supply of nutritional supplement etc. Therefore, in our considered view, contribution made by assessee to this trust is an expenditure incurred wholly and exclusively for the purpose of business which is allowable under section 37(1). From the Income and expenditure account of the Trust, it can be noted that it has incurred an expenditure of Rs. 80,35,447/- in pursuance of its objective and after considering the receipts, there is a deficit of Rs. 23,48,303/- to the trust sin the year under consideration. Such deficit is met out of the contribution made by the assessee to the trust. It is further seen that before creating this Trust, the assessee was incurring all these expenses itself and all these expenses were allotted by the department while completing assessment under section 143(3). Therefore, this is not a case that assessee has made any donation to any Trust and, therefore, the same cannot be allowed as business expenditure. The ld. CIT (A) has disallowed the claim of the assessee by observing that since assessee has made donation under section 80G and, therefore, deduction under 4 ITA NO. 128/JP/2013 & 142/JP/2013 A.Y. 2009-10 M/s. Jaipur Zila Dugdh Utpadak Sangh Ltd., Jaipur.
section 80G is allowable whereas the facts are otherwise. The assessee has not made any donation but has contributed to the trust for a specific purpose i.e. to incur the expenditure to get better milk from milk animal. Various case law relied upon by assessee are in support of the case of the assessee. We are not getting into details in respect to those cases as they have already have mentioned in the written submissions which are reproduced herein above. In view of these facts and circumstances, we hold that the expenditure/contribution made by assessee is allowable as business expenditure. Accordingly, the addition made and confirmed by the lower authorities is deleted."
3. We have heard both the parties on the issue. Since the issue in question is squarely covered in favour of the assessee by the ITAT judgment in its own case, especially following the same, we uphold the order of ld. CIT (A). Thus Revenue's appeal is dismissed.
4. In the assessee's appeal the only ground raised is as under :-
" The ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the disallowance of Rs. 20,18,213/- being contribution made to rehabilitation fund."
5. The ld. Counsel for the assessee contended that in the case of assessee's apex body M/s. Rajasthan Cooperative Dairy Federation Ltd. similar disallowance was made in earlier year. The ld. CIT (A) following that order rejected the claim of the assessee. However, in the case of Rajasthan Cooperative Dairy Federation, the facts are distinguishable in as much as a separate Rehabilitation Fund has been 5 ITA NO. 128/JP/2013 & 142/JP/2013 A.Y. 2009-10 M/s. Jaipur Zila Dugdh Utpadak Sangh Ltd., Jaipur.
created by RCDF which is registered under section 12AA. In RCDF's case also in A.Y. 2010-11 the ld. CIT (A) holding that the contribution was made to separate Rehabilitation Fund created by it which was registered under section 12AA allowed the claim of the assessee. In view thereof the claim may be allowed or alternatively submitted that the case may be set aside to the file of A.O. to decide afresh after considering the relevant aspects.
6. The ld. D/R is heard.
7. We have heard rival submissions and perused the material on record. We fund merit in the alternative contention of ld. Counsel for the assessee. In view of the fact that assessee created a separate Rehabilitation Trust which is registered under section 12AA of the IT Act and in the case of RCDF on these facts the claim has been allowed in A.Y. 2010-11, we set aside the matter to decide the same afresh in accordance with law after giving assessee an opportunity of being heard.
8. In the result, Revenue's appeal is dismissed and assessee's appeal is allowed for statistical purposes.
Order is pronounced in the open court on 17/7/15.
Sd/- Sd/-
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(T.R. Meena) (R.P. Tolani)
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t;iqj@Jaipur
fnukad
a @Dated:- 17/7/2015.
Das/
6
ITA NO. 128/JP/2013 & 142/JP/2013 A.Y. 2009-10
M/s. Jaipur Zila Dugdh Utpadak Sangh Ltd., Jaipur.
vkns'k dh izfrfyfi vxzfs 'kr @ Copy of the order forwarded to:
1. vihykFkhZ@The Appellant-ACIT/DCIT, Circle-6, Jaipur.
2. izR;FkhZ@The Respondent- Jaipur Zila Dugdh Utpadak Sangh Ltd., Jaipur.
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr ¼vihy½@ The CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@ DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No.128 & 142/JP/2013) vkns'kkuqlkj@By Order, Lkgk;d iathdkj@ Asst. Registrar