TMI Blog2021 (7) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... ng afforded the opportunity to explain the maintainability of the appeal, the Revenue filed a note dated 30/10/2018 along with revised grounds of appeal but they stood by their Form 36 which was filed on 06/11/2019. In Column 7 of the said Form, the Revenue has clearly stated that the disputed addition is ₹ 174,20,35,742/- and not ₹ 200 crores as claimed in this ground (i). For the reasons as aforesaid, this ground of appeal is held to be not maintainable. Revenue without prejudice to one another seems to be an attempt to make fishing and roving explorations to bring to tax the compensation under several Sections of the Act. Having had two opportunities i.e., of the first second round of proceedings, the AO/Revenue is still not clear as to under which specific Section does it seek to tax the compensation received by the assessee. Revenue has raised several sections to tax such compensation inter alia including such provisions which was never the case of the AO as well. It appears that the Revenue wants an academic debate before this Tribunal and explore the possibility of taxing the compensation under each of the five specified heads of income. As held Revenue c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laying down the foundational facts, the Revenue cannot be permitted to re-urge taxability under Section 28 or Section 45 of the Act. Revenue's claim of taxing such receipt u/s. 17(3)/56(1) was neither their case in the original assessment order or the first round of appeal proceedings or in the second round before the ld. CIT(A). These grounds raised by AO/Revenue shows that they have not still made up their mind as to which section of the Act is attracted in the facts of this case and exposes the lack of application of mind. For the reasons as set out in Paras 11.2 to 11.4 above, these grounds raised by the Revenue being alien to the case of the AO is held to be not maintainable. Addition made in the original assessment order u/s. 56(2)(vii) ceased to exist consequent to the order passed by this Tribunal in the first round on 16/11/2018. Hence, there was no surviving addition in existence to the returned income of the assessee. No further appeal was preferred by the Revenue on this aspect and therefore this particular issue had crystallised and attained finality. Further even before the ld. CIT(A) in the second round, it was never the case of the AO that the second sit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed grounds of appeal. The assessee filed a rejoinder to the written reply of the Revenue on the same date i.e. 11/06/2021. The case was accordingly posted for hearing to decide the preliminary issue of the maintainability of the appeal and the grounds taken by the Revenue. 3.1. To address this preliminary issue, it would be first relevant to discuss the background facts of the case and the appellate orders in the first round of appellate proceedings, particularly the order passed by this Tribunal dated 16/11/2018. The author of this order was also the author and part of the Bench which passed the aforesaid order dated 16/11/2018. This discussion is necessitated due to the peculiar facts involved in the case and because both the parties have heavily quoted and relied on the earlier appellate orders, particularly the order dated 16/11/2018 in support of their contentions. The said order dated 16/11/2018 cannot however be read in isolation and the reasoning and conclusions drawn therein have to be understood in the context of the background facts and the arguments then placed before the Bench. 4. Facts in brief:- The assessee, a firm and Gillette USA were promoters of a compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (7.87% by Poddar Group and 0.90% by the P G) of the paid-up share capital held by them. The OFS would to the general public and through the stock exchange. This would reduce the shareholding of Poddar Group in the Company to 4.99%. ii. The SHA would be terminated and consequently the Articles of Association ( the Articles ) of the Company would be suitably amended, thereby the Poddar Group being classified as public shareholders. iii. The assessee would be entitled to receive a severance compensation of ₹ 200 crores which would be paid by P G Netherlands. This amount is over and above the amounts received by the shareholders for the sale of shares. In order to give effect to the terms of proposal accepted by SEBI, the Assessee entered into Severance Agreement dated 3 Is' October, 2013 and Termination Agreement dated 11th November, 2013 (Pg. 59-63 of Annexure to AO's order). The assessee claimed the receipt of such compensation of ₹ 200 crores from P G Netherlands to be in the nature of capital receipt not exigible to tax. Assessment Order dated 30/12/2016 5. In the course of assessment, the assessee was required to submit details along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diversion of income to assessee by other Group Members. TO that extent the income becomes taxable us 56(2)(vii) as money received without consideration where rights of all members of the shareholders get terminated but Compensation is received only by the individual representing the Group. However the entire compensation is not to be taxed under section 56 and the shareholders who are individuals and relatives of the assessee to that extent will not be taxable in the hands of the assessee under Section 56. Thus the total compensation is apportioned in ratio of the shares held by all members of the assessee group as below: Who held by % transfer Amount Whether Taxable Assessee 0.69 ₹ 10,72,26,107/- No Not taxable as per the above discussion Family Members of Assessee 0.97 ₹ 15,07,38,150/- No Not taxable as per the above discussion and exempt as received from relatives Group Ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is found to hold true. The AO at Para 123 of the order observed that, his discussions from Para 72 onwards would stand only if the facts showed that the assessee was the sole beneficial owner of the said compensation and that he exercised substantial management rights. He however reiterated that at Para 123 of the assessment order, that it was clear from the record, that the case of the assessee fell under first situation and that only the compensation received by him by way of gift from group entities was taxable u/s. 56(2)(vii) of the Act in terms of his discussions set out Para 42 43 of the order. The relevant extracts from Para 123 124 of the order are as follows: 123. Tax Treatment-The taxability of assessee's income on account of receipts of payment of ₹ 200 crs, which has already been mentioned in Para 71, earlier, is being once again underscored at the cost of repetition from which it is clear having regard to the facts of the case discussed in detail not that such taxability may involve two situations which are given below: 1. The entire compensation is not receivable by the Assessee and there has been an gift or dividend from the Assessee's gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case at hand, the AO in conclusion, held the proportionate compensation accruing to the assessee in his individual capacity was not taxable and it was only that portion of the compensation due to the group entities which was received by the assessee without consideration, that was taxed as 'gift'/'dividend' in terms of Section 56(2)(vii) of the Act. CIT(A) Order dated 10/07/2017 6. Aggrieved by the order of the AO, the assessee preferred an appeal before the Ld. CIT(A) who by his order dated 10/07/2017 confirmed the action of the AO and dismissed the appeal of the assessee. First Round ITAT Order dated 16/11/2018 7. Being aggrieved by the order of Ld. CIT(A), the assessee filed an appeal before this Tribunal. The grounds of appeal raised among others, challenged the addition made u/s. 56(2)(vii) of the Act. The ld. senior counsel, Shri J.D. Mistry, who appeared on behalf of the assessee, submitted that the case of the AO was under the first situation i.e. Section 56(2)(vii) of the Act, wherein he held that out of the total sum of ₹ 200 crores, the compensation to the extent of ₹ 174,20,35,742/- was taxable by way of income and that the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further enquiries if required and remitted the matter back to the file of the ld. CIT(A), who enjoys co-terminus powers as that of the Assessing Officer. 7.1. This Tribunal accordingly set aside this issue to the file of the ld. CIT(A). The relevant final findings of the Tribunal are as follows: 38. As the ld. CIT(A), as passed a cryptic order, we set aside this issue to the file ld. CIT(A), for fresh adjudication, in accordance with law after giving the assessee adequate opportunity of being heard. While doing so, the ld. CIT(A) may, if he thinks fit or necessary call for a remand report, so as to bring all the facts of the issue on record. The ld. CIT(A) shall, adjudicate the matter de-novo, in accordance with law, uninfluenced by the observations and statements made by us in this order. 7.2. Therefore, on a holistic reading of the order, it is apparent that the original case (first situation) of the AO u/s. 56(2)(vii) of the Act, had been conceded by the Revenue and not pressed before this Tribunal. The addition under this Section 56(2)(vii) of the Act, does not survive. Therefore, the limited issue set aside to the ld. CIT(A) de novo was to examine whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee is not acceptable. Had there been no sale of shares by the other entities, there would have been no question of making payment of ₹ 200 crores to the assessee. The payment of ₹ 200 crores has direct connection with sale of shares by the group entities. Consequently, the amount is relatable to shareholding of the group entities. In this regard, detailed discussion has been made in the assessment order which may kindly be perused. In the matter of production of copies of all documents of negotiations between the assessee, members of the Poddar Group as well as P G Group, assessee has stated that there were various discussions/deliberations orally or otherwise in addition to documents already submitted in assessment proceedings which form part of Annexure to the assessment order. Apart from these, the assessee could file a copy of letter dated September 30, 2017 from GIllete India Ltd. which is attached with the letter dated 25.01.2019. The assessee furnished with its letter dtd. 29-01-2019 copy of email correspondence as stated earlier. These correspondences do not throw any light as to why the entire compensation of ₹ 200 crores was paid to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 45 of the Act. Thereafter, the Ld. CIT(A) also considered the case made out by the AO in his remand report i.e., taxability u/s. 56(2)(vii) of the Act and held that when the Revenue had already conceded this ground before the Tribunal, the same could not be again agitated by the AO. The relevant findings of the Ld. CIT(A) are as under: In the course of appeal before the Hon'ble Tribunal, the Departmental Representative has not pressed or denied to press his arguments in support of conclusions of AO, except 28(iia) and 45 r.w.s. 55(2)(a). Thus, the Department Representative conceded that receipt in question cannot be taxes u/s. 56(2) or 56(2)(vii). The relevant extracts of the same is as under: The ld. Special Counsel submitted that he would not be pressing the argument that, the amount in question can be brought to tax u/s. 56(2) of the Act. As per Mr. Girish Dave, the amount cannot be brought to tax u/s. 56(2)(vii) of the Act as done by the AO. He submitted that his arguments in this case would be that the receipt in question is taxable u/s. 28(ii)(a) of the Act and also on the ground that, the receipt in question is taxable as capital gains u/s. 45 of Act in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issue in favour of the assessee. He submitted that this order of the ITAT has attained finality as the revenue has not gone in appeal before the Hon'ble Calcutta High Court, nor has sought any rectification of mistake apparent on record u/s. 254(2) of the Act. Thus, the income assessed and computed by the Assessing Officer in the impugned assessment order dt. 30/12/2016, consequent to the order of the ITAT dt 16/11/2018, remains the same as the amount of income returned by the assessee. 9.1. He further submitted that the ld. CIT(A), who had co-terminus powers with that of the Assessing Officer came to a conclusion that the receipt in question cannot be brought to tax, either u/s. 28(ii)(a) of the Act or u/s. 45 r.w.s. 55(2)(a) of the Act. No addition was made to returned income under these sections nor was a demand raised by the department. He argues that no addition to the returned income survives for adjudication by the Tribunal. He reiterated that the ground on which the addition was made was u/s. 56(2)(vii) of the Act and the computation of income and the corresponding demand u/s. 156 of the Act was raised, stood nullified by the order of the Tribunal dt. 16/11/2018, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e an addition, then it was for the ld. CIT(A) to specify the section which is attracted to bring the amount to tax by using his co-terminus power. The Assessing Officer in the remand report was not specific as to which of these different sections and heads of income, the addition in question was sought to be made so as to compute the income of the assessee and raise additional demand. He argued that by not doing so the revenue could not have filed this appeal, as no income is assessed either the income u/s. 28(ii)(a) or Section 45 of the Act and as the sole addition made u/s. 56 (2)(vii) of the Act does not survive. The department in essence, is now seeking to re-agitate the very same substantive ground of addition i.e., 56(2)(vii) of the Act, which the department had voluntarily and consciously withdrawn, which is not permissible. 9.4. Thereafter, the ld. Counsel for the assessee relied upon certain case-law on the principles of 'doctrine of waiver'. The ld. Counsel for the assessee summarised his arguments by submitting that the present departmental appeal and Form 36 are not maintainable since no addition has been made by the Assessing Officer or for the matter delete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uninfluenced by the observations and statements made by the ITAT in its order dt. 16/11/2018 and hence being bound by the submissions of the special counsel does not arise. He pointed out that the ld. CIT(A), in the second round of appellate proceedings, in its order dt. 01/08/2019, called for a remand report and the Assessing Officer has reiterated the assessment order before him and has also submitted a copy of the submissions made by the revenue in its written arguments before the bench of the ITAT in the first round of appellate proceedings. He argued that the jurisdiction of the ITAT was to decide the taxability of the entire severance compensation taking into account the facts and the provisions of the Act. 10.3. The ld. CIT D/R submitted that, the department has never waived its right to contest the taxability of the compensation u/s. 56(2)(vii) of the Act. He submits that the averments of the special counsel before the Tribunal were his personal/private views and not the views of the Department. He further argues that there was no direction given by the department to the Special counsel, not to press this argument of taxability of the receipt u/s. 56(2)(vii) of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not lie on protective additions is erroneous and is legally incorrect. He submitted that when the same income is assessed in the hands of two or more assessees, then it would be a protective addition in one hand and substantive in another and that this is not the case here. He referred to the order of the ld. CIT(A) in the second round of proceedings dt. 01/08/2019 and submitted that the ld. CIT(A) has considered all these arguments of the Assessing Officer in his order on addition u/s. 28(ii)(a) and u/s. 45 of the Act as well as u/s. 56(2)(vii) of the Act and decided the issue against the revenue and hence the revenue has the right to appeal. 10.6. The ld. CIT D/R reiterated his submissions that when the Tribunal has set aside the matter to the file of the ld. CIT(A) for de novo consideration, the concession of the Special counsel on the applicability of Section 56(2)(vii) also goes and the ld. CIT(A) is duty bound to examine the issue of taxability u/s. 56(2)(vii) on merits, which he did. He referred to Section 251 of the Act and argued that the ld. CIT(A) has vast powers to consider any issue and grounds which were not raised before him and also to enhance the assessment. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be stated as his private view or personal view. He argued that the order of the Tribunal has become final as the department has not carried the matter before the High Court nor has filed a miscellaneous application. He submitted that a plain reading of the order of the ITAT shows that the addition made u/s. 56(2)(vii) of the Act was struck down as mutually agreed by the counsels. He submitted that, the appeals scrutiny report of the department is an internal document, which has no bearing on the case. He contended that the scope and ambit of maintainability of the appeal is now settled in law. He relied on certain case law and argued that the department cannot approbate or reprobate by choosing to agree consciously that Section 56(2)(vii) of the Act, is not applicable to the case and accepting the order of the ITAT on the issue at the first instance and later trying to reverse its stand by invoking this section once again. He submitted that, the ITAT had set aside the two alternative protective grounds i.e., Section 28(ii)(a) and Section 45 of the Act for fresh adjudication by the ld. CIT(A). He submitted that even in the assessment proceedings the Assessing Officer chose not to c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of the legal position as to whether the Tribunal has power to enhance the assessment and take back the benefit granted to the Assessee by the Assessing Officer. This question is no longer res integra and has been answered by the Supreme Court in MCORP Global (P.) Ltd. v. CIT [2009] 178 Taxman 347/309 ITR 434. It was held that the Tribunal was not authorized to take back the benefit granted to the Assessee by the Assessing Officer and the Tribunal has no power to enhance the assessment. The Hon'ble Supreme Court referred to an earlier decision in the case of Hukumchand Mills Ltd. v. CIT [1967] 63 ITR 232. The operative portion of the judgment reads as follows: 6. In the case of Hukumchand Mills Ltd. v. CIT [1967] 63 ITR 232 (SC) this Court has held that under s. 33(4) of the IT Act, 1922 [equivalent to s. 254(1) of the 1961 Act]. The Tribunal was not authorized to take back the benefit granted to the assessee by the AO. The Tribunal has no power to enhance the assessment. Applying the ratio of the said judgment to the present case, we are of the view that in this case, the AO had granted depreciation in respect of 42,000 bottles out of the total number of bottles (5,46, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otu action by the AO under Sections 147 or 154 of the Act, lies only with the CIT under Section 263 of the Act and such powers cannot be usurped by the Departmental Representative (in short DR ) appearing on behalf of the Revenue, while arguing the appeal before this Tribunal. It is impermissible for the DR to come out with a submission contrary to the finding of the AO, as he had no jurisdiction to go beyond the order passed by the AO. The scope of arguments of the DR has to be restricted to support the view taken by the AO. He can strengthen the view taken by the AO from any angle he likes, but he cannot bring out an altogether different case de hors the view of the AO. The scope of arguments has to be confined to supporting or defending the impugned assessment order and the DR cannot set up an altogether different case than what was made out by the AO, as it would mean that the DR was stepping into the shoes of the CIT exercising jurisdiction under Section 263 of the Act. The arguments which the Revenue can put forth before us is indeed unlimited but the same has to be within the boundary limits marked by the AO. Useful reference in this regard may be made to the following obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defend the order of the Assessing Officer while arguing the appeal filed by the Revenue. He is fully competent and free to support the reasoning of the Assessing Officer from any other angle so as to put forward a strong case of the Revenue. There is a marked distinction between supporting order of the AO/TPO by the Departmental Representative on one hand and finding flaws in the order of the AO/TPO in an attempt to show that the AO/TPO failed to do what was required to be done by him. In our considered opinion if the Departmental Representative is allowed to fill in the gaps left by the AO/TPO it would amount to conferring the jurisdiction of the CIT u/s. 263 to the Departmental Representative, which is not permitted by the statute. Let us take another situation. Suppose a particular deduction is permissible on the cumulative satisfaction of three conditions. The AO examines the case and finds the very first condition as lacking. Without examining the fulfillment or otherwise of the other two conditions, he rejects the claim. In that case if such first requirement is subsequently found to be fulfilled in the appellate proceedings, the Departmental Representative can very well poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the preceding paragraphs. 13. Before that, it would first be relevant to recall the basic fundamental principle of taxing a receipt as income under the Act. It is well settled in law that, all receipts are not income and when a receipt is sought to be taxed as income of the assessee, the burden to prove that it falls within the ken of taxing provisions is on the AO/department; and if the AO succeeds to bring the receipt in question in the teeth of charging provision of tax, then the onus shifts on the assessee to demonstrate that the receipt is not taxable being exempt. The Hon'ble Supreme Court in the case of Parimisetti Seetharamamma vs. CIT reported in 1965 AIR 1905, held as follows:- In so observing, the High Court, in our judgment, has committed an error of law. By sections 3 and 4 the Act imposes a general liability to tax upon all income. But the Act does not provide that whatever is received by a person must be regarded as income liable to tax. In all cases in which a receipt is sought to be taxed as income, the burden lies upon the department to prove that it is within the taxing provision. Where however a receipt is of the nature of income, the burden of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sum of ₹ 10,72,26,107/- due to the assessee in the proportion of the shareholding of the entire Group was not taxable in his hands. He also held that, the shareholders-individuals had gifted their respective right to receive their proportionate compensation aggregating to ₹ 15,07,38,150/- to the assessee and such gift was also not taxable since all of them were the 'relatives' of the assessee and hence it fell within the exception set out in Section 56(2)(vii) of the Act. It was only in relation to the proportionate sum of ₹ 174,20,35,742/-, which according to AO, was due to the group entities but they diverted their income to the assessee that was taxed by the AO as monies received without consideration u/s. 56(2)(vii) in the hands of the assessee. It is therefore abundantly clear that the AO had not taxed the assessee's own share in compensation and all the respective shares of his relatives which were received by him. Applying the ratio decidendi laid down in the decisions of the Hon'ble Apex Court in the cases of Mcorp Global (P.) Ltd. v. CIT (supra) and Hukumchand Mills Ltd. v. CIT (supra), such benefit granted by the AO to the assessee in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 16/11/2018. The grounds of the assessee against the addition u/s. 56(2)(vii) of the Act, were allowed and this has attained finality. Thus, when the AO himself failed to bring on record/remand report, facts necessary to tax this receipt of compensation as income either u/s. 28 or Section 45 of the Act as propounded by him [second situation as contemplated in his assessment order(supra) and for which the matter was remitted by this Tribunal to the Ld. CIT(A)], the Revenue cannot now be permitted again to rake up this issue in their grounds of appeal when the same was neither the case made out in original assessment order or for that matter in the remand report furnished before the ld. CIT(A) in the second round. A third innings cannot be granted to the revenue. 14. We now consider the specific revised grounds of appeal raised by the Revenue which read as under: (i) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in holding that the amount of compensation of ₹ 200 crores received by the assessee is not taxable under the Income Tax Act. (ii) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be entertained at this stage before us. Moreover, this ground also contradicts the Form No. 36 filed by the Revenue. Upon being afforded the opportunity to explain the maintainability of the appeal, the Revenue filed a note dated 30/10/2018 along with revised grounds of appeal but they stood by their Form 36 which was filed on 06/11/2019. In Column 7 of the said Form, the Revenue has clearly stated that the disputed addition is ₹ 174,20,35,742/- and not ₹ 200 crores as claimed in this ground (i). For the reasons as aforesaid, this ground of appeal is held to be not maintainable. 15. The subsequent ground Nos. (ii) to (vii) taken by the Revenue without prejudice to one another seems to be an attempt to make fishing and roving explorations to bring to tax the compensation under several Sections of the Act. Having had two opportunities i.e., of the first second round of proceedings, the AO/Revenue is still not clear as to under which specific Section does it seek to tax the compensation received by the assessee. The Revenue has raised several sections to tax such compensation inter alia including such provisions which was never the case of the AO as well. It appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x, the receipt u/s. 56(2)(vii) also goes. Hence, the pith and substance that one can draw from this event, that consequent to the order dated 16/11/2018 passed by this Tribunal in the first round of appeal proceedings, against which no appeal was preferred by the Revenue, there is no addition in existence u/s. 56(2)(vii) of the Act of ₹ 174.20 crores in the hands of the assessee for the relevant AY 2014-15. 15.3. Hence, as rightly held by the ld. CIT(A), since the Revenue had conceded this ground before this Tribunal, the AO could not have agitated this issue again in the remand proceedings and that the stand on this issue had become final. Estoppel indeed applies on these facts. For the reasons aforesaid, we agree with the contention of the ld. AR of the assessee that ground (ii) taken by the Revenue seeking to tax the compensation u/s. 56(2)(vii) is unsustainable in law and hence is not being entertained. 16. Now coming to ground No. (iii) (iv) of the appeal, at the cost of repetition, it is imperative to again mention that the taxability of compensation u/s. 28(iia) or 45 of the Act were the possible scenarios highlighted by the AO in the original assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to tax this amount u/s. 28(iia) or Section 45 of the Act is nothing but creating a smokescreen for getting a third innings, which clearly cannot be granted to them. 16.1. It is elementary that any legal proposition is required to be tested after establishing the foundational facts of a case. As discussed earlier, the Revenue can only support the order of the AO before us. The Revenue can strengthen their case on the issue raised in the assessment order but the Revenue cannot be permitted to make out an altogether new case before us de hors the findings of the AO in his assessment order or for that matter the remand report. As held earlier, this Tribunal does not have the power to deal with an issue raised by the Revenue, which was never the case of the AO in the assessment order or in the remand-report as discussed (supra). 16.2. Useful reference in this regard may be made to the decision of a Division Bench of the Bombay High Court in the case of CIT Vs. Kanga Co. [IT Appeal No. 2277 of 2013 dated 1-2-2016] wherein the Court observed that, it was unable to understand how an additional question of law could arise from the impugned order of the Income Tax Appellate Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or the first round of appeal proceedings or in the second round before the ld. CIT(A). These grounds raised by AO/Revenue shows that they have not still made up their mind as to which section of the Act is attracted in the facts of this case and exposes the lack of application of mind. For the reasons as set out in Paras 11.2 to 11.4 above, these grounds raised by the Revenue being alien to the case of the AO is held to be not maintainable. 18. In ground No. (vi), the Revenue has reiterated the first situation of the assessment order that, the receipt of compensation by the assessee was diversion of income by the group entities and therefore taxable in light of the decision of Hon'ble Supreme Court in the case of Motilal Chhadami Lai Jain vs. CIT reported in '1991 SCR(2) 237. As already held earlier, the Revenue had conceded the first situation i.e. taxability of compensation u/s. 56(2)(vii) of the Act before us in the first round of appeal and therefore it would now operate as estoppel against the Revenue to again agitate the same which was categorically given up in the first round of appeal proceedings. Hence this ground is also found to be not maintainable. 19. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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