TMI Blog2010 (6) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Respondent. ORDER Per Bench. These two appeals by the assessees are directed against the separate orders each dated 18-2-2010 of CIT(A)-I, Lucknow Common issues are involved in these appeals which were heard together, so these are disposed of by this consolidated order for the sake of convenience. 2. In I.T.A. No. 301/Luck./10, the assessee has raised the following grounds: 1. BECAUSE the mandatory notice under section 143(2) having not been issued and served in accordance with the provisions of law as contained in section 282 of the Act read with the relevant provision of Civil Procedure Code, 1908, the ld. CIT(A) should have held that the assessment order dated 1-7-2008 is bad in law. WITHOUT PREJUDICE TO THE AFORESAID 2. BECAUSE the ld. CIT(A) had no occasion to observe, in para 9 of the order dated 18-2-2010, that: ' ..This treatment of receipts by Mandi Parishad is not in consistency with accounting principles and treatment by Mandi Samiti. Payment treated as expenditure or application by Mandi Samitis has to be treated as business receipt by Mandi Parishad. The Parishad cannot treat it as liability, as these receipts are firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready reproduced above, would clarify that the grievance of the assessee relates to the following common observations of the ld. CIT(A) in para 12.4 of the order dated 24-12-2009, para 10.4 of the order dated 24-12-2009 and para 12.5 of the order dated 23-12-2009: 12.4 Having accepted that the money transferred by Mandi Samiti to Mandi Parishad is application of income, what is important as well as essential is that the amount transferred by the Mandi Samiti in terms of payment to Mandi Parishad must be accounted for by Mandi Parishad as its business receipts. If this amount transferred to Mandi Parishad is not treated as advance but application of income by the Mandi Samiti, it cannot be treated as liability in the hands of Mandi Parishad. It has been informed that Vikas Cess collected by the Samitis and transferred to Mandi Parishad is not credited by the Mandi Parishad to its income and expenditure Account but directly credited to Cess Fund (Central mandi fund). The rest of the receipts from the Mandi Samitis are also treated by the Parishad as liabilities and directly credited in the Balance Sheet under Mandi Vikas Nidhi. This treatment of receipts by Mandi Parishad is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the ITAT, the ground raised by the assessee is allowed. 8. The issue involved in ground No. 3 relates to the deduction for accumulation of income as provided in section 11(1)(a) of the Act. 9. The facts related to this issue, in brief, are that the assessee had shown total receipt of ₹ 1,32,19,569 as per receipt and payment account, however, the Assessing Officer had calculated the exemption @15 per cent under section 11(1)(a) of the Act with reference to ₹ 68,32,435. 10. The assessee carried the matter to learned CIT(A) who, after considering the submissions of the assessee, observed that the assessee had shown the receipt at ₹ 1,33,03,467 in the receipts and payment account and after allowing deduction for administrative and other expenses, the income of the assessee worked out to ₹ 96,58,261, therefore, the benefit of accumulation upto 15 per cent of the income should be calculated with reference to the said figure instead of ₹ 68,32,435 worked out by the Assessing Officer. Now the assessee is in appeal. 11. The learned counsel for the assessee submitted that for the purposes of deduction for accumulation of income to the extent of 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound of assessee's appeal. 14. In I.T.A. No. 302/Luc/10, similar grounds have been raised which were in I.T.A. No. 301/Luc/10 (supra), one another issue vide ground Nos. 3.1 3.2 has also been raised. The grounds raised by the assessee read as under: 1. BECAUSE the mandatory notice under section 143(2), having not been issued and served in accordance with the provisions of law as contained in section 282 of the Act read with the relevant provision of Civil Procedure Code, 1908, the ld. CIT(A) should have held that the assessment order dated 20-10-2008 is bad in law. WITHOUT PREJUDICE TO THE AFORESAID 2. BECAUSE the ld. CIT(A) had no occasion to observe, in para 8-2-3 of the order dated 18-2-2010, that: ' ..This treatment of receipts by Mandi Parishad is not in consistency with accounting principles and treatment by Mandi Samiti. Payment treated as expenditure or application by Mandi Samitis has to be treated as business receipt by Mandi Parishad. The Parishad cannot treat it as liability, as these receipts are firstly non-voluntary contribution by Samitis, secondly non-refundable and are not considered by Samitis as advance in their books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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