2010 (2) TMI 1276 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of addition of corpus fund collected by assessee during Assessment Year 2002-03.

Summary:
1. The appeal was filed by the revenue against the order of the ld. CIT(A) for the Assessment Year 2002-03, challenging the deletion of addition of &8377; 6,17,050/- made by the Assessing Officer on account of corpus fund collected by the assessee. The AO observed that the assessee had collected a sum towards corpus fund from flat buyers at the time of sale of flats. The AO treated this amount as the assessee's business income. However, the ld. CIT(A) deleted the addition, citing the penal liability prescribed u/s 13 of the MOFA, 1963 for keeping these accounts of corpus fund separately and transferring to the society.

2. The Tribunal noted that in a similar case of M/s. Seagreen Ever Shine Builders Pvt. Ltd., it was held that the corpus fund collected by the assessee, acting as a Trustee for cooperative societies, cannot be treated as the assessee's income. The Tribunal upheld the ld. CIT(A)'s decision in that case. In the present case, as there were no distinguishing features brought by the revenue, the Tribunal followed the precedent and upheld the deletion of the corpus fund amount as income of the assessee.

3. Therefore, the Tribunal dismissed the revenue's appeal and upheld the decision of the ld. CIT(A) in deleting the addition of the corpus fund amount.