TaxTMI 
TaxTMI 
2016 (11) TMI 1058
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.... interest u/s. 234B(3) of the Act." 3. At the outset, the Ld. Counsel for the assessee submits that all the three grounds are decided by the Tribunal in its own case for the Assessment Years 2003-04 to 2010-11 and the appeal for this Assessment Year remains to be adjudicated though it pertains to the block assessment order passed u/s. 143(3) r.w. Sec. 153A of the Act. The Ld. Counsel for the assessee submits that in so far as ground Nos. 1 & 2 is concerned, the Tribunal decided the issue in respect of contributions/donations received by the assessee at para-7 of its order in ITA No. 1373 to 1379/M/2013 dated 25.2.2015 and it was held that contributions received by the assessee are in pursuant to its activity and they are in accordance with the objects of the assessee union therefore cannot be treated as income from business or profession and they are exempt u/s. 10(24) of the I.T. Act as well as on the principle of the mutuality. 4. In so far as ground No. 3 regarding compensation aid/expenses are concerned, the Ld. Counsel for the assessee submits that the Tribunal in para-22 held that in view of the findings given in ground No. 1 & 2, this ground of appeal of the assessee beco....
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.... of and on account of its activity of achieving the object as per the constitution. It is not a case of receiving any amount or income by doing an activity which is not for achieving the objects of the assessee. The amount received by the assessee from the employers has a direct nexus with the negotiation and settlement arrived between the parties. The role of the assessee of negotiating on behalf of the workers for settlement of disputes between the worker and the employers is limited only in respect of the disputes between the member workers and employers. Therefore, the activity of the assessee cannot be generalized in the nature of professional service or occupational service open to general public but it is, otherwise, permitted under the by laws and constitution of the assessee as well as Trade Union Act. Though the contribution from employer is received as per the tripartite agreement, however, it is only incidental to the activity of services of the assessee in resolving the disputes between the member workers and the employers with the intention of advancement of welfare of members. The negotiation and settlement of disputes between the workers and employers is a composite....
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....ending/prosecuting various cases of employees. From record we find that the assessee was not merely representing its workers but in fact a party to all the litigation either as a petitioner or respondent. The management of SPM, Hon'ble High Court and Supreme Court accepted the status of the assessee as an association consisting of workers and, therefore, allowed it to contest in its own name instead of putting up the names of individual workers. There was a clear concept of mutuality. No-one can make profit out of himself. When a member agrees to contribute funds for a common purpose, the amount of funds not so required for common purpose and refunded to such individual, cannot be treated as income in their hands liable to tax. Thus, the general principle applicable to the mutual concern is that the surplus accruing to it cannot be regarded as income, profits or gains for the purpose of income tax. 21. As discussed hereinabove, the amount received by the assessee was not in the nature of income and the assessee was not doing any business activity and as such the application of provisions of section 40a(ia) was not justified. For application of section 40a(ia) firstly there m....
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....on cannot be treated as income from business or profession and accordingly the same is exempt u/s 10(24) of the Income Tax Act as well as on the principle of mutuality being distributed among the members of the assessee union". Respectfully following the said decision, we allow the grounds raised by the assessee on this issue. 7. In so far as ground No. 3 is concerned, the Co-ordinate Bench in para-22 of its order dismissed the ground as infructuous in view of the findings given in ground No. 1 & 2. As the same will apply mutatis and mutandis for this year also, this ground is dismissed as infructuous. 8. Ground No. 4 is regarding levy of interest u/s. 234B and it is only consequential. Thus this ground is dismissed as consequential. 9. Coming to the Revenue's appeal, the revenue has raised the following grounds: 1. "On the facts and in the circumstances of the case and in law, the CIT(A) erred in holding that the capital gains arising out of sale of property at "Poiser", is not taxable in the A. Y 2004-05, stating that the same arose prior to A. Y 2004-05, without appreciating the fact that the assessee had not credited the sale proceeds in the Income and Expenditure account....
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....facts of the case. 10.2. The matter was carried to ITAT and the Hon'ble ITAT, 'E', Bench, Mumbai in ITA NO. 1910/M/2008 dated 23/06/09 set aside the matter by observing that 'we accordingly set aside the order of CIT(A) and restore the matter to the file of AO for passing a fresh order after necessary examination in the light of the observations made above and after allowing opportunity of hearing to the assesee.' 10.3. In the reassessment order the assessing officer reproduced Para 3.1 and other relevant paragraphs of the CIT(A)'s appellate order leading to computation of long term capital gain at Rs. 2,23,42,132/-. There is no discussion of the compliance with the directions of Hon'ble ITAT and the verification carried out. The Assessing Officer accordingly assessed the long term capital gain at Rs. 2,23,42,132/-. The Ld. CIT(A) held that capital gains arose prior to the Assessment Year 2004-05 and he deleted the capital gains assessed by the Assessing Officer during this Assessment Year. 11. The Ld. Departmental Representative vehemently supporting the order of the Assessing Officer submits that the assessee credited advances received from sale of....
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....on sale of property in the profit and loss account. However, even in this year it did not offer the same for taxation. The claim of the appellant that the same is exempted u/s. 10(24) is also not correct since this section does not exempt the income in the nature of capital gains in the hand of trade union. 5.4. The appellant entered in to agreements for development cum sale on 30/10/1995 with different persons belonging to Dattani Construction by way of separate agreements. As a result of these agreements, the appellant received certain considerations totaling to Rs. 2,60,00,000/- during the period August 1994 to December,1995. The appellant treated these amounts as advances in their books of accounts for several years. It never credited this amount to its income and expenditure account till A.Y. 2004-05. No acceptable reason has been given for treating the advance received as advance in all these years prior to A.Y. 2004-05. The inescapable conclusion can only be that only the appellant wanted to hide the nature of transaction and to avoid payment of taxes in respect of this transaction. Even in A.Y. 2004-05, in the return filed it was claimed that the same is exempted u/s. 10(....
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....tes that vide Development agreement executed on 10-6-1994, Cable Corporation of India Ltd., for a consideration of Rs. 614,3601- , the appellant was allowed to develop and sell, in respect of plot of land at Poisar of 30718 square yards approx 24882 square meters. The owner allowed developer to apply for and obtain required permissions, develop and sell constructions on the land. If permissions were received, and sales of flats took place, the developer was entitled to all proceeds without having to pay the owner any further payments. The agreement was on 'as is where is' basis. It was recorded that the land was under restraint as per order of Collector u/s 8(4) dated 31-10-81 and that the property was reserved for Municipal Godown. 5.9. Vide similar 10 agreements dated either 19-9-1994 or 30- 10-1995, the appellant entered into Agreement for Development Cum Sale with Dattani group. Each agreement covered a part of the land which was taken from Cable Corporation mentioned earlier. The terms of this agreement were similar to the development agreement of appellant with Cable Corporation. Thus, it recorded the restriction of ULC u/s 8(4), reservation for Municipal Godown, an....