Assessment cannot await a civil suit where relief spending is unproven and receipts remain taxable.

Assessment proceedings need not be kept in abeyance merely because a civil suit is pending, where the two operate on different planes and neither controls the other. The assessee's claim that receipts diverted through its accounts were spent on flood relief failed because no material was produced before the Assessing Officer to prove the purchases or expenditure. A further plea based on Section 50 of the Disaster Management Act, 2005 also failed, as no utilisation certificate was produced and there was no contractual privity with the State or Corporation for such certification. The receipts were therefore treated as taxable in the assessee's hands.

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Issues: Whether the assessment for assessment year 2005-06 had to be kept in abeyance until disposal of the civil suit claimed by the assessee, and whether the assessee could avoid assessment on the ground that the amounts received had been spent on flood relief.

Analysis: The assessment was founded on monies diverted through accounts operated by the assessee. The assessee admitted that the receipts were used for supplying relief material, but no material was produced before the Assessing Officer to substantiate the purchases or the expenditure claimed. The Court held that the assessment proceedings could not be postponed pending the civil suit because the assessment and the suit operated on different planes and neither would control the other. A contention based on Section 50 of the Disaster Management Act, 2005 also failed because no utilization certificate was produced and the assessee had no contractual privity with the State or the Corporation for such certification.

Conclusion: The assessment did not have to await disposal of the suit, and in the absence of proof of purchases or expenditure, the receipt remained taxable in the hands of the assessee. The appeal was rejected.

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