TaxTMI 
TaxTMI 
2019 (7) TMI 1649
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for the relevant Assessment Year (AY 2004-05) brought to tax Rs.4,74,77,000/- treating it as income under Section 41(1)(a) of the Income Tax Act. The assessee, a Cooperative Society (involved in milk and milk product processing) had secured a loan from the National Dairy Development Board (NDDB) for which the Government of Rajasthan stood guarantor subject to payment of commission of Rs.25 Lacs per annum. This was claimed as an expenditure for several years upto the assessment year in question. The amount remained outstanding and was shown as payable to the Government of Rajasthan. The State of Rajasthan wrote off that liability of Rs.4,74,77,000/- allowing it to be treated as a capital grant to be used only for capital and rehabilitation ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appellant succeeds on this ground." 4. The Revenue's appeal was rejected by the ITAT, which endorsed a view of the CIT(A). 5. Arguing on behalf of the Revenue, Mr. Mathur relied upon a judgment of the Supreme Court in Commissioner of Income Tax, Madurai Vs. T.V. Sundaram Iyengar & Sons Ltd.: (1996)222 ITR 344(SC) and submitted that once amounts are treated as revenue or capital and later the assessee alleges or prefers to treat such sum as its money, it has to be treated as its income. The relevant part of the discussion in Commissioner of Income Tax, Madurai Vs. T.V. Sundaram Iyengar & Sons Ltd.(supra) reads as under:- "22.The principle laid down by Atkinson, J. applies in full force to the facts of this case. If a common sense view o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the point of time it was received, by efflux of time the money has become the assessee's own money. What remains after adjustment of the deposits has not been claimed by the customers. The claims of the customers have become barred by limitation. The assessee itself has treated the money as its own money and taken the amount to its profit and loss account. There is no explanation from the assessee why the surplus money was taken to its profit and loss account even if it was somebody else's money. In fact, as Atkinson, J. pointed out that what the assessee did was the common-sense way of dealing with the amounts." 6. At the outset, this Court notices that both CIT (A) and ITAT rendered concurrent findings on the fact. The only su....