TaxTMI 
TaxTMI 
2016 (10) TMI 523
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....n and are decided by this common order. 2. The brief facts of the case as emanating from the records are : The assessee is a Cooperative Society set up for treatment of industrial effluents generated by its members engaged in manufacturing and other industrial processes. The assessee filed its return of income for the assessment year 2004-05 on 27-10-2004 declaring NIL income after claiming deduction u/s.80IA of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). 3. The case of the assessee was selected for scrutiny and assessment order u/s.143(3) was passed by the AO on 31-05-2006 accepting the claim of deduction u/s.80IA and admitting NIL income returned by the assessee. Thereafter, the provisions of section 263 were in....
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....e assessee by following the decision of Hon'ble Bombay High Court in the case of CIT Vs. Common Effluent Treatment Plant (Thane-Belapur) Association reported as 328 ITR 362 (Bom.) 7. Against the order of CIT(A) now the Department is in appeal before the Tribunal. 8. Sri P.L. Kureel representing the Department vehemently submitted that the AO had rejected the claim of the assessee in claiming deduction u/s.80IA primarily on the ground that the assessee is receiving contribution from Central/State Governments in the form of subsidy. Since the assessee is receiving contribution of funds from non members, the principle of mutuality will not apply. The Ld. Departmental Representative contended that as the funds of the assessee are not excl....
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....ed in the appeals/additional grounds are not arising from the assessment proceedings. The Ld. Authorised Representative asserted that the revenue in the grounds of appeal/additional grounds has wrongly alleged that the assessee has received drainage and treatment charges during the A.Yrs. 2004-05, 2005-06, 2006-07 & 2007-08 from Dombivili, MIDC which is not a member of the society. The Authorised Representative of the assessee stated at the Bar that no amount has been received by the assessee from Dombivili MIDC for treatment of any effluent. Dombivili, MIDC is not a member. No effluent is generated by the MIDC. Dombivili, MIDC is providing water supply to the assessee to be used in the treatment of effluents. The Authorised Representative ....
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.... heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. The grounds raised by the Department assailing the order of CIT(A) are as under : "1. On the facts and in the circumstances of the case, and in law, the Ld.CIT(A)-I, Thane has erred in holding that the principles of mutuality applies in the case of the assessee relying on the order of ACIT, Panvel for the A.Y. 2005-06 which was based on misrepresentation of facts by the assessee that it did not receive any receipt from other than members of the society, whereas the fact was that the assessee received drainage & treatment charges of Rs. 75,51,473/-, Rs. 78,58,545/-, Rs. 82,73,119/- & Rs. 98,93,887/- during A.Y's 20....
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.... raised by the Department during assessment proceedings or before first appellate authority. Even otherwise what has been urged before the Tribunal on behalf of Revenue is a factual issue which is not borne out from the records. 11. We find merit in the submission of the Ld. Authorised Representative that fresh grounds of appeal can be raised before the Tribunal only if it is a question of law arising from the facts which are on record in the assessment proceedings. The Hon'ble Apex Court in the case of NTPC Vs. CIT (Supra) has held that the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the income-tax authority and have bearing on the taxability of the assessee. However, in the instant cas....
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....g the principle which has been enunciated by the Supreme Court, there can be no manner of doubt that the surplus generated by the assessee representing the excess of its income over expenditure would fall within the purview of the doctrine of mutuality. For the purposes of the first issue, it must be noted that this income is exclusive of interest which is earned on fixed and other deposits and on refund of income-tax which would be dealt with separately. The income of the assessee is contributed by its members. The assessee has been formed specifically with the object of providing a common effluent facility to its members. The income is not generated out of dealings with any third party. The entire contribution originates in its members an....