2005 (3) TMI 82

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....lowing question of law under section 256(2) of the Income-tax Act, 1961, hereinafter referred to as "the Act", for opinion to this court: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal, was legally correct to delete the addition of Rs. 4,32,685 holding that the Revenue has failed to prove that these deposits were in the nature of revenue receipts?....

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....s per clauses 41, 42, 43 and 44 of the bye-laws of the respondent-assessee as approved by the U.P. Government, the said deposits were finally to be converted into the shares of the respondent-assessee in the names of their respective members and in case after the issue of shares as per clause 28(kha) of the bye-laws there remained any surplus the same had to be refunded to the parties concerned. D....

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....non-refundable deposits were rightly taken as the income of the respondent-assessee. 'The Commissioner of Income-tax (Appeals), however, came to the conclusion that the amounts realised by the respondent-assessee at the instance of the directions of the Government could not constitute income of the respondent-assessee merely because the amounts had not been utilised so far. The Revenue feeling agg....

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....as of the view that the mere fact that these deposits had not been converted into shares by the respondent-assessee till November 10, 1986, would not alter or change the character of the deposits and the explanation regarding the non-conversion was plausible. The Tribunal, accordingly, upheld the order of the Commissioner of Income-tax (Appeals). We have heard Sri Shambhoo Chopra, learned stand....