Tribunal decision: Deduction allowed for market fees, depreciation claim upheld, exemption under Income Tax Act granted

The Tribunal dismissed the Revenue's appeal regarding the allowability of payment of market fees to the Agricultural Marketing Board as application of income for charitable purposes, upholding the deduction claimed on market fees paid. The Tribunal also allowed the claim for depreciation on fixed assets but remitted the issue back to the Assessing Officer for further verification. Additionally, the Tribunal upheld the decision of the CIT(A) in allowing the exemption under section 11(2) of the Income Tax Act once the necessary resolution was furnished by the assessee.

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Issues involved: The judgment involves issues related to the allowability of payment of market fees to the Agricultural Marketing Board as application of income for charitable purposes and the allowability of depreciation on fixed assets.

Allowability of payment of market fees: The appeals by the Revenue were against the orders of CIT(A) Rohtak allowing payment of market fees to the Agricultural Marketing Board as application of income for charitable purposes under section 11(1) of the Income Tax Act. The Tribunal noted that the contribution to the Board by the market committee was a statutory requirement under the Punjab Agricultural Produce Markets Act, 1961. Referring to previous decisions, the Tribunal upheld the claim of the assessee, stating that the contribution was spent on specified development projects and not for the benefit of the market committee. Consequently, the appeal of the Revenue was dismissed, allowing the deduction claimed on market fees paid to the Board for charitable purposes.

Allowability of depreciation on fixed assets: The issue raised was against the allowability of depreciation on fixed assets, the cost of which was claimed and allowed as application of income towards charitable purposes. Referring to previous decisions, the Tribunal held that depreciation should be allowed on assets for which the cost had been fully allowed as application of income under section 11 in past years. The Tribunal directed the issue to be restored to the Assessing Officer for verification of additions made to fixed assets and the rate of depreciation to be allowed. The claim of deduction on account of depreciation was allowed, but the issue was remitted back to the Assessing Officer for further verification.

Exemption u/s 11(2) of the IT Act: The Revenue raised a ground regarding the allowance of exemption u/s 11(2) amounting to a specific sum. The basis for disallowing the claim under section 11(2) was the non-furnishing of the resolution passed by the trust along with Form No.10. The assessee later provided the copy of the resolution before the CIT(A), leading to the allowance of the claim. The Tribunal upheld the decision of the CIT(A) in allowing the claim once the resolution was furnished, as the Revenue failed to provide evidence to the contrary. Consequently, the ground raised by the Revenue was dismissed.

In conclusion, all the appeals of the Revenue were partly allowed, with different issues being addressed and decided upon by the Tribunal.

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