TMI Blog2015 (1) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... atter to the file of the Assessing Officer with the direction to the reexamine the claim of the assessee in the light of the new argument. - Decided in favour of assessee for statistical purpose. - ITA No. 56/LKW/2014 - - - Dated:- 23-1-2015 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER For the Appellant by : Shri Shubham Rastogi, C.A. For the Respondent by : Shri Rajnish Yadav, D.R. O R D E R PER SUNIL KUMAR YADAV : This appeal is preferred by the Assessee against the order of CIT (A), inter alia on following grounds :- 1. The Ld. C.I.T. (Appeals)-II, Lucknow erred on facts and in law in upholding the order of the Ld. A.O. 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 receiving are not Income u/s 2(24) of the I.T. Act. In accordance to these provisions total receiving cannot be treated as Income . 3. The Ld. C.I.T. (A) did not appreciated that as per the Sugar Cane (Regulation of Supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he delay in filing of the appeal, we condone the delay and admit the appeal for hearing. 3. During the course of hearing, the Ld. Counsel for the assessee has also moved an application for admission of new grounds that the receiving of the body are Government Grants for specific purposes, hence they cannot be considered as income u/s 2(24) of Income Tax Act (hereinafter called as an Act). Having carefully examined the original grounds raised bythe assessee and the new ground, we find that all the grounds relate to the sole controversy, whether the receipts received by the assessee from the Government either in the form of Grants from the Centre or State Government and contribution in the form of Commission being cess from sugar factories or cane growers societies is in the nature of income under section 2 (24) of the I.T. Act? We, therefore, adjudicate this issue having admitted the new ground also. 4. Brief facts of this case are that are that the assessee, the Cane Development Council was constituted by Cane Commissioner, under section 5 of U.P. Sugar Cane (Regulation of Supply and Purchase) Act 1953. The Assessee Council has been constituted to perform the functions as lai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r it, it would not partake the character of income u/s 2 (24) of the Act. Though, this argument was not raised by the assessee before the lower authorities and the assessee had been claiming deduction u/s 80P (2) of the Act or exemption u/s 11 of the Act, but the ground or argument raised before us is plausible and legal. Therefore, it require the proper adjudication. 10. In the aforesaid order of the Tribunal, it has been held that the grant in aid or any other receipt which were not product of normal business activity of the assessee, it could not be termed as revenue receipt, so as to form part of the total income. 11. In the case of ITO Vs Cane Development Council (supra), the similarissue was raised on similar facts and finding force in the contention of the assessee, the Tribunal has restored the matter to the Assessing Officer to examine the claim of the assessee in light of these submissions. The relevant portion of the order of the Tribunal is extracted as under :- 9. Considering the written submissions filed before the bench, it was seen that on behalf the assessee it has been canvassed that the assessee company has been established by an order dated 06.04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferring to the mandatory provision made under rule 49A, the entire amount of said commission, which is, in fact, just a contribution amount, is required to be utilized on specific purpose of construction of road etc. and other development activities are assigned to the appellant and not otherwise. It is further submitted that there is no provision under aforesaid Act/Rules made there under authorizing the appellant to utilized the said amount of said contribution paid in the name of commission for any purpose or to distribute it or any part of it to anybody as profit/income. It is also been submitted that in the present case the assessee has neither distributed the said contribution amount received in the name of commission to anybody not utilized it for any purpose other than that for which it has been paid to the appellant. It has also stated that there is no finding by any lower authorities that the assessee has utilized the commission amount for any purpose similarly the surplus not spend is fully covered be the order of the Delhi bench in N.S. Committee, Village Thanabhawan, Tehsil Shamil, Distt.- Muzaffarnagar order copy filed. 10. In the light of written submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these shall include but also such items which said section declares that these shall include but also such items as it signified according to its natural import. Since section 2(24) has not declared that such a grant-inaid shall be included in the income the word revenue shall be construed as comprehending what it signified according to its natural import. In relation to a business undertaking, the word revenue connotes incomings of the undertaking which are products of the normal working of the undertaking. The giving of financial aid or subsidy to the aforesaid committee, which admittedly is not carrying on any business, is at the discretion of the Government or Sugar Factors. Thus, the grant-in-aid in question was not a product of the normal business activities of the assessee committee, assessed by the AO as a local authority. Therefore, such a grant-in-aid could not be termed as a revenue receipt so as to form part of the total income. As already pointed out, the ld CIT(A) concluded that the aforesaid funds received by the assessee from State Government and Sugar factories have been spend only for those specific projects and there was no surplus with the assessee. Since t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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