TMI Blog2023 (5) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... stand of the assessee. Similarly CIT(A) also had accepted the stand of the assessee for the A.Y. 2015-16 and 2016-17 on identical facts and circumstances, which had attained finality as no appeals were preferred by the revenue before us for those years. We hold the assessee to be a local authority and its receipts are not chargeable to tax in the facts and circumstances of the instant case. Accordingly, the grounds raised by the assessee are allowed. - ITA No. 4356/Del/2019 - - - Dated:- 3-5-2023 - SHRI C. M GARG , JUDICIAL MEMBER And SHRI M. BALAGANESH , ACCOUNTANT MEMBER For the Assessee : Shri. Ankit Gupta , Adv For the Revenue : Ms. Maimun Alam , Sr. DR ORDER PER M. BALAGANESH ( A. M ) : This appeal in IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of Interest received from Bank, which is highly arbitrary, unjust and against the facts and circumstances of the case. The Ld.CIT (A) has also confirmed the same. 5. That, the assessing officer and CIT (A) has failed to appreciate before confirming the addition of Rs.82,87,845.00, that, the said amount is not come under the preview of definition of INCOME U/s 2(24) of the Income Tax Act, 1961 as the assessee appellant is the statutory body of the State Government, for performing the specific work for the development of Cane Agriculture, in the specified area. 6. Without prejudice to the above, in case if it is held, that, the commission and interest received is to be treated as income than the assessee is eligible fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, wherein assessee cannot be treated as a Local Authority . The assessee submitted its reply vide letter dated 06.09.2016 stating that it was formed before the amendment was effected in section 10(20) of the Act with effect from 01.04.2003. The assessee objected to the action of the ld. AO in treating it as Artificial Juridical Person . The ld. AO observed that as per the explanation inserted by the Finance Act 2002 which came into force with effect from 01.04.2003 in section 10(20) of the Act, the local authority will be any of the following four:- i) Panchayat ii) Municipality iii) Municipal committee and District Board iv) Cantonment Board The ld. AO observed that other than these four, no other institut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar mills and that the said monies received were completely at the disposal of the assessee. Hence according to ld. AO, the commission income so received becomes income of the assessee. The interest income earned by the assessee were out of deployment of the aforesaid commission income in banks. Hence both would partake the character of revenue receipt in the hands of the assessee and accordingly chargeable to tax. This action of the ld. AO was upheld by the ld. CIT(A). 4. The ld. AR before us submitted that the very same issue was subject matter of consideration by the Hon ble Allahabad High Court (Jurisdictional High Court) in the case of CIT vs. M/s. N.S Committee in ITA No. 759 of 2012 dated 16.01.2018. For the sake of convenience, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 11 of the I.T. Act, 1961. Both the CIT as well as the Tribunal after examining the matter have come to the conclusion that money advanced by the State Government to the assessee Cane Cooperative Society were in the nature of grant in aid for construction of roads and the sum which was given by the State Government and the funding given by State Government for grant in aid was used for that very purpose. No surpluses were created. The Tribunal after examining the matter has come to the conclusion that the provisions of Section 2(24) of the Act would not cover such grant in aid to be included as an income for reasons that it cannot be naturally imputed that the activity of the construction of roads was any part of the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... framed u/s. 143(3) of the Act 14.11.2019, treating the assessee as a local authority . Further ld. CIT(A) in Assessment year 2015-16 had granted relief to the assessee treating the assessee as a local authority , against which no appeal has been preferred by the revenue before this Tribunal. Similarly the ld. CIT(A) had granted relief to the assessee in A.Y. 2016-17 by following decision of Hon ble Jurisdictional High Court referred to supra. 7. Per contra, the Ld. DR vehemently relied on the orders of the lower authorities. 8. From the perusal of the order of the Hon ble Jurisdictional High Court reproduced supra, we hold that the issue in dispute stands squarely covered by the said decision. Moreover the impugned disputes have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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