SHRI RAM NAGAR TRUST NO.1, MUMBAI vs. DDIT(E)I(1), MUMBAI

Under these circumstances, we request the Tribunal to decide this issue on merits. For this limited purpose, we place the proceedings back before the Tribunal for deciding this question in accordance with law. It is evident that Hon’ble Court has directed the Tribunal to decide whether the receipts of Rs.2 Crores earned by the assessee pursuant to settlement and for withdrawing certain suit filed by the assessee in respect of an immoveable property, were capital receipts and therefore not exigible to tax. The said issue was raised by the assessee by way of ground No.4 in the appeal filed before the Tribunal. The same read as under.

On facts and in circumstances of the case and in law the Commissioner of Income Tax (Appeals) {CIT (A)} erred in holding that the amount of Rs.2 Crores received by the appellant from Om Vishal Nagar Co-op. Housing Society Ltd. is not a capital receipt, and therefore, is a part of income of the appellant Trust. In doing so, the CIT(A) has grossly erred in 'holding that the said amount of Rs.2 Crores is liable to be taxable as income of the appellant Trust on the grounds of commercial principles and not exempt from the charge of income tax as claimed by the appellant, since it being in the nature of a capital receipt.

The learned Authorized Representative for Assessee (AR), Shri Mihir Naniwadekar, at the outset, submitted that learned Assessing Officer has not rendered any finding on this issue in the assessment order dated 25/03/2013 and correct factual matrix is required to be brought on record. The Ld. AR submitted that this alternative ground was taken up by the assessee for the first time before learned first appellate authority who dismissed the same vide para -9 of the order by opining that the income for the purpose of Sec.11 is to be computed in commercial manner without classification under various head and deductions under other machinery provisions under separate heads of income are not available under Sections 11, 12 & 13. However, no 3 Shri Ram Nagar Trust No.1 Assessment Year: 2010-11 adjudication has been rendered as to the nature of receipts. In the above background, Ld. AR submitted that it is imperative to bring on record correct factual matrix which would require elaborate submissions as well as documentary evidences. Therefore, the fact of the case would demand that the matter be remitted to learned AO so as to enable proper adjudication of ground raised