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Facts
The assessee, Cane Development Council, appealed against the CIT(A)'s order which treated 'santage' amount as taxable revenue. The lower authorities considered the assessee as an artificial juristic person rather than a local authority.
Held
The Tribunal noted that a co-ordinate bench had previously held that if an entity is a local authority, its receipts are not chargeable to tax. The Tribunal reversed the lower authorities' findings that the assessee was not a local authority.
Key Issues
Whether the 'santage' amount received by the assessee is taxable revenue, and whether the assessee qualifies as a 'local authority' under the Act.
Sections Cited
271(1)(c), 10(20)
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
ORDER This assessee’s appeal for Assessment Year 2010-11 arises against the CIT(A), Muzaffarnagar’s order dated 09.01.2018 in case No. 1643-7909-1280-416, in proceedings u/s 271(1)(c) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
Coming to the sole substantive issue between the parties, it is noticed that the assessee/appellant is aggrieved against the learned lower authorities’ assessment and lower appellate findings holding it’s “santage” amount as chargeable to tax since representing a revenue item. There does not appear much a dispute between the parties that both the learned lower authorities have treated the assessee as an artificial juristic person than a local authority u/s 10(20) of the Act as well.
Cane Development Council 4. That being the case, learned counsel has filed copy of the assessment order dated 14.11.2019 for assessment year 2017- 18 in it’s case whereas it has already been held assessable as “local authority” which has gone un-rebutted from the Revenue side. I thus reverse both the learned lower authorities’ respective findings not treating it as a local authority but an artificial juristic person in very terms.
Next comes the sole substantive issue herein regarding the assessee’s santage receipts/collections on various tenders floated in the open market. I hereby notice that this tribunal’s earlier co-ordinate bench order in dated 03.05.2023 has already settled the issue that once it is a local authority and it’s receipts are not chargeable to tax, the impugned disallowance/addition has no legs to stand. Deleted accordingly.