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2019 (4) TMI 548 - AT - Income TaxIncome of State government society - accrual of real income - amounts collected on account of selling VAT forms - 20% of receipt was to be remitted affront to the State treasury, while 80% was to be retained by it for meeting out expenses and balance thereafter to be remitted to the State treasury - scope of amendment to section 40(a) - Registration u/s 12AA refused as activities carried on by the society were not for the benefit of general public utility, but was for providing infrastructure facilities to the State Government (Excise and Taxation Department) - HELD THAT:- These issues have already been decided by the I.T.A.T. in the earlier years in the case of the assessee holding that 20% of the amount received which was remitted directly to the State treasury was not the income of the assessee while relief of 80% of the amount was allowed to the extent the surplus remaining out of it was remitted to the State Government in the impugned year. Further the order of the ITAT is upheld by HC [2018 (12) TMI 834 - HIMACHAL PRADESH HIGH COURT] The Revenue has pointed out that an amendment has been brought on Statute to section 40(a) by inserting clause (iib) disallowing amounts remitted to State Governments claimed as expenditure and the said amendment is effective from the impugned year only. Notwithstanding the same, since the Hon'ble High Court has held that the remaining 80% of the collection by the assessee was not in the nature of income at all we are bound by the same. Respectfully following the case of the assessee for preceding years therefore we hold that the entire amount collected by the assessee was not in the nature of its income. - decided in favour of assessee.
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