2009 (3) TMI 900 - AT - Income Tax

Tribunal affirms tax appeal decision granting exemption for income under specific sections

The Tribunal upheld the Commissioner of Income-tax (Appeals)'s decision, dismissing the Revenue's appeal. It concluded that the assessee was entitled to ... - Issues involved: Delay in filing appeal by Revenue, Addition of unexplained credits u/s 68, Exemption under section 10(23C).Delay in filing appeal: The Revenue filed an appeal with a delay of seven days, which was condoned by the Tribunal after being satisfied with the reasons provided by the Revenue. The appeal was admitted for hearing despite the delay.Addition of unexplained credits u/s 68: During assessment, the Assessing Officer found unexplained credits in the assessee's accounts, which were added under section 68 of the Income-tax Act as the assessee failed to provide satisfactory explanations for these amounts.Exemption under section 10(23C): The Commissioner of Income-tax (Appeals) deleted the addition made by the Assessing Officer under section 68 after considering confirmation letters and a judicial decision. The Commissioner held that the assessee's income, subject to exemption under section 10(23C), would also cover unexplained credits. The Tribunal agreed with the Commissioner's decision, emphasizing that income under section 68 is eligible for exemption under section 10(23C) based on the interpretation of the law and judicial pronouncements.The Tribunal noted that the contention of the learned chartered accountant regarding the interpretation of section 10(23C) was legally sustainable for the assessment year in question. Referring to a judicial decision, the Tribunal highlighted that the term 'income' in section 10(23C) should not be narrowly construed and must be given its natural meaning, allowing the assessee to claim exemption for income deemed chargeable under section 68.Therefore, the Tribunal upheld the order of the Commissioner of Income-tax (Appeals) and dismissed the Revenue's appeal, concluding that the assessee was entitled to the benefit under section 10(23C) for the income covered under section 68.