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2021 (2) TMI 1083 - AT - Income TaxTaxability of receipts from the welfare trusts under normal provisions of the Act as well as while computing the book profits u/s 115JB - contributions received by the welfare trusts were partially invested in equity shares of listed / unlisted companies on which the trusts received dividends which were duly offered to tax in the respective years by the trusts and also claimed credit for Tax deducted at source thereon AND part of the contributions received by the welfare trusts were advanced by way of loans to parties on which interest was received, which was also duly offered to tax in the respective years by the trusts and also claimed credit for Tax deducted at source thereon - HELD THAT:- Unutilized portion lying in the trust funds which were claimed back by the assessee company was never in contemplation by the assessee company as assessee had all along treated the said contribution being made to an irrevocable trust fund and the eligibility to get back the monies got triggered only pursuant to insertion of provisions of Section 40A(11) of the Act in the statute and not otherwise. Hence, the said receipt being the unutilized portions, received back from the welfare trusts by the assessee company would not partake the character of a revenue receipt constituting income and would merely have to be treated as a windfall or non-recurring receipt not liable to tax, though not exempted under specific provisions of the Act. It is not in dispute that the welfare trusts had duly suffered taxes on the accretions to the contributions received in the form of dividends and interest on loans in its regular returns and assessed as such. Hence, the accretion portion had already suffered taxes in the hands of the welfare trusts. Taxing the same again in the hands of the assessee company while getting back the unutilized portion would tantamount to double taxation. Accordingly, we hold that the receipt have to be excluded while computing total income of the assessee under normal provisions of the Act. Ground raised by the assessee are allowed. Non-applicability of provisions of Section 115JB - HELD THAT:- All the companies in India are governed by the very same provisions wherein if they suffered nil taxes or zero taxes under the normal provisions of the Act or the tax payable under normal provisions is less than tax @18.5% of book profits, then the provisions of Section 115JB of the Act would be applicable to those companies and assessee company alone cannot be singled out or isolated from the same. These provisions are in force from the year 1987 onwards commencing from Section 115J which had gradually migrated to Section 115JB of the Act without digressing from the true intention behind introduction of these provisions in the Act. Hence, the primary argument that Section 115JB of the Act is not applicable to the assessee company in the instant case is hereby rejected. Accordingly, the ground No.1 raised by the assessee is dismissed. Non-taxability of the receipt from the welfare trusts by the assessee company while computing book profits u/s.115JB of the Act, even though the same was credited by it in its profit and loss account - HELD THAT:- Respectfully following the Co-ordinate Bench decision of JSW Ltd. [2017 (4) TMI 47 - ITAT MUMBAI] and the decision of the Hon’ble Calcutta High Court in the case of Ankit Metal and Power Ltd. [2019 (7) TMI 878 - CALCUTTA HIGH COURT] we hold that the sum receipts from the welfare trusts is to be a capital receipt and not liable to tax while computing books profits u/s.115JB of the Act. Accordingly, the ground Nos. 2 & 3 raised by the assessee are allowed.
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