Appellant's Arguments Dismissed, Deduction Allowed Based on Gross Receipts.

The appellant's contentions regarding the notice under section 143(2) and the treatment of receipts by Mandi Parishad were dismissed, with the ITAT ruling against the appellant on these grounds. However, the appellant succeeded in arguing for the deduction for accumulation of income under section 11(1)(a), with the ITAT agreeing that the deduction should be based on gross receipts rather than net income. The ITAT allowed the appeal on this issue, applying its findings from a previous case to partially allow the appeals in this matter.

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Issues:
1. Notice under section 143(2) not served properly
2. Treatment of receipts by Mandi Parishad
3. Deduction for accumulation of income under section 11(1)(a)

Issue 1: Notice under section 143(2) not served properly
The appellant contended that the assessment order was invalid due to the absence of a mandatory notice under section 143(2). However, this ground was not pressed and dismissed. The appellant also argued that the CIT(A) erred in directing the Assessing Officer to make a reference to another officer without proper examination of accounts, which was deemed unnecessary.

Issue 2: Treatment of receipts by Mandi Parishad
The dispute centered around the treatment of receipts by Mandi Parishad, with the CIT(A) making observations regarding the accounting principles. The ITAT referred to a previous case involving a similar issue and concluded that the observations made by the CIT(A) were unwarranted as they were based on irrelevant material and lacked an opportunity for the concerned parties to present their case. The ITAT allowed the appellant's ground based on the previous judgment.

Issue 3: Deduction for accumulation of income under section 11(1)(a)
The dispute revolved around the calculation of the deduction for accumulation of income under section 11(1)(a) of the Act. The appellant argued that the deduction should be based on gross receipts, not net income. Citing Supreme Court judgments, the ITAT agreed with the appellant's interpretation, emphasizing that the deduction should be calculated based on the total receipts received by the assessee. Therefore, the ITAT allowed the appellant's appeal on this ground.

In a separate appeal, similar issues were raised, including the notice under section 143(2), treatment of receipts by Mandi Parishad, and the deduction for accumulation of income. The ITAT applied its findings from the first appeal to this case, allowing the appeals partly.

In conclusion, the ITAT addressed the issues comprehensively, ensuring that legal principles and precedents were considered in delivering the judgment.

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