2016 (11) TMI 537 - ITAT MUMBAI

Addition treating the donation received as professional income - settlement of the disputes between the workers and their employers - Held that:- As in the case of the sister concern of the assessee, the settlement of the disputes between the workers and their employers was negotiated by the assessee to avoid any stand of between the employers and the workers by playing a vital role. The contribution received by the assessee is only in respect of and on account of its activities in achieving the objects, as per Constitution. The amount received by the assessee from the employers/employees has a direct nexus with the negotiation and settlement arrived at between the parties. Thus, the activity of the assessee cannot be generalized in the nature of professional services simplicitor. The contribution from the employer is received as per agreement and incidental to the activities of the services rendered by the assessee in resolving the disputes between the member workers and the employers with the intention of welfare of the members/workers. Thus, following the aforesaid decisions, it is noted that there is no material brought on record by the Assessing Officer evidencing that the amount received by the assessee from the employers as well as from the workers are not voluntary. In the absence of any contrary material and it has been accepted that the contribution of workers are exempt under section 10(24). Similar is the situation in respect of amounts received from counterparty, being employer, in pursuant to settlement / resolution of disputes, as exempt under section 10(24) of the Act. Following the aforesaid order, we are of the view that the amounts so received by the assessee cannot be treated as business or profession, consequently should have been treated as exempt under section 10(24) of the Act as well as on the principle of mutuality being distributed among the members. - Decided in favour of assessee

Addition on account of workers aid - addition made on the plea that the assessee could not produce vouchers, evidencing payments and merely filed affidavit of nine persons only - Held that:-So far as, non-production of vouchers is concerned, the assessee has filed affidavit from Shri N.R. Agrawal & Company, who audited the account of the assessee and has duly confirmed that they saw the vouchers at the relevant time and due to reasons stated before us as well as before the Ld. Commissioner of Income Tax (Appeals), such vouchers could not be produced. Identical affidavits were filed form the General Secretary of the Union, from accountant of the union, three affidavits from the workers as a sample, detailed chart with name of each worker to whom the aid was provided, resolution of the Managing commission etc. It is also noted that such expenses are authorized by the Constitution of the Union and such aid is paid to the workers when the units of a particular union of workers are on strike and such workers are unable to meet their household expenditure. It is also noted that no such addition was made for Assessment year 2003-04 which is also based on similar facts. The original assessment for earlier three Assessment years was made under section 143(3) of the Act and no addition was made - Decided in favour of assessee

Reopening of assessment after a lapse of four years - Held that:- Since, there was no new tangible material available with the Assessing Officer while resorting to section 147/148 of the Act, more specifically, while framing original assessment u/s 143(3) of the Act, there was full disclosure of material facts by the assessee and on the basis of those facts, assessment was completed u/s 143(3) of the Act, therefore, on the legal issue we decide the issue in favour of the assessee.