TMI Blog2015 (5) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... or statistical purposes. - ITA No.246/LKW/2013, ITA No.624/LKW/2012 - - - Dated:- 16-4-2015 - Shri Sunil Kumar Yadav And Shri. A. K. Garodia JJ. For the Appellant : Shri. Shubham Rastogi, FCA For the Respondent : Shri. Punit Kumar, D.R. ORDER Per Sunil Kumar Yadav : These appeals are preferred by the assessee against the order of the ld. CIT(A) on a solitary ground that the ld. CIT(A) was not justified in confirming the addition of ₹ 9,43,620/- in assessment year 2009-10 and ₹ 1,88,042/- in assessment year 2008-09. 2. During the course of hearing, the ld. counsel for the assessee has moved an application for admission of the following common additional grounds for the reason that these grounds goes to the root of the case and hence the same may be admitted:- 1. The Ld. C. I. T. (Appeals)-ll, Lucknow erred on facts and in law in upholding the order of the Ld. A. 0. without appreciating the facts, circumstances, Rules, Regulations and material on record. 2. The Ld. C. I. T. (A)- did not appreciated the effect of statutory provision of U.P. Sugar Cane (Regulation of Supply and Purchase) Act, 1953 and the Rules made there under, the recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has examined the issue in the light of various judicial pronouncements and was of the view that since these arguments are raised first time before the Tribunal, this aspect should be examined by the Assessing Officer while assessing the income of the assessee. The Tribunal accordingly set aside the order of the ld. CIT(A) and restored the matter to the file of the Assessing Officer with a direction to re-examine the claim of the assessee in the light of the new arguments. The relevant observations of the Tribunal are extracted hereunder:- 6. Now, the assessee is before the Tribunal and has taken altogether a new plea or ground that the receipts of the assessee cannot be treated as income u/s 2 (24) of the Act as it was merely a grant from the Government and the commission for the Sugar Factories for specific purpose. In support of his contention, the Ld. Counsel for the assessee has invited our attention to the provisions of Section 5 and 6 of the U.P. Sugar Cane (Regulation of Supply and Purchase) Act 1953 and the order of the CIT (A) dt. 18.02.2014 in the case of M/s. Cane Development Council, Rozagaon, Faizabad and the Orders of the Tribunalin the following cases:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egulation of Supply and Purchases) Act 1953 r/w rule 8 of the U.P. Sugar cane (Regulation of Supply and Purchases) Rules 1954. On division of the U.P. State and formation of Uttrakhand State later on, these Act and Rules have been adopted by the Uttrakhand State also as it. The functioning and activities of the assessee are stated to be governed by the provisions made under this Act and Rules. It has also been submitted that as per section 6 of the said Act, the functions of the assesseee are that it carries out only the development activities in the area assigned to it by the Cane Commissioner of the State. It was also submitted in the written submissions that there is no provision under the said-Act/Rule authorizing the appellant to do any business activity with profit motive or to earn any income/profit and the appellant carries out the development activities as specified under aforesaid Act on no profit no loss basis. The appellant is merely a fund management body without any right of absolute ownership over the funds placed at its disposal. It is further mentioned here that the said roads, culverts, etc. are constructed by the appellant on the land belonging to the govt. and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the revenue have already been addressed in the earlier part of this order. We are the view that ground no. 1, 2 3 in the appeals of the assessee deserves to be dismissed as the same have not been addressed in the written submission and it is presumed that the assessee has nothing to say. The finding of the CIT(A) reproduced in the earlier part of this order as such are confirmed. Qua the grounds 4, 5 6 of the assessee and departmental grounds 1 2, the findings arrived at in para 6.6, the same is modified and the issue is restored to the file of the AO with the direction to address the specific provisions to the extent that the AO shall look into the specific Rules and Sections which the assessee wants the canvass in support its claim for the said purpose, assessee has relied on the order of Co -ordinate Bench in ITA No.154/Del/2008 in the case of CIT Vs N.S. Committee, Village - Thanabhawan, Tehsil - Shamli, Distt. - Muzaffarnagar wherein the departmental grounds agitating the issue of Anshdan and NirmanYogna Fund has taken a view in para 6 which reads as under :- We have heard the Ld. DR and gone through facts on the case indisputably, the Ansh Dan and fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) so as to enable us to take a different view in the matter, there is no basis to interfere with his findings. Consequently, ground No. 1 to 3 in the appeal is dismissed. Accordingly the AO shall decide the issue in accordance with law qua ground no-4, 5 6 of the assessee and ground no-w 2 of the Revenue in line with the order of the Co-ordinate Bench. Needless to say that the assessee shall be affording a reasonable opportunity of being heard. 12. In the case of CIT Vs U.P. Upbhokta Sahkarisangh Ltd. (Supra), the Hon ble Allahabad High Court has held that where the amount was given by the State Government for specific purpose, it did not partake of the nature of the assessee. Even if it was treated as an income, it would not be liable to tax as it was stated that there was diversion of the income by way of overriding titles on the said amount by the way of condition. 13. In the case of DIT Vs. Society for Development Alternatives in ITA Nos.12 of 2012 and 18 of 2012, the Hon ble High Court of Delhi has also dealt with similar issue and has held that where assessee received grants for specific purposes from the government, non government and foreign institution e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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