ATUL RESORTS & HOSPITALITY INDIA P.LTD,MUMBAI vs. ACIT 21(2), MUMBAI

Grounds of appeal

read as under:- “1. The learned Commissioner of Income Tax erred in law & on facts in confirming the order of the Assessing Officer in disallowing deduction u/s 80IB(1O) of the I.T.Act, 1961 in respect of the corpus fund charges of Rs.12,70,245/- included in Miscellaneous income of Rs.29,76,380/-.

In this case the issue raised pertains to treatment of corpus fund charges of Rs.12,70,245. The issue is whether the same is to be treated as income eligible for deduction u/s 80IB. In this regard it is noted that Tribunal had earlier remitted the issue to the file of the Assessing Officer. In the said order, Tribunal had followed another order of the Tribunal in M/s.Pathara & Associates and remitted the issue to the file of the A.O. to decide the issue afresh in the light of the above direction given by the Tribunal in the said case. In the said order in case of M/s.Pathare & Associates, the Tribunal had dealt with the issue of corpus fund as under:-

From the above, it is clear that Tribunal had directed the issue to be examined. That if amount of corpus fund is subsequently paid by the society or its occupants, then such amount cannot be considered as income for this . M/s.Atul Resorts & Hospitality India Pvt.Ltd. year. That than a liability was attached to this receipt and hence assessee will not be entitled to deduction as the said amount will not be income.

When this aspect was examined by the A.O. in the fresh proceedings, the A.O. noted the assessee submission that the said amount was not payable to the society and the assessee has transferred the same as miscellaneous income. The A.O. did not give any finding that the said averment of the assessee is wrong or that on enquiry the A.O. has found that the said amount was payable. Instead the A.O. gave his own exposition for the legal treatment of corpus fund. He referred to the some Court decisions and came to the conclusion that the assessee was not eligible for deduction u/s. 80IB for the sums received as corpus fund. Upon assessee’s appeal, the learned CIT(A) has upheld the A.O.’s action without pointing out as to why the A.O. should depart from the Tribunal’s directions as above. I find that the Tribunal had given a direction in this case earlier. The said directions have not been challenged by the Revenue, hence, it was incumbent upon the authorities below to follow the above direction of the Tribunal. The Tribunal had directed that the issue to be examined and if the amount involved was payable then it could not be treated as income qualifying for deduction. I find that there is no finding whatsoever that the said amount is payable, but the A.O. upon his own exposition of law has proceeded to deny deduction of the said amount. In such situation, I find that the orders of the authorities below are liable to be reversed. Hence, I set aside the orders of the authorities below and hold that in view of the earlier directions of the ITAT and in accordance with the material produced before me and the findings of the A.O., the amount involved being corpus fund received is not payable. Hence