TMI Blog2016 (11) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... is perfectly justified in holding that no capital gains arose in Assessment Year 2004-05. Thus, we sustain the order of the Ld. CIT(A). - I.TA No.356/Mum/2014, I.TA No.1335/Mum/2014 - - - Dated:- 28-9-2016 - SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER For The Assessee : Shri N.R. Agrawal For The Revenue : Shri Manjunatha Swamy, Shri N. Sathya Moorthy ORDER PER C.N. PRASAD, JM: These two appeals are filed by the assessee and the Revenue against the orders of the Ld. CIT(A)-37, Mumbai dated 20.12.2013 pertaining to assessment year 2004-05. 2. The assessee has raised following grounds in its appeal: 1. The Ld. CIT(A) erred in confirming the addition made by the Learned ACIT by treating contribution/donations received by the assessee of ₹ 3,65,589/- for Professional/business income. 2. The Ld. CIT(A) erred in not following Mutuality Concept for contribution/donation received by the assessee of ₹ 3,65,589/- 3. The Ld. CIT(A) erred in disallowing compensation aid/expenses paid by the appellant of ₹ 89,80,000/- for Assessment Year 2005-06. 4. The Ld. CIT(A) erred in confirming the interest u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation was gathered by the department as a result of search seizure action in the case of the assessee. Once there is no document either seized or found and even no statement was recorded during the search proceedings then the addition maded by the Assessing Officer is based on existing record and material. The department has not disputed that that the assessee is eligible for exemption u/s. 10(24) of the Act as a registered Trade Union. The dispute is only with respect to the contribution from the employers/corporate entities on account of settlement of the disputes between the workers and employers through assesses's union. It is one of the objects of the assessee as per the constitution of the assessee union to seek redressal of grievances of the members and to secure the settlement of disputes between the employers and the employees by negotiation and by mutual consultation. Therefore, the negotiation on behalf of the workers and to arrive at a settlement in the interest and welfareof the workers as well as for the employers to avoid any stand off between the employers and workers, the assessee play a vital role. The contribution received by the assessee is only in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y performed by the assessee, are refunded to the members as bonus then the said consideration received on account of settlement cannot be treated as business income earned by the assessee. An identical issue was considered by the Indore Benches of this Tribunal in the case of Asstt. Commissioner of Income Tax Vs. Coordination Committee of SPM Unions Hoshangabad (supra), in para 20 and 21 as under:- 20. From the record we find that 15% of incentive bonus payable to workers was contributed by them to the association. This amount was deposited with the association to meet all sorts of expenditure including lawyers' fee, TA/DA, typing, stenographic charges, court fee and all other incidental expenses. The balance out of such contribution was to be refunded to the deserving employees. From record we find that substantial amount received from the employees was refunded to them in the years 1999 and 2000 after meeting the expenditure. Thus, the amount received from the workers for meeting such expenditure was not in the nature of income in the hands of the assessee being a coordination committee but was merely in the nature of deposit which was meant for meeting expenditure for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputes were settled through the assessee and the contribution was made as per the settlement agreement between the parties. Therefore, the assessee has produced the relevant evidence in support of its claim that this is a voluntary contribution. Once the CIT(A) has accepted the contribution of the workers as exempt from tax u/s 10(24). Similarly the contribution made on account of the same service/activity of the assessee by the counter party being employer in pursuant to the settlement/resolution of disputes, is also exempt u/s 10(24) of the Income Tax Act. As per section 27(2) of the Trade Union Act 1926, even the rule of trade unions do not provide for distribution of funds of the trade unions on dissolution, the registrar shall divide the funds amongst the members in such manner as may be prescribed, therefore, in any case the funds available with the assessee shall be distributed among the members either as per the rules of union or as per the provisions of section 27(2) of the Trade Union Act 1926. In view of the above discussion, we are of the view that the contribution received by the assessee in pursuant to its activity which are in accordance with the objects of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 2,23,42,132/- was received on account of 'profit on sale of Poiser Property' and this was not offered to tax. The case was reopened on the above ground and order u/s. 143(3) r.w.s. 147 was passed on a total income of ₹ 1,06,65,840/- on 13/12/2007. The gains on sale of Poiser property not offered by assessee was taxed in the assessment order. The AO held that the assessee had not offered the income earlier to avoid taxes and also invoked section 68 of IT Act to make the addition. The Assessing Officer taxed capital gains of ₹ 2,23,42,132/- against loss as per Income expenditure account of ₹ 1,16,76,294/- and assessed taxable income at ₹ 1,06,65,840/-. 10.1. Being aggrieved the assessee filed appeal before CIT(A) and the CIT(A) by order dated 19/02/08 enhanced the total income to ₹ 2,23,42,132/- by treating the resultant income under the head capital gain(LTCG), thereby negating the set off of business loss of ₹ 1,16,76,294/-. In doing so the Ld. CIT(A)held that since the appellant had not offered this income earlier and credited the same in books only in AY 2004-05, led to inference that sale was not completed earlier. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se prior to the Assessment Year 2004-05 and therefore not liable to tax in the Assessment Year 2004-05 observing as under: 5.1. I have given my careful consideration to the rival submissions, perused the material on record and duly considered the factual matrix of the case as also the applicable legal position. 5.2. Before me it is argued that the Ld. Assessing Officer has passed the order simply relying on earlier CIT(A)'s order and that the AO did not follow the directions of the Hon'ble ITAT at all. A paper book has also been filed numbering pages 1 to 173 which enclosed the copies of various documents and case laws. It is the contention of the appellant that possession of the property was handed over on 18/09/94 and hence transfer took place on 18/09/94 u/s. 2(47) clause (v). It is submitted that the appellant had received full payments and it executed irrevocable Power of Attorney in favour of the builder and hence transfer has taken place in 1995-96 or 1996-97. 5.3. The fact remains that the appellant did not reflect profit on sale of property at Poiser at ₹ 2,23,42,132/- in any of the earlier assessment years including assessment year 1995-96 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly the matter was restored to assessing officer for verification. 5.6. The assessing officer in his order giving effect to ITAT order has merely stated that: Accordingly the case was fixed for hearing and Shri N R Agarwal , FCA AR vide his forwarding letter dated 24/12/2010 submitted details in connection with the proceedings. He has submitted Municipal Corporation of Greater Bombay's order for Dereservation dated 10/06/1996, ULC order dated 17/02/1997 17/10/1996 from Add. Collector, Commencement Certificate for construction of building from BMC dated 20/01/1998, Solicitor's certificate dated 04/08/2007 certifying that land is transferred in 1995/96 u/s 53A of Transfer of Properties Act, Bank Certificate for payments received from Developer Power of Attorney in favour of builder. Thereafter, the entire portion from the earlier CIT(A) order, which was the subject matter of appeal before ITAT, has been extracted without answering the questions raised by Hon'ble ITAT and determining when transfer took place. 5.7. In the appellate proceedings, details by way of paper book pages 1 to 173 has been filed dated 6-9-2011. It is submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r ULC, granting NOC with reference to the condition imposed by BMC in its permission dated 10-6-1996. It was noted that one of the conditions under which development is permitted, is that 25% of constructed area will be handed over to BMC for Municipal Godown. iii) Commencement Certificate permission dated 20-1-1998 from BMC iv) Order dated 17-2-1997 of Collector, Bombay under ULC, granting NOC for receiving TDR on part of land under DP reservations for Park and DP Road. v) Possession letter for the land in question dated 18/9/1994 from appellant to Dattani Group in respect of the Development agreement of appellant with Dattani group. vi) Copy of bank statement showing the receipt of payments by the appellant. 5.11. From these documents, it is inferred that the permission to develop the lands arose in 1996-97 when permissions from ULC and BMC were received. Consideration was received and possession was handed over. Thus, to conclude, as directed by ITAT in this case, the title could have been transferred with ULC approval in FY 1996-97 relevant to Assessment Year 1997-98. 5.12. It is also the argument of the appellant that u/s. 2(47) clause (v), ..... X X X X Extracts X X X X X X X X Extracts X X X X
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