IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW ‘B’ BENCH, LUCKNOW BEFORE SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER A.Y. 2013-14 Dy. Commissioner of Income vs. M/s U.P. Food & Essential Commodities Tax, Range-6, Lucknow CPoArNp:. ALtAdA., C1U73, G2o5k7hGley Marg, Lucknow-

01 (Appellant) (Respondent)

Assessee by: None Revenue by: Sh. Neeraj Kumar, CIT DR Date of hearing: 02.0 9.2025 Date of p ronouncement: O2 4R.1 D1 .E2 0R2 5 PER NIKHIL CHOUDHARY, A.M.:

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This is an appeal filed by the Revenue against the orders of the ld. CIT (A)-

2, Lucknow wherein the ld. CIT(A), Lucknow has allowed the appeal of the assessee against the orders of the ld. Assessing Officer passed under section 143(3) of the Income Tax Act for the A.Y. 2013-14 on 30.03.2016. The grounds of appeal are as under:“-1 . The Commissioner of Income Tax (Appeal)-2, Lucknow has erred in law and on facts in deleting the disallowance made on account of claim of exemption u/s 10(26AAB) of the I.T. Act, 1961 without appreciating the facts that the assessee does not fulfill the criteria to claim exemption u/s 10(26AAB) of the I.T. Act, 1961.

2. The appellant craves leave to add or amend any one or more of the grounds of appeals, as stated above, as and when need to do so arises with the prior permission of the Court.”

2. The facts of the case are that the assessee company is a U.P. Government Enterprise, claiming exemption under section 10(26AAB) of the Income Tax Act, 1961. The ld. AO was not convinced that the assessee corporation was entitled to claim the exemption under section 10(26AAB) of the I.T. Act, 1961 and therefore, she issued a show cause notice to the assessee asking it why the said exemption should not be disallowed. In response, it was submitted that any income of an agricultural produce marketing committee or board constituted for the purposes of regulating the marketing of agricultural produce was entitled to the said exemption. The assessee corporation was a 100% State Government owned corporation that had been incorporated with the object of providing essential commodities to the constituent of the State at prices which were determined by the State Government. In pursuance of its objects, the assessee corporation procured rice, wheat and palm oil and sold it as per price fixed by the Government. It was submitted that the minimum support price was fixed by the Central Government for foods procured under the price support scheme every year and the assessee corporation was purchasing the agricultural produce and marketing it under the policy of the State Government of Uttar Pradesh. It was further submitted that the assessee’s claim of exemption under section 10(26AAB) had been allowed by the CIT(A)-2, Lucknow, vide order dated 8.10.2012 for the A.Y. 2009-10 and in assessment year 2010-11, the assessment order had been stayed by the Hon’ble High Court on 19.05.2013. The ld. AO considered the submissions of the assessee and held that as per the provisions of section 10(26AAB), the said exemption was available only to the following entities created by the State under specific statute; a. Agricultural produce Marketing Committee b. Agricultural produce Marketing Board Mandi Samiti. Thus, it was clear that no other agency could qualify for the exemption under section 10(26AAB). Since the assessee corporation was not Agricultural produce marketing Committee or Board which had been constituted under any law for the purpose of marketing of agricultural produce and since it was also involved in selling of LPG gas, which did not come under agricultural produce, the ld. AO held that the assesseee was not eligible for the exemption that it had claimed. She accordingly, by relying on the subsequent order of the ld. CIT(A)-4, Lucknow dated 26.02.2015 disallowed the exemption to the assessee corporation and added back a sum of Rs. 23,70,82,707/-.

3. Aggrieved with the decision of the ld. AO, the assessee went in appeal before the ld. C